Study Notes

    Unit 2  FOREIGN EXCHANGE & BALANCE OF PAYMENTS    Introduction to Forex, Forex (FX) refers to the global electronic marketplace for trading international currencies and currency derivatives. It has no central physical location, yet the forex market is the largest, most liquid market in the world by trading volume, with trillions of dollars changing hands every day. Most of the trading is done through banks, brokers, and financial institutions. Forex exists so that large amounts of one currency can be exchanged for the equivalent value in another currency at the current market rate. Foreign exchange market  • The foreign exchange market is a decentralized worldwide market.It does not have a  single market place or an organized exchange, electronic or physical like a stock exchange  • The participants in the foreign exchange market include central banks, commercial banks, brokers etc.  • The central banks monitor market movements and se...

  INTERNATIONAL FINANCIAL MANAGEMENT  Unit 1 Introduction to International Finance I nternational Finance deals with the management of finances in a global business. It explains how to trade in international markets and how to exchange foreign currency, and earn profit through such activities.   It mainly discusses the issues related with monetary interactions of at least two or more countries. International finance is concerned with subjects such as exchange rates of currencies, monetary systems of the world, foreign direct investment (FDI), and other important issues associated with international financial management.  International Finance is a section of financial economics which deals with the macroeconomic relation between two countries and their monetary transactions. The concepts like interest rate, exchange rate, FDI, FPI and currency prevailing in the trade come under this type of finance. Definition of International Finance The term international fina...