CHAPTER 5

DEFINITION
is a grouping of twenty countries: fifteen
CARICOM Member States and five Associate
Members.
It is a free trade area with the objective of
creating a customs union comprising the
Andean Community
South American countries of Bolivia,
Colombia, Ecuador, and Peru.
The goal of the agreement is the creation of
CAFTA-DR
a free trade area similar to NAFTA.
Originally began in 1950 to end the
European Union frequent wars between neighboring
countries in the Europe.
In 1957, the six nations signed the Treaty
European Economic Community (EEC) of Rome, which established the common
market between the members.
It came into being during a period when
NAFTA free trade and trading blocs were popular
and positively perceived.
With each new round of discussions and
agreements within a regional bloc, nations
Loss of national sovereignty
may find that they have to give up more of
their political and economic rights.
Was established in August 1967 with the
purpose of accelerating the economic
ASEAN growth, social progress, and cultural
development in the region, and promoting
regional peace and stability.
Current members of these are the countries
MERCOSUR like Argentina, Brazil, Paraguay, Uruguay
and Venezuela.
This may mean increased trade with a less
Trade diversion efficient or more expensive producer
because it is in a member country.
 CHAPTER 7
initial public offering
International Banks
World Financial Centers
venture capital
Offshore Financial Centers
Euroloan market
Global bonds
Eurobond
Foreign bond
Dragon bonds
1. Typically, the bid or the buy is always cheaper than the sell. TRUE
2. The firm has to pay suppliers in other countries with a currency the same
from its home country's currency. FALSE
DEFINITION
is certainly a lucrative exit strategy, it's not
for every company.
They not only received deposits and made
loans but also provided tools to finance
exports and imports and offered
sophisticated cash-management tools,
including foreign exchange.
They are usually home to major
corporations and banks or at least regional
headquarters for global firms.
Are characterized primarily by their
investments in smaller, high-growth firms
that are considered riskier than traditional
investments.
is a center where the bulk of financial
sector activity is offshore on both sides of
the balance sheet, where the transactions
are initiated elsewhere, and where the
majority of the institutions involved are
controlled by non- residents,
is one of the least costly for large,
creditworthy borrowers, including
governments and large global firms.
This option is usually reserved for higher
rated, creditworthy, and typically very
large firms.
Bond issued outside the country in whose
currency it is denominated.
is a bond sold by a company, government,
or entity in another country and issued in
the currency of the country in which it is
being sold.
Foreign bonds issued and traded
throughout Asia except Japan.