Summary: International Finance

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Read the summary and the most important questions on International Finance

  • 1 Context and scope of international businesses and finances of a firm

  • 1.1 internationalisation of the firm

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  • A parent firm with subsidiaries abroad

    Multinational company
  • A company under control of a parent company

    Subsidiary
  • For internationalisation with ...., the firm contols 100% of capital

    FDI
  • Firm tends to gradually increase its involvement in foreign markets step by step

    Gradualism
  • Firms are combining resources and selling products in a global market since the beginning

    Born global
  • 2 International financial markets

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  • The logical space where economic agents deal with foreign currencies

    Euromarkets
  • This market is loosely regulated and sometimes self regulated

    Euromarkets
  • 2.1 Eurodollar

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  • US bank dollar deposits located outside of the US

    Eurodollar
  • A market was created for dollar transations in EU:

    • Inbetween bank
    • with multinational companies
  • Lax regulation London:

    • no reserve requirements
    • no deposit guarantee fund
    • higher interest rate 

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