1. International Finance
Investing Globally

2. Why Invest Internationally?
Diversification
Markets in different countries are not perfectly correlated
Benefit to diversification
Foreign markets have more growth potential
Hedge against declining $

3. International Diversification Reduces Risk
100% Foreign
E(R)
50% Foreign
80% U.S.
90% U.S.
100% U.S. 

4. How to Invest Internationally
Direct purchase of foreign stocks
ADRs
Invest in MNC stocks
ETFs
International mutual funds

5. Factors Affecting International Investments
Taxes
Local tax rate on interest and dividends
U.S. treatment of foreign investment income
Interest rates
Exchange rates