Multinational Finance and International Business Flashcards
The process of identifying and minimizing potential financial risks faced by international businesses.
Risk Management
The strategy of producing goods in countries with the lowest labor and production costs.
Outsourcing
The international factor that includes government policies, trade restrictions, and taxation laws.
Political Risk
The risk that arises due to changing interest rates, inflation rates, and global economic shifts.
Economic Risk
The uncertainty a company faces when investing in a country with an unstable political environment.
Country Risk
The economic benefit of spreading investments across multiple countries to reduce business risk.
Risk Diversification
A multinational business model where a company owns the entire supply chain, from raw materials to finished products.
Vertical Integration
The financial transaction where a company raises money by selling stocks or issuing bonds in foreign markets.
Foreign Capital Raising
The economic effect that occurs when a multinational company’s foreign earnings are affected by currency fluctuations.
Translation Exposure
The legal process where multinational companies ensure compliance with foreign trade regulations.
Regulatory Compliance
The international economic strategy where governments lower tariffs to promote global trade.
Trade Liberalization
The organization responsible for maintaining global financial stability through trade agreements and economic policies.
World Trade Organization (WTO)
The type of international investment where a company establishes physical assets in a foreign country.
Foreign Direct Investment (FDI)
The practice of pricing imported and exported goods to maximize tax efficiency and avoid trade barriers.
Transfer Pricing
The financial institution responsible for setting global interest rates and providing emergency loans to countries in crisis.
International Monetary Fund (IMF)
