Global Capital Market

These flashcards cover key terms and concepts related to the global capital market, including its benefits and risks.

Global Capital Market

A marketplace for capital that spans global boundaries, allowing for the exchange of capital and investment opportunities.

Market Makers

Financial service companies that connect investors and borrowers, either directly or indirectly.

Eurocurrency Market

A market for currencies that are held and traded outside their country of origin, with Eurodollars as the most prevalent form.

Risk-Reducing Effects

The advantages gained from diversifying investments across different countries to minimize potential losses.

Cost of Capital

The price of borrowing money; this cost can vary significantly between domestic and global capital markets.

Hot Money

Short-term capital that can move quickly in and out of markets, often seeking high returns.

Patient Money

Long-term capital that supports stable investments and cross-border capital flows.

Portfolio Diversification

The practice of spreading investments across various financial assets to reduce risk.

Systematic Risk

The risk associated with overall market movements that affect all firms in an economy.

Foreign Exchange Risk

The risk of changes in foreign exchange rates impacting the cost of currency-denominated loans.

Deregulation

The process of reducing government restrictions on market activities, which could increase capital flow.