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Commerce · Class 11 Commerce

Ch 20International Finance — Class 11 Commerce, concept-first.

A business that buys or sells only within its own country deals in a single currency, faces one set of laws, and can usually raise money from banks and investors it already knows.

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Foreign Exchange and Exchange Rate

Foreign exchange is the conversion of one country's currency into another so that an international transaction can be settled, and the foreign exchange market is the worldwide network of banks and dealers through which t…

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Chapter contents

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1

Meaning and Need for International Finance

A business that buys or sells only within its own country deals in a single currency, faces one set of laws, and can usually raise money from banks and investors it already knows.

2

Foreign Exchange, the Foreign Exchange Market and Exchange Rate

Every international transaction eventually requires one currency to be converted into another, because a seller ordinarily wants to be paid in its own home currency while a buyer usually holds a diffe…

3

Financing and Securing International Trade Transactions

When an exporter in one country sells goods to an importer in another country, both sides face a genuine trust problem that rarely exists in a purely domestic sale.

4

Foreign Direct Investment and Foreign Portfolio Investment

Once a business looks beyond financing a single trade transaction and starts raising longer-term capital across borders, two of the most important routes it can use -- or that a foreign investor can u…

5

External Commercial Borrowings, Depository Receipts and International Bonds

Beyond FDI and FPI, a business looking to raise international finance -- particularly a larger company that wants to tap global lenders and investors directly -- has several other well-established ins…

6

International Financial Institutions and Choosing a Source of International Finance

Alongside private banks, capital markets and foreign investors, a number of international financial institutions also play a role in providing finance to countries and, in turn, to businesses operatin…

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