INTERNATIONAL FINANCIAL MANAGEMENT国际财务管理双语课件.ppt

We are concerned with financial management in an international setting. Key terms North American Free Trade Agreement (NAFTA) 北美自由贸易协定 Shareholder wealth maximization 股东利益最大化 Theory of comparative advantage 比较优势理论 World Trade Organization (WTO) 世界贸易组织 International mutual funds 国际信托基金 Bearer share 不记名股票 Registered share 记名股票 Working capital 营运资本 Key terms Corporate governance 公司治理 European Union 欧盟 Expanded opportunity 扩大的市场机遇 Foreign exchange risk 外汇风险 General Agreement on Tariffs and Trade (GATT) 关贸总协定 Market imperfections 市场的不完善性 Multinational corporation (MNC) 跨国公司 Outline What’s Special about International Finance? Goals for International Financial Management Globalization of the World Economy Multinational Corporations Summary 1.What’s Special about “International” Finance? (1)Foreign Exchange Risk (2)Political Risk (3)Market Imperfections (4)Expanded Opportunity Set (1) Foreign Exchange Risk What is the risk? The risk refers to the uncertainty of result in the future. What is foreign exchange risk? Foreign exchange risk arises from foreign currency translation, which indicates that the uncertainty of exchange rate fluctuations has overall and significant effects on primary economic activities, such as consumption, production and investment. For example Suppose $1 = ￥ 100 and you buy 10 shares of Toyota at ￥ 10,000 per share. One year later the investment is worth ten percent more in yen: ￥ 11,0000 But, if the yen has depreciated to $1 = ￥ 120, your investment has actually lost money in dollar terms. Case study: Foreign exchange risks arouse from Mexico Peso depreciation Background: Mexico Financial Crisis in 1994 On December 20th, 1994, Mexico government declared that the floating range of Peso against US dollar would be expanded to 15%. On December 22nd, 1994, Mexico government was forced to declare that Peso would be allowed to float flexibly. As a result, foreign capital was withdrawn from Mexico, the price of stock market dropp