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Ch 20: International Corporate Finance

About This Chapter

Our International Corporate Finance chapter uses video lessons to explore how companies manage their exposure to financial risk while dealing across international borders and in different currencies.

International Corporate Finance - Chapter Summary and Learning Objectives

The international financial system enables businesses to operate on a global scale. This chapter looks at various parts of the system and explores transactions, risks, and the risk management strategies companies use to navigate the international marketplace. The lessons were created by experienced instructors who are available to answer your questions as you progress. Topics in the chapter include:

  • Doing business in multiple currencies
  • Relative values of different currencies
  • Dealing with different interest rates in different countries
  • Allocating capital across international borders
  • Exploring risks from exchange rates and political situations

Video Objective
Foreign Currency Exchange: Supply and Demand for Currency Learn about exchange rates and types of transactions.
What is Purchasing Power? - Definition & Parity Theory Define purchasing power and relate it to parity theory.
Interest Rate Parity, Forward Rates & International Fisher Effect Explain issues related to types of interest rates and how they influence international business decisions.
International Capital Budgeting: Approaches & Exchange Rate Risk Study methods of allocating capital resources across borders and dealing with exchange rate risk.
Exchange Rate Risk & Forms of Exposure Explore different types of exchange rate risks and strategies to manage them.
International Corporate Finance & Political Risk Discuss how politics puts international business at risk.

6 Lessons in Chapter 20: International Corporate Finance
Test your knowledge with a 30-question chapter practice test
Foreign Currency Exchange: Supply and Demand for Currency

1. Foreign Currency Exchange: Supply and Demand for Currency

In this lesson, you'll learn why money from different countries has different values of exchange. We'll cover the supply and demand for currencies and how changes in supply and demand can affect the exchange rates between currencies.

What is Purchasing Power? - Definition & Parity Theory

2. What is Purchasing Power? - Definition & Parity Theory

In this lesson, we'll be looking at purchasing power, which is used for computing the value of currency. After the lesson, you can test your knowledge with a short quiz.

Interest Rate Parity, Forward Rates & International Fisher Effect

3. Interest Rate Parity, Forward Rates & International Fisher Effect

How do interest rates affect companies that do business in multiple countries? In this lesson, we'll look at exchange and interest rates, including interest rate parity, the international Fisher effect, and interest arbitrage.

International Capital Budgeting: Approaches & Exchange Rate Risk

4. International Capital Budgeting: Approaches & Exchange Rate Risk

International businesses face risks that domestic companies don't. In particular, the exchange rate can pose a risk for multinational corporations. In this lesson, we'll examine the home currency approach and how it can help mitigate this risk.

Exchange Rate Risk & Forms of Exposure

5. Exchange Rate Risk & Forms of Exposure

International businesses face certain risks, including the risk of exchange rates being unfavorable. In this lesson, we'll explore forms of exchange rate exposure, including short-run, long-run, and translation exposure.

International Corporate Finance & Political Risk

6. International Corporate Finance & Political Risk

Multinational corporations face risks to their financial bottom line thanks to politics and political risk in different countries. In this lesson, we'll look at common sources of political risks for companies and how they can impact companies.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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