Financial Flows

Question 1

3 financial flows

Answer 1

foreign exchange
portfolio investment
foreign direct investment (FDI)

Question 2

portfolio investment

Answer 2

any form of investment in a company that is worth less than 10% of that company

Question 3

foreign direct investment (FDI)

Answer 3

the movement of funds between economies for the purposes of establishing a new company or buying a substantial proportion of share (more than 10%) in an existing company

Question 4

foreign exchange flows

Answer 4

exchanging currency in order to gain profit, exchange rates are determined within this market

Question 5

what is the daily turnover in currency flows and how much of this is speculation?

Answer 5

approx. $5 trillion and about 95% are speculative

Question 6

how have financial flows enhanced volatility in the global economy?

Answer 6

the significant flow of funds for speculative purposes has increased the level of volatility in global financial markets