Intro to International Finance

Review:

 Benefits of international trade flows

 Benefits of international capital flows
 Conflicts against the MNC goals (especially, agency costs)
 Some methods to tackle agency costs
 Theories of international business (Comparative Advantage, Imperfect Markets Theory, Product
Cycle Theory)

International Financial Markets + Currency derivatives

Review all, ignore items in yellow (sorry I can’t leave much out)

 What are international financial markets?

 Motives for using international financial markets?
 Spot market (focus specifically on direct quote/indirect quote; American term/European term…,
calculation direct quote, cross rate, lose-gain)
 Forward market (ignore nondeliverable forward contract)
 Futures market (compare forward and futures contract)
 Options market (ignore conditional currency options)
 Eurocurrency market
 Eurocredit market
 Eurobond market
 International stock market

Balance of Payments and International flow of funds

Review:

 Fundamentals of BoP accounting

 Accounts of BoP and links among them
 How to calculate OM
 Correct a balance-of-trade deficit

Ignore agencies that facilitate international flows

Government intervention

Review all, except:

 Pegged exchange rate system

 Currency board
 Dollarization