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Domestic Financial System Definition: The network of institutions, markets, and regulations within a specific country that facilitates the flow of funds between savers and borrowers. It operates primarily within the geographic and jurisdictional boundaries of ...

This section focuses specifically on the rise and development of Multinational Corporations. Defining Multinational Corporations MNC Definition: A company that operates (owns assets or conducts business) in at least one country other than its home country. K...

Internationalization of Business and Finance This section focuses on the broader trends of internationalization in business and finance. Defining Internationalization Internationalization of Business: The process of expanding business activities across natio...

Participants in the Financial System These are key participants in the broader financial system, categorized by their primary function: Investment Banks Provide advice and arrange finance for companies: Floating on the stock market (IPOs). Raising additional...

Technological Advances Technology and the demand for greener solutions are fundamentally reshaping the financial services sector. Advances in technology have radically altered how we use the internet and communicate, leading to the disruption of traditional in...

Factors Determining Economic Activity & Economic Systems Factors Influencing Economic Growth Key Idea: A country's ability to grow its economy is influenced by various characteristics and resources. Demand-Side Factors: Examples: Consumer spending, investm...

The Economic Cycle and Economic Policy The Economic Cycle (or Business Cycle) The economic cycle refers to the fluctuations in economic activity that an economy experiences over time. It's a recurring pattern of expansion and contraction. Think of it like a ro...

Balance of Payments (BoP) and Exchange Rates Balance of Payments (BoP) What is the BoP? Definition: A record of all economic transactions between a country and the rest of the world over a specific period (usually a year). Key Purpose: Summarizes a country'...

Country Risk Analysis What is Country Risk? Definition: The risk associated with investing or doing business in a particular country, encompassing the potential for losses due to factors specific to that country. Key Aspect: Goes beyond standard business r...

Key Indicators of Country Risk The following points outlines key indicators used to assess the overall risk of a country. These indicators are crucial for businesses, investors, and policymakers when making decisions related to international trade, investment,...

Risk Analysis in International Trade I. Economic Risk Definition: The risk that economic factors in a country will negatively impact international trade activities or investments. Key Indicators for Analysis: Stability and Solvency of Banks: Significanc...

Company Formation and Features I. Capital Structure of a Company General: A company's capital is funded by a combination of borrowing and investments from its owners. Long-Term Borrowing (Debt): Typically referred to as bonds. Owner Investments (Equity)...

Benefits of Owning Shares, Risks of Owning Shares, and Corporate Actions I. Benefits of Owning Shares Ownership: Holding shares means having an ownership stake in a company, which carries certain benefits and rights. Ordinary Shareholders: Expected to be th...

Definition of a Bond and Associated Risks I. Definition of a Bond Basic Definition: A bond is essentially a loan. Issuer: A company or government that needs to raise money can issue a bond, borrowing from the investing public. Investor: An investor lends m...

Types of Bonds This document outlines various types of bonds, categorized by issuer, interest payment structure, and other key characteristics. Understanding these different types is crucial for investors looking to build a diversified portfolio and manage ris...

Other Financial Assets: Cash Deposits and Property I. Cash Deposits Definition Accounts held with banks or other savings institutions. Held by a diverse range of depositors (retail investors, companies, governments, etc.). Characteristics Return: Primarily...

Overview of Investment Funds I. Direct vs. Indirect Investment Direct Investment: Individual investors personally buy assets (e.g., shares in a company). Example: Buying shares of Apple. Indirect Investment: Individual investors buy a stake in an invest...

Open-Ended Funds, Closed-Ended Funds, and REITs I. Open-Ended Funds Definition: Investment funds that can issue and redeem shares at any time, expanding or contracting based on investor demand. Pro Rata Share: Each investor has a proportional share of the u...

Exchange-Traded Funds (ETFs) I. What are Exchange-Traded Funds (ETFs)? Definition: An investment fund designed to track the performance of a specific index, sector, or asset class. Trading: Shares of ETFs are bought and sold on stock exchanges, similar to i...

Alternative Investment Funds (AIFs): Hedge Funds and Private Equity I. Hedge Funds Overview Reputation: Often perceived as high-risk investments, but strategies vary widely. Original Purpose: To reduce or eliminate market risk. Current Landscape: Diverse r...