an investment risk while maintaining a good return on investment. Hedging refers to managing risk to an extent that makes it bearable. In international trade and dealings foreign exchange play an important role. Fluctuations in the foreign exchange rate can have significant impact on business decisions and outcomes. Many international trade and business dealings are shelved or become unworthy due to significant exchange rate risk embedded in them. Hedging uses various techniques, it involves
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targeted party to yield to the team’s demands Advantages • Often results in negotiated agreements Disadvantages • easily seen through by targeted party • Can be countered easily by clearly exposing the negotiators’ plot • Distracts the negotiators from the negotiation goals Dealing with Good Cop / Bad Cop • openly exposing the negotiators’ plot 2. Lowball / Highball a. Starts the negotiation with a unreasonable low(high) opening offer Advantages • Aims to get the other party to re-evaluate
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Advantages and Disadvantages of Countertrade Countertrade is an umbrella term used to describe many different types of transactions each in “which the seller provides a buyer with goods or services and promises in return to purchase goods or services from the buyer”. It may or may not involve the use of currency, as in barter. By far the largest indirect method of exporting is countertrade. Competitive intensity means more and more investment in marketing. In this situation the organization
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Economic integration is abolition of various restrains of trade between nations. Economic integration occurs through the reduction of all obstacles to trade and to the free flow of capital and labor across countries, so when a group of countries abolishes all restrictions to trade and the free flow of capital and labor among themselves, they participate in what is called a common or single market. European economic integration begun in 1951 when trade restrictions on coal and steel were dropped between
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1. Why and how are the capital and current account tied together so closely? In the balance of payment, current account and capital account are tied together by an accounting identity. Current account on one side and the capital and financial accounts on the other side should balance each other out due to the double entry of each transaction. [ Current Account + Financial Account + Capital account + Official Reserve Account = 0 ] For example, if a country has a positive capital and financial
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FRAs don't permit purchasers or merchant to take advantage of favorable interest rate movement. (Cuthberson and Nitzsche, 2001; ACCA, 2007; Gay etal, 1983; Hull,
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ENTRY STRATEGIES 6 2.0 EXPORTING 6 2.1 Advantages and Disadvantages of Exporting 7 2.2 Passive exports Vs Aggressive exports 7 2.3 Direct and Indirect Export 8 2.4 Case Study 9 3.0 PIGGYBANKING…………………………………………………………………………………….10 4.0COUNTERTRADE……………………………………………………………………………………10 4.1 Forms of Countertrade…………………………………………………………………………….10 4.2 Examples of Countertrade…………………………………………………………………………11 4.3 Disadvantages of Countertrade……………………………………………………………………11
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dddddddddddddddddddddd Chapter 7: Market Entry Strategies Chapter Objectives Structure Of The Chapter Entry strategies Special features of commodity trade Chapter Summary Key Terms Review Questions Review Question Answers References Bibliography When an organization has made a decision to enter an overseas market, there are a variety of options open to it. These options vary with cost, risk and the degree of control which can be exercised over them. The simplest form of entry strategy
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6.0 INTERNATIONAL TRADE FINANCE Learning Objectives: At the end of the subject coverage learners should be able to: • Explain the ways in which international trade is undertaken, settled and financed; • Identify the types of customers engaged in international trade and their needs; • Explain the features and benefits of services provided by banks and other financial institutions in facilitating international trade; • Explain international payment
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edu/~irelandp/ec261.html Chapter 2: An Overview of the Financial System 1. Function of Financial Markets and Financial Intermediaries 2. Structure of Financial Markets Debt and Equity Markets Primary and Secondary Markets Exchanges and Over-the-Counter Markets Money and Capital Markets 3. Financial Instruments Money Market Instruments Capital Market Instruments 4. Role of Financial Intermediaries Transaction Costs and Economies of Scale Risk Sharing and Diversification Adverse Selection and Moral
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