International Finance
International finance is the study of monetary interactions between two or more countries. International finance focuses on foreign direct investment and currency exchange rates.
International finance is the study of monetary interactions between two or more countries. International finance focuses on foreign direct investment and currency exchange rates.
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Short Lectures • Learn with your time
Introduction
Entering an International Market
Imports and Exports
Licensing
Joint Venture
Wholly Owned Subsidiary
Strategic Alliance
Lesson Summary
Learning Outcome
Quiz 1.1
Changing Trends & Developments
Growing Middle Class
Technology
Demographics
Lesson Summary
Quiz 1.2
The World Bank
World Bank Group
International Monetary Fund
Bank for International Settlement
Lesson Summary
Quiz 1.3
U.S. Trade Policy
ITA and ITC
U.S. Trade Laws
Lesson Summary
Quiz 1.4
International Trade
GATT
The European Union
United States - Mexico - Canada Agreement (USMCA)
WTO
Lesson Summary
Quiz 1.5
The World Trade Organization
History
Purpose
Members of the WTO
Lesson Summary
Quiz 1.6
Rise of International Trade
NAFTA, EU, and WTO
Arguments for Expanded International Trade
Opposition to Globalization
Lesson Summary
Quiz 1.7
Introduction
Measuring a Country's Economic Activity
The Balance of Payments
Accounts in the Balance of Payments
Current Account
Financial Account
Capital Account
Lesson Summary
Quiz 2.1
Balance of Payments Basics
Balance of Payments Structure
Components of the Financial-Capital Account
Measuring Surplus & Deficit
Financial Account Importance
Lesson Summary
Quiz 2.2
The Capital Account and the Balance of Payments
Main Components of a Capital Account
Capital Transfers
Acquisition and Disposal of Non-produced, Non-financial Assets
Measuring Capital Accounts
Lesson Summary
Quiz 2.3
Basics of Trade Deficits and Surpluses
Trade Balance
Trade Deficit Examples
General Calculation
1990s Economy
Trade Surplus Examples
Quiz 2.4
Lesson Summary
Definition of Current Account
Components of the Current Account
Measuring and Calculating Current Account
Currency Exchange Rates
Lesson Summary
Quiz 2.5
What Is a Current Account?
Current Account: Example
Lesson Summary
Quiz 2.6
The Balance of Payments
Imbalances in the Balance of Payments
Mechanisms for Adjusting the BOP
Adjustment of Exchange Rates
Adjustment of Internal Prices and Demand
Rules-Based Adjustment
Combining Methods
Lesson Summary
Quiz 2.7
International Trade
Political Government Intervention
Economic Government Intervention
Policy Instruments
Lesson Summary
Quiz 2.8
Protectionism and Globalization
Timeline of United States Trade
US Imports and Exports
Trade Deficits
What to Do About Trade Deficits
Lesson Summary
Quiz 2.9
Introduction
Gift or Debt Economy
Bartering in a Commodity Economy
Ingots and Shekels
Early Currency and Counterfeiters
The First Coins in Society
Lesson Summary
Quiz 3.1
Money and Politics
Background
Passing the Act
Impact of the National Currency Act
Lesson Summary
Quiz 3.2
The Lead-Up
Timeline of the Great Recession
Government Intervention
Recovery
Lesson Summary
Quiz 3.3
What Is the Gold Standard?
Variations of the Gold Standard
The History of the Gold Standard
Lesson Summary
Quiz 3.4
What is the Federal Reserve?
Structure of the Federal Reserve
Role of the Federal Reserve
Managing Inflation
Supervising the National Banking System
Maintaining Financial Stability
Providing Banking Services
Conducting Monetary Policy
Creation of the Federal Reserve
History
Who Controls the Federal Reserve?
Lesson Summary
Quiz 3.5
IMF Defined
History
Surveillance
Technical Assistance
Lending
Lesson Summary
Quiz 3.6
Rebuilding the International Economic System
Bretton Woods, New Hampshire 1944
The Collapse of the Bretton Woods Agreement
Lesson Summary
Quiz 3.7
Introduction to the Euro
What is the Euro?
Advantages of the Euro
Disadvantages of the Euro
Lesson Summary
Quiz 3.8
Money Problem
What Is a Currency Union?
Benefits of Monetary Unions
Drawbacks of Monetary Unions
Lesson Summary
Quiz 3.9
Origins of the Great Recession
Economic Fallout
Attempting to Solve the Crisis
Lesson Summary
Quiz 3.10
What Is Cryptocurrency?
Cryptocurrency: Creation
Cryptocurrency: Impact
Lesson Summary
Quiz 3.11
Introduction
Emerging Markets
Eroding Economic Borders
Shifting Focus of Labor
Technology Expands Opportunity
Lesson Summary
Quiz 4.1
Globalization Defined
Dimensions
North-South Gap
Lesson Summary
Quiz 4.2
International Business
Democracy
Comparative Political Systems
Comparative Economic Systems
Global Solution for Companies
Lesson Summary
Quiz 4.3
What Is Economic Integration?
Theory of Economic Integration
Types of Integration
Lesson Summary
Quiz 4.4
Multinational Corporation Defined
Role in Globalization
Self-Interested Actors
Lesson Summary
Quiz 4.5
Globalization in Business
Impact of Globalization
Effects of Globalization
Lesson Summary
Quiz 4.6
Background on Globalization
How Global Change Affects Globalization
Lesson Summary
Quiz 4.7
What is Globalization?
Restraints to Globalization
Capacity
Legal Restrictions
Trade Barriers
Cultural Differences
Nationalism and Prejudice
International Conflict
Lesson Summary
Quiz 4.8
Trade Agreements
Licensing
Franchising
Joint Ventures
Outsourcing
Offshoring
Lesson Summary
Quiz 4.9
Internationalization
Reasons for Expansion
1. Market Seeking
2. Economic Reasons
3. Market Reasons
Lesson Summary
Quiz 4.10
International Transfer Pricing: Defined
Problems Moving Goods
Final Effects of Transfer Pricing
Example
Lesson Summary
Quiz 4.11
Definition of Foreign Direct Investment
Advantages of FDI
Disadvantages to MNEs
Lesson Summary
Quiz 4.12
Globalization
Downsizing
Outsourcing
Insourcing
Lesson Summary
Quiz 4.13
The Global Supply Chain
Increased Paperwork
Varying Regulations and Fees
Language and Cultural Barriers
Lesson Summary
Quiz 4.14
Introduction
Currency Trading
How Does the Forex Work?
The Language of Currency
Making Money
Currency Fluctuation Causes
Lesson Summary
Quiz 5.1
Introduction to Foreign Currency Exchange
Law of Demand
Law of Supply
Supply and Demand for Currency
Demand for Currency
Supply for Currency
Demand and Supply Changes
Lesson Summary
Quiz 5.2
Importance of Understanding Exchange Rates
Definition and Purpose
Types
How They Work
Conversion Calculations
Lesson Summary
Quiz 5.3
Exchange Rates
Currency Conversion
Example 1
Example 2
Lesson Summary
Quiz 5.4
Currency Terms
Strong Exchange Rate Effects
Weak Exchange Rate Effects
Lesson Summary
Quiz 5.5
Background on Foreign Exchange Rates
What Is Interest Rate Parity?
The International Fisher Effect
Interest Arbitrage
Lesson Summary
Quiz 5.6
Purchasing Power
Parity Theory
Types
Lesson Summary
Quiz 5.7
What Is the Big Mac index?
What Is Purchasing Power Parity?
Using the Big Mac index
Lesson Summary
Quiz 5.8
Fiscal and Monetary Policies
Review of Basics
Fiscal Policy Effects
Income Changes
Price Changes
Interest Rates
Monetary Policy Effects
Income
Prices
Interest Rates
Lesson Summary
Quiz 5.9
Exchange Rates
Floating Exchange Rates
Fixed Exchange Rates
The Middle Ground
Lesson Summary
Quiz 5.10
From Barter to Currency
The People's Currency
Responding to Change
Managing the Yuan for Social Stability
Lesson Summary
Quiz 5.11
Introduction
Imports and Exports
Currency Changes and Imports
Currency Changes and Exports
Lesson Summary
Quiz 6.1
Trade Deficit
Currency Fluctuations
Effects of Currency Appreciation
Measures to Counteract the Effects
Effects of Currency Depreciation
Measures to Control the Effects
Lesson Summary
Quiz 6.2
Appreciation & Depreciation
The Impact on Inflation
Local Currency Appreciation
Local Currency Depreciation
Lesson Summary
Quiz 6.3
Appreciation & Depreciation
Exchange Rates & Unemployment
Currency Appreciation: Effects
Currency Depreciation: Effects
Lesson Summary
Quiz 6.4
A Crisis With Your Currency
What is a Currency Crisis?
Causes
Examples
Lesson Summary
Quiz 6.5
The Hot Economies of Southeast Asia
Booming Problems
Currency Crisis
Consequences
IMF to the Rescue
Lesson Summary
Quiz 6.6
Assignment Location & Info
Introduction
The Money Market
Money Demand and Money Supply Curves
Equilibrium in the Money Market
Lesson Summary
Quiz 7.1
International Money Markets
Main Characteristics of International Money Markets
Opportunities for Investors
Lesson Summary
Quiz 7.2
Yield Curves
Normal Yield Curve
Inverted Yield Curve
Flat Yield Curve
Why a yield curve?
Lesson Summary
Quiz 7.3
Publicly Traded Stocks
Publicly Traded Bonds
Primary and Secondary Markets
Private Placement of Securities
Lesson Summary
Quiz 7.4
Dividends
Common Stock
Preferred Stock
Lesson Summary
Quiz 7.5
Why Use an International Bank?
International Banking Services
Types of International Banks
Lesson Summary
Quiz 7.6
A Balanced Portfolio
The International Stock Market
The International Bond Market
International Complexities
External Factors
Instruments for International Investment
Lesson Summary
Quiz 7.7
International Diversification
Added Value from International Investments
Real-World Application
Lesson Summary
Quiz 7.8
Introduction
What Is Exchange Rate Risk?
Short-Run and Long-Run
Translation Exposure
Lesson Summary
Quiz 8.1
International Corporate Finance
Political Risk
Lesson Summary
Quiz 8.2
What Is Interest Rate Risk?
Bond Valuation Basics
Reinvestment Rate Risk
Can Risk be Avoided?
Lesson Summary
Quiz 8.3
Background on International Business
The Home Currency Approach
Lesson Summary
Quiz 8.4
International Expansion
The Costs of Doing Business Abroad
Liability of Foreignness
Lesson Summary
Quiz 8.5
Insurance Coverage Defined
Casualty Coverage
Liability Coverage
E&O Coverage and D&O Coverage
Business Interruption Insurance
Key Person Loss Insurance
Lesson Summary
Quiz 8.6
India's Financial Markets
Interest Rate Futures
Interest Rate Futures in India
Interest Rate Options
Lesson Summary
Quiz 8.7
How BMW Overcame Exchange Risk
BMW's Choice: Raise Prices or Lose Revenue
BMW's Natural Hedge Strategy
Analyzing BMW's Outcomes
Outcome 1: Reduced Exchange Exposure
Outcome 2: Simplifying the Supply Chain
Outcome 3: Supply Chain Diversity
Lesson Summary
Quiz 8.8
Introduction
The Global Business Environment
Proactive Decision-Making
Reactive Decision-Making
Lesson Summary
Quiz 9.1
Several Strategies
Exporting, Licensing and Franchising
Joint Ventures and Strategic Alliances
Foreign Direct Investment & Subsidiaries
Lesson Summary
Quiz 9.2
What Is Hedging?
Hedging in the Financial Markets
Lesson Summary
Quiz 9.3
Hedge Fund Definition
Hedge Fund History
Key Characteristics of Hedge Funds
Hedge Fund Strategies
Hedge Fund Investment Guidelines
Hedge Fund Structure
Hedge Fund Example
Lesson Summary
Quiz 9.4
What is Interest Rate Risk?
How to Hedge
Forward Rate Agreements (FRAs)
Futures Contracts
Interest Rate Swaps
Option Contracts
Lesson Summary
Quiz 9.5
What Is a Portfolio?
Global Equity Portfolio
Investment Strategies
Lesson Summary
Quiz 9.6
Hedging
Hedging at Heidelberg Cement
Heidelberg's Criteria for Hedging
Heidelberg's Hedging Strategy
Heidelberg's Preference for Forward Contracts
Heidelberg's Decision-Making Process
Heidelberg's Outcomes
Lesson Summary
Quiz 9.7
Introduction
Risk & Exposure in Forex
Foreign Exchange Hedging
Main Hedging Methods
1. Forward Contracts
2. Future Contracts
3. Swap Contracts
4. Option Contracts
Lesson Summary
Quiz 10.1
Hedging Risks
Forward Contracts
Futures Contracts
Debt Operations
Swap Contract & Options
Lesson Summary
Quiz 10.2
Risks and Exposure
Hedging Risks
Types of Hedging Transactions
Cash Flow Hedges
Fair Value Hedges
Net Investment Hedges
Lesson Summary
Quiz 10.3
What is Foreign Exchange Risk?
How to Hedge Operation Exposure
Using Debt Financing
Using Back-to-Back Loans
Using a Cross-Currency Swap
Lesson Summary
Quiz 10.4
Risks in Foreign Exchange Markets
What Are Forward Contracts?
Hedging Risks & Forward Contracts
Using Forward Contracts
Lesson Summary
Quiz 10.5
Hedging Risk
Futures Contract
The Requirements of Futures Contracts
Pricing a Futures Contract
Settling a Contract
Using Futures Contracts
Lesson Summary
Quiz 10.6
Foreign Exchange Markets
Understanding Swap Contracts
Pricing Model
How Do Swap Contracts Hedge Risk?
Advantages and Disadvantages of Swap Contracts
Lesson Summary
Quiz 10.7
Currency Risk
Options
Options Pricing
Options Pros and Cons
Lesson Summary
Quiz 10.8
Introduction
Ethical Behavior
Personal Ethics & Business Culture
Power & Pressure
Confusion
Loyalty
Lesson Summary
Quiz 11.1
Define Government Failure
Government Failure on Demand and Supply
Government Failure Causes
How to Overcome Government Failure
Government Failure Examples
Government Failure Vs. Market Failure
Lesson Summary
Quiz 11.2
The Financial Crisis Of 2008
FDIC: Insuring Your Deposits
The FED: Providing Liquidity
President & Congress: Fiscal Policy
Dodd-Frank: Proactive Approach
Lesson Summary
Quiz 11.3
Leverage
Corporate Borrowing
Lesson Summary
Quiz 11.4
History of Fannie Mae
Structure
Role in Real Estate Financing
Lesson Summary
Quiz 11.5
Who's Freddie Mac?
Role in Mortgage Markets
Freddie Mac vs. Fannie Mae
A Brief History of Freddie Mac
Lesson Summary
Quiz 11.6
A First Look at Strategic Default.
How Strategic Default Works
Planning for a Strategic Default
Consequences of Strategic Default
Lesson Summary
Quiz 11.7
Volcker Rule
Definition
Implementation
Lesson Summary
Quiz 11.8
Why Regulate?
Impact of Regulation
Financial Regulation
Lesson Summary
Quiz 11.9
Housing Bubble
Mortgage-Backed Securities
Subprime Mortgages
The House of Cards Collapses
Global Consequences
Lesson Summary
Quiz 11.10
Final Exam