1. International Financial Markets Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall

2. International Business 5e Chapter 9 - 2 Chapter Preview Discuss the international capital market Describe the international bond, international equity, and Eurocurrency markets Identify the foreign exchange market’s functions Explain currency quotes and the rates given Identify the instruments of foreign exchange Discuss government restrictions on currencies

3. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 9 - 3 Capital Market Debt: Repay principal plus interest  Bond has timed principal & interest payments Equity: Part ownership of a company  Stock shares in financial gains or losses System that allocates financial resources according to their most efficient uses

4. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 9 - 4 International Capital Market Network of people, firms, financial institutions, and governments borrowing and investing internationally Borrowers  Expands money supply  Reduces cost of money Borrowers  Expands money supply  Reduces cost of money Lenders  Spread / reduce risk  Offset gains / losses Lenders  Spread / reduce risk  Offset gains / losses

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