Page 3 - Demo

%u062c%u0645%u064a%u0639 %u0627%u0644%u062d%u0642%u0648%u0642 %u0645%u062d%u0641%u0648%u0638%u0629 %u0640 %u0627%u0625%u0644%u0639%u062a%u062f%u0627%u0621 %u0639%u0649%u0644 %u062d%u0642 %u0627%u0645%u0644%u0624%u0644%u0641 3 %u0628%u0627%u0644%u0646%u0633%u062e %u0623%u0648 %u0627%u0644%u0637%u0628%u0627%u0639%u0629 %u064a%u0639%u0631%u0636 %u0641%u0627%u0639%u0644%u0647 %u0644%u0644%u0645%u0633%u0627%u0626%u0644%u0629 %u0627%u0644%u0642%u0627%u0646%u0648%u0646%u064a%u0629Chapter Objectives:Understand the importance of studying international finance.Know the difference between international finance and domestic finance.The importance of studying international finance:It is not possible to understand international business without an understanding of international finance. It is useful to study International Finance to understand the global business dynamics and to know how things work across borders and different countries.What%u2019s Special about %u201cInternational%u201d Finance?%uf0b7 Foreign Exchange Risk:Currency exposure has an impact on international finance.Knowledge of foreign exchange derivatives is required for international financial risk.%uf0b7 Political Risk%uf0a7 A multinational company is exposed to different economic and political environments.%uf0a7 A multinational company is exposed to different tax laws and regulations.%uf0b7 Market Imperfections%uf0b7 barriers to the movement of people, goods, services, and capital across national boundaries.%uf0b7 Expanded Opportunity Set%uf0b7 Firms can produce and expand their business in any country or region.1- Foreign Exchange RiskThis risk of foreign currency may diminish the profits in dollar terms due to unanticipated unfavorable exchange rate movements.Suppose $1 = 16EGP, and you buy 10 shares of CIB at 70 EGP per share. One year later, the investment is worth ten percent more in EGP: EGP770If the EGP has depreciated to $1 = 18EGP, then your investment has lost money in dollar terms.Multinational investors may use exchange derivatives to hedge the risk of unfavorable exchange rate movements.