Chapter 9. International Financial Markets

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1、Chapter9.InternationalFinancialMarkets2011.04.29ContentsLearningObjectives1.InternationalCapitalMarket2.MainComponentsoftheInternationalCapitalMarket23.ForeignExchangeMarket4.HowtheForeignExchangeMarketWorks6.CurrencyConvertibility5.ForeignExchangeMarketTodayLe

2、arnedinthischapterLearningObjectivesDescribethepurposes,development,andfinancialcentersoftheinternationalcapitalmarket.Describetheinternationalbond,internationalequity,andEurocurrencymarkets.Discussthefourprimaryfunctionsoftheforeignexchangemarket.3Explainhowcu

3、rrenciesarequotedandthedifferentratesgiven.Identifythemaininstrumentsandinstitutionsoftheforeignexchangemarket.Explainwhyandhowgovernmentsrestrictcurrencyconvertibility.WiiIstheChampionNintendoreportednetincomein2008of¥257.3billion($2.6billion),butalsoreportedt

4、hatitsincomeincludedaforeignexchangelossof¥92.3billion($923.5million).Ariseoftheyenagainstforeigncurrenciespriortothetranslationofsubsidiaries’earningsintoyencausedtheloss.Asyoureadthischapter,considerhowshiftingcurrencyvaluesaffectfinancialperformanceandhowman

5、agerscanreducetheirimpact.41.InternationalCapitalMarketAcapitalmarketisasystemthatallocatesfinancialresourcesintheformofdebtandequityaccordingtotheirmostefficientuses.Itsmainpurposeistoprovideamechanismthroughwhichthosewhowishtoborroworinvestmoneycandosoefficie

6、ntly.PurposesofNationalCapitalMarketsNationalcapitalmarketshelpindividualsandinstitutionsborrowthemoneythatotherindividualsandinstitutionswanttolend.51.InternationalCapitalMarketDebt-Loaninwhichtheborrowerpromisestorepaytheborrowedamount(theprincipal)plusaprede

7、terminedrateorinterest.Bond-Debtinstrumentthatspecifiesthetimingofprincipalandinterestpayments.61.InternationalCapitalMarketEquity-Partownershipofacompanyinwhichtheequityholderparticipateswithholderparticipateswithotherpartownersinthecompany’sfinancialgainsandl

8、osses.Stock-Sharesofownershipinacompany’sassetsthatgiveshareholdersaclaimonthecompany’sfuturecashflows.71.InternationalCapitalMarketPurposesoftheInternationalCapitalMarketTh