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International Finance?

Foreign Exchange Risk

The risk that foreign currency prots mayevaporate in dollar terms due to

unanticipated unfavorale exchange ratemovements!

"olitical Risk

#overeign governments have the right to

regulate the movement of goods$ capital$and people across their orders! These la%ssometimes change in unexpected %ays!

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(arket Imperfections

)egal restrictions on movement ofgoods$ people$ and money

Transactions costs

#hipping costs

Tax aritrage

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+ultural Risk

Risk arise due to ,i-erent culture

.rie in (uslim +ulture isacceptale as ut not other culture!

(c ,onald/s +ase in India

,i-erent language also createprolem

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Importance of Internationaltrade

Increase in trade lierali1ation2 decrease in tari-$ 3uota4 !

#hrinkage of economic space2 transportation and communication4!

,evelopment of di-erent custom unionand regional union 2free trade area4!

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6hy international nance?

To understand the gloal economy andits relation

To understand the e-ect of 7loalFinance on usiness

To make intelligent decisions

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+)9##IFI+9TI:; :FI;TER;9TI:;9) .

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Thank >ou

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