International Trade and Economic Integration
Most-Favored-Nation (MFN) and Anti-Dumping
Most-Favored-Nation (MFN): Treating other people equally. “Under the WTO agreements, countries cannot normally discriminate between their trading partners. Grant someone a special favor (such as a lower customs duty rate for one of their products) and you have to do the same for all other WTO members.” (WTO)
Anti-dumping: In economics, “dumping” is a kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers
Read MoreAnalysis of Declining U.S. Export Market Share (1984-2010)
Overview
From 1984 to 2010, the U.S. share of global exports of goods fell by almost one-third. It remained relatively stable at around 12 percent through 1999, then dropped 3.5 percentage points between 2000 and 2010. Data on the export of certain services reveals a similar decline in the U.S. services market share during the 2000-2008 period, falling from approximately 25 percent to just above 5 percent. This decline across both goods and services suggests factors beyond a simple shift from manufacturing
Read MorePortfolio Management and Investment Strategies
Week 1: Portfolio Management and Investment Basics
Portfolio Management Steps:
- Evaluate client characteristics
- Assess market opportunities
- Define objectives and constraints
- Set overall investment strategy, including asset allocation
- Select investment managers and investment vehicles
- Implement strategy
- Measure and evaluate performance
- Monitor and adjust
Investment Policy vs. Strategy
Investment policy = long term, investment strategy = short term
Investment Objectives
- Stability of principal
- Income
- Growth of income
- Capital
Option Pricing and Call-Put Parity: A Guide
Options
Kinds of Options
Calls and puts are the two simplest forms of options, often referred to as vanilla due to their commonality. There are many other types of options, some of which will be discussed later. Other terms used to describe contracts with some dependence on a more fundamental asset are derivatives or contingent claims.
Vocabulary
- Premium: The initial amount paid for the contract. Determining this value is a significant focus of this resource.
- Underlying (asset): The financial instrument
Multinational Corporations and International Finance
Multinational Corporations (MNCs)
A Multinational Corporation (MNC) has facilities and other assets in at least one country other than its home country. Such companies have offices and/or factories in different countries and usually have a centralized head office where they coordinate global management.
Very large multinationals have budgets that exceed those of many small countries. The 100 largest international companies comprise over 6 million employees outside their country of origin and generate
Read MoreTypes & Costs of Financial Capital: A Guide for Entrepreneurs
Chapter 7: Types and Costs of Financial Capital
Exam:
- Estimate the cost of publicly traded equity capital (exchange-listed common stocks)
- Explain how capital costs combine into the weighted average cost of capital (WACC)
- Understand venture investors’ target returns and their relation to capital costs.
Implicit vs. Explicit Financial Costs:
- Formal accounting includes explicit records of debt (interest & principal) & dividend capital costs.
- No provision is made to record the less tangible expense