Globalization of Capital Markets Flashcards
1
Q
what are capital markets?
A
Bring together providers of capital (investors) and users of capital (borrowers)
Examples:
- Stock markets
- Bond markets
- Commodities
- Money markets
2
Q
What are the limitations to domestic capital markets?
A
- Limited by size and wealth of domestic residents
- Limited supply of domestic capital increase cost
- Providers are limited to domestic investment opportunities
3
Q
What is the global capital market?
A
Interconnected set of financial institutions and notional markets that permit the TRADING OF SECURITIES AND OTHER FINANCIAL ASSETS between investors and borrowers world-wide
4
Q
What are the two formal international financial markets:
A
1) Eurodollar Market (Euromarket)
2) Eurobond Market (International Bond Market)
- Long-term loans outside borrower’s home country
- Offered in most major currencies
