financial flows Flashcards
what are the three main types of financial flows?
portfolio, foreign exchange, and FDI (foreign direct investment)
what is meant by portfolio investment?
portfolio investment is investment in companies worth less than 10%
what is the difference between portfolio investment and FDI?
portfolio is investment worth less than 10% and FDI is investment worth more than 10%
what is meant by foreign exchange flows?
foreign exchange flows is the exchange of different currencies
what is the daily turn over in currency flows and how much of this is speculation?
the daily turn over in foreign exchange markets is $5 trillion (USD) and approximately 95% is speculation
how have financial flows enhanced the volatility of the global economy?
the ability financial flows have given significant funds to be exchanged for speculative purposes have increased the volatility of global financial markets and has been blamed for numerous large currency falls
