Note
0.0(0)
Explore Top Notes
Note
Studied by 56 peopleNoteStudied by 51 peopleNoteStudied by 52 peopleNoteStudied by 13 peopleNoteStudied by 12 peopleNoteStudied by 120 people
VCE Australian & Global Politics Unit 1 AOS 1
NoteStudied by 56 peopleMuscular System
NoteStudied by 51 peopleFULL COURSE REVIEW: EXAM CRAM
NoteStudied by 52 peopleSocial Studies Quest Review
NoteStudied by 13 peopleChapter 3 - Cells
NoteStudied by 12 peopleAP Art History: 1.02 The Analysis of Art
NoteStudied by 120 peopleNew Note
- The Global Capital Market
- Why Do Capital Markets Exist?
- Brings together investors and borrowers
- Investors-people with surplus cash, individuals and non-bank financial institutions
- Borrowers-individuals, companies, governments
- Markets makers
- What Makes the GCM Attractive?
- Low risk for investors, as well as diversity of options for investment
- Volatile exchange rates can make what would otherwise be profitable, unprofitable.
- Why is it Growing?
- Advancements in technology, Deregulation (can be risky, as it can destabilize economies)
- What is a Eurocurrency?
- Any currency banked outside its country of origin. Ex. Eurodollars, euro-yen, euro-pound, euro-euro
- An important source of low-cost funds for international companies
- Began in 1950s when eastern bloc countries feared that the U.S. might seize their dollars
- In 1957, market surged again after change in laws
- What Makes the Eurocurrency Market Attractive?
- The Eurocurrency market is attractive because it is not regulated by the government
- banks can offer higher interest rates on
Eurocurrency deposits than on deposits
made in the home currency - banks can charge lower interest rates to
Eurocurrency borrowers than to those who
borrow the home currency - The spread between the Eurocurrency
deposit and lending rates is less than the
spread between the domestic deposit and
lending rates - What is the Global Bond Market?
- Bonds are an important means of
financing for many companies - the most common bond is a fixed rate which
gives investors fixed cash payoff - The global bond market grew rapidly
during the 1980s and 1990s and
continues to do so in the 20th century - What is the Global Equity Market?
- Allowing a company to sell parts of themselves.
- Buying equity/stock=buying ownership
- Offering equity/stock=selling ownership
- How Do Exchange Rates Affect the Cost of Capital?
- Growth in global capital markets has
created opportunities for firms to borrow
or invest internationally - firms can often borrow at a lower cost than in
the domestic capital market - firms must balance the cost savings against
the foreign-exchange risk associated with
borrowing in foreign currencies - What do Global Capital Markets Mean for Managers?
- Growth in capital markets offers
opportunities for firms, institutions, and
individuals to diversify their investments
and reduce risk - again though, investors must consider
foreign exchange rate risk - Capital markets are likely to continue to
integrate, providing more opportunities for
business
Note
0.0(0)
Explore Top NotesNoteStudied by 56 peopleNoteStudied by 51 peopleNoteStudied by 52 peopleNoteStudied by 13 peopleNoteStudied by 12 peopleNoteStudied by 120 people
VCE Australian & Global Politics Unit 1 AOS 1
NoteStudied by 56 peopleMuscular System
NoteStudied by 51 peopleFULL COURSE REVIEW: EXAM CRAM
NoteStudied by 52 peopleSocial Studies Quest Review
NoteStudied by 13 peopleChapter 3 - Cells
NoteStudied by 12 peopleAP Art History: 1.02 The Analysis of Art
NoteStudied by 120 people