International Finance 1 min read
Benefits and Risks of Financial Globalization
One of the major benefits of Financial Globalization is that the risk of a “credit crunch” has been reduced to…
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Economic Exposure – An Example
Consider a big U.S. multinational with operations in numerous countries around the world. The company’s biggest export markets are Europe…
International Finance 1 min read
Types of Exposure
Companies are exposed to three types of risk caused by currency volatility − ● Transaction exposure − Exchange rate fluctuations have an effect on…
International Finance 1 min read
Exchange Rate Fluctuations
Exchange rate fluctuations affect not only multinationals and large corporations, but also small and medium-sized enterprises. Therefore, understanding and managing…
International Finance 4 min read
Exchange Rate Forecast: Models
Some important exchange rate forecast models are discussed below. Purchasing Power Parity Model The purchasing power parity (PPP) forecasting approach…
International Finance 1 min read
Exchange Rate Forecast: Approaches
The two most commonly used methods for forecasting exchange rates are − ● Fundamental Approach − This is a forecasting technique that utilizes elementary…
International Finance 1 min read
Exchange Rate Forecasts
Economists and investors always tend to forecast the future exchange rates so that they can depend on the predictions to…
International Finance 1 min read
Factors Affecting International Equity Returns
Macroeconomic factors, exchange rates, and industrial structures affect international equity returns. Macroeconomic Factors Solnik (1984) examined the effect of exchange…
International Finance 1 min read
Global Registered Shares (GRS)
GRS are a share that are traded globally, unlike the ADRs that are receipts of the bank deposits of home-market…
International Finance 2 min read
American Depository Receipts (ADR)
An ADR is a receipt that has a number of foreign shares remaining on deposit with the U.S. depository’s custodian…
International Finance 1 min read
Yankee Stock Offerings
In 1990s, many international companies, including the Latin Americans, have listed their stocks on U.S. exchanges to prime market for…
International Finance 1 min read
Changes in Capital Markets
The driving forces of financial globalization have led to four dramatic changes in the structure of national and international capital…