INTERNATIONAL FINANCIAL MARKETS

Motives of Financial Markets:

• Economic Growth
• Expectation of Exchange Rate
• International Diversification

Motives for Providing Credit to International Market:

• High Interest Rate
• Exchange Rate
• Diversification

History of Exchange Markets:

Exchange Rate Definition:

          The value of one currency with the respect of other currency of country.

1. Gold Standard:

           (1876-1913) before world war 

       The currency should be converted into gold.

   

     2.  Fixed Exchange Rate:

               

              (1971-1973) according to smith son agreement the currency was made to exchange.

     3.  Floating Exchange: 

        After to (1973) the currency have been exchange according to law of demand and supply.