International Finance REVISION FOR GRADUATION EXAMINATION.

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Presentation transcript:

International Finance REVISION FOR GRADUATION EXAMINATION

Lecture 1 BOP Current Account Capital Account

Lecture 2 1. Factors Affecting International Trade Flows Inflation National Income Government Restrictions Exchange Rates 2. Factors affecting International Capital Flows Factors Affecting DFI Factors Affecting International Portfolio Investment

Lecture 4 Factors that Influence Exchange Rates Relative Inflation Rates Relative Interest Rates Relative Income Levels Government Controls Speculating on Anticipated Exchange Rates

Lecture 5 1. Government Intervention Direct Intervention Indirect Intervention 2. Intervention as a Policy Tool Influence of a Weak Home Currency on the Economy Influence of a Strong Home Currency on the Economy

Lecture 6 International Arbitrage Locational Arbitrage Triangular Arbitrage Covered Interest Arbitrage

Lecture Parity Conditions Interest Rate Parity (IRP) Purchasing Power Parity (PPP) International Effect 2. Comparison of parity conditions

Lecture 10 Political Risk Factors Attitude of Consumers in the Host Country Attitude of Host Government Blockage of Fund Transfers Currency Inconvertibility War Bureaucracy Corruption

Lecture 10 Financial Risk Factors Current and Potential State of the Country’s Economy Indicators of Economic Growth Types of Country Risk Assessment Macro-Assessment of Country Risk Micro-Assessment of Country Risk

Graduation Examination Multiple Choices: 10 Qs10 marks Short Answer: 1 Q 8 marks Applications:1 Q15 marks

MCQ Theoretical questions Calculation questions Change in the exchange rate Bid-Ask spread Forward premium/ discount Cross Exchange rate Change in the exchange rate with parity Forward premium/ discount with parity Country risk rating Locational arbitrage profit

Short Answer Factors Affecting International Trade Flows - Lecture 2 Factors affecting International Capital Flows - Lecture 2 Factors that Influence Exchange Rates - Lecture 4 Speculating on Anticipated Exchange Rates - Lecture 4

Problem Arbitrages - Lecture 6 Triangular Arbitrage Covered Interest Arbitrage