100% tevredenheidsgarantie Direct beschikbaar na betaling Zowel online als in PDF Je zit nergens aan vast
logo-home
Summary International Financial Management €2,99   In winkelwagen

Samenvatting

Summary International Financial Management

 391 keer bekeken  1 keer verkocht

Summary of the lectures of International Financial Management.

Voorbeeld 2 van de 8  pagina's

  • 31 maart 2016
  • 8
  • 2015/2016
  • Samenvatting
  • gijs
Alle documenten voor dit vak (2)
avatar-seller
gijstimmermans1
Summary International Financial Management
Lecture 1: Why and wherefores
Foreign exchange (FX) risk: An unanticipated movement in the exchange rate can hurt foreign
currency profits or investment returns.
Political risk: Unanticipated changes in laws (e.g. taxes).
Market imperfections: Frictions in the markets for goods and services or in capital markets.
Expanded opportunity set: Potential benefits for firm (markets) and individual investors (increased
investment and diversification opportunities).
Firm goals:
 Shareholder value view. (1) Maximization of shareholder value, (2) constrained shareholder value.
 Corporate governance

Globalization:
 Emergence of globalized markets  Emergence of the Euro
 Trade liberalization and economic integration  Privatization

Multinational corporation (MNC) A firm that is incorporated in one country, but has production and
sales in other countries.

Lecture 2: Some macro facts
 Gold standard (1875-1914)  Bretton Woods (1945-1973)
 Interwar period (1915-1944)  Flexible exchange rates (1973-today)

 Flexible exchange rates can be good because
o Automatic stabilization of trade imbalances
o National monetary policy remains autonomous
 Flexible exchange rates can be bad because
o Exchange rate uncertainty

Balance of payments (BoP): Statistical records of a country’s international
transactions over a certain period of time, presented in the form of
double-entry bookkeeping.
Difference between sales of assets to foreigners and purchases of
foreign assets. Example: foreign direct investment (FDI):
Imports > exports: trade deficit Imports < exports: trade surplus Total debits > total credits:
current account deficit
Current account
BCA + BKA + BRA = 0
Fixed exchange rates: BCA + BKA = - BRA (Therefore: positive BRA = reserves are run down)
Floating exchange rates: BCA + BKA = 0
Dirty floating rates: BCA + BKA ≈ 0




Summary IFM 2016 G. Timmermans 1

, Lecture 3: Governance around the world
Corporate governance: The economic, legal, and institutional framework in which corporate
control and cash flow rights are distributed among shareholders,
managers, and other stakeholders of the company.

1  Public corporation’s structure  2
A public corporation’s pros are (1)
efficient risk sharing, and (2) a major
organizational innovation.

Key objective of corporate governance: protect outside investors from
expropriation by controlling insiders (managers, controlling investors).
Two types of shareholders

Remedies to agency problems: governance mechanisms to alleviate the agency problems
1. Board of directors 4. Accounting transparency 7. Market for corporate
2. Incentive contracts 5. Debt control
3. Concentrated ownership 6. Cross-listing

Common law is formed by the discrete ruling of independent judges and judicial precedent. Civil law
tradition is based on codification of legal rules. Consequences of Law for Finance:
1. The pattern of corporate ownership and control
2. Capital markets development
3. Economic growth

Lecture 4: The FX market, part I
Interbank market is a network of correspondent banking relationships. Large commercial banks maintain
deposit accounts with each other, called correspondent banking accounts.
Spot FX market:
 Spot rate quotations
o Ex.: €1 = $1.2: direct quotation (American terms), indirect quotation (European terms)
 Bid-ask spreads = difference between:
o Bid price is the price a market maker is willing to pay for a currency
o Ask price is the amount the market maker wants the buyer to pay for the currency
 Cross rates
 (Triangular) arbitrage (Changing Yen to Dollars, could also do it through Pounds)

Forward FX market
A forward is an agreement to buy or sell an asset in the future at a price agreed upon today
 Forward rate quotations
 Long and short forward positions
o If you agree to sell (buy) dollars (spot or forward), you are short (long) “in the dollar”
 Forward cross exchange rates
o Recall, and note that: S(€/£) = S($/£) x S(€/$) = S($/£) / S($/€)
 Forward premium and discount
o Annualized relative deviation from the spot rate (N-O/O. If positive, premium. If negative,
discount).



Summary IFM 2016 G. Timmermans 2

Voordelen van het kopen van samenvattingen bij Stuvia op een rij:

Verzekerd van kwaliteit door reviews

Verzekerd van kwaliteit door reviews

Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!

Snel en makkelijk kopen

Snel en makkelijk kopen

Je betaalt supersnel en eenmalig met iDeal, creditcard of Stuvia-tegoed voor de samenvatting. Zonder lidmaatschap.

Focus op de essentie

Focus op de essentie

Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!

Veelgestelde vragen

Wat krijg ik als ik dit document koop?

Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.

Tevredenheidsgarantie: hoe werkt dat?

Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.

Van wie koop ik deze samenvatting?

Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper gijstimmermans1. Stuvia faciliteert de betaling aan de verkoper.

Zit ik meteen vast aan een abonnement?

Nee, je koopt alleen deze samenvatting voor €2,99. Je zit daarna nergens aan vast.

Is Stuvia te vertrouwen?

4,6 sterren op Google & Trustpilot (+1000 reviews)

Afgelopen 30 dagen zijn er 84251 samenvattingen verkocht

Opgericht in 2010, al 14 jaar dé plek om samenvattingen te kopen

Start met verkopen
€2,99  1x  verkocht
  • (0)
  Kopen