International Trade Finance and Investment

International Trade
Finance and Investment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................7
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
International Trade, Finance and Investment refers to the various parameters which are
related with finance and can be used by the financial investors (Acquah and Ibrahim, 2020).
These parameters are important for the investors to consider before making an investment
decision. This can help in maximizing the value derived from the investments. Thus in this way
this ensures that the overall level of goals and objectives which are related with funding and
investment can be attained in a highly effective manner. Thus it is quite important from the point
of view of the organizations that a deeper understanding of the finance and the overall financial
situation within the market can be developed in a proper manner. This thereby helps a lot in the
taking of different types of decisions in the future which will help a lot in the attainment of short-
term, medium-term and long-term goals and objectives of an organization in the future. In this
report, there will be detailed focus on understanding of the financial markets. Additionally,
specific analysis on challenges a country faces due to the industrialization will be discussed as a
part of this report.
TASK 1
Financial Market- Financial Market is a market in which there is a dealing in different
types of transactions (Alfaro and Chauvin, 2016). Thus in these type of markets it is quite
important that the various modes of investment are considered. Here the dealing in the various
types of financial assets such as shares, debentures, bonds, derivatives, currencies etc. are carried
out which helps in ensuring that the needs and requirements of the organizations related with
money can be fulfilled in a highly effective manner. There are different types of financial
markets which are present within a country. Some of them are explained as follows-
 Stock Market- It is the market in which the dealing in the overall stocks and shares of
the companies can be done highly effectively (Avdjiev and et.al., 2019). Thus the
companies are able to make sure that they can register themselves in this market and can
enhance their overall level of investments effectively and efficiently. They can ensure
that they raise their funds by listing their shares publicly within this market. The use of
Initial Public Offering i.e. IPO can be made by the companies to attract funds from the
public. This can be in the form of shares like Equity Shares, Preference Shares etc. each
of them having particular face value and market value. Thus it can be said that the Stock
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Market forms an integral part of the financial market for the purpose of making
investments.
 Bond Market- It is a market in which dealing in various types of bonds can take place
(Badarinza, Campbell and Ramadorai, 2016). Thus here the purchase and sale of the
bonds can take place properly which helps a lot in ensuring that the overall market can
function in the right manner ensuring the desired supply of funds to the companies
according to the level of demand. For the firms it is quite crucial that the bond market can
be managed in the right manner without problems and issues. This can be done by
ensuring that they get the desired funds through bonds whenever required by them.
 Commodities Market- This is the market where the dealing in the commodities like
corn, oil, gold etc. takes place (Bajo‐Rubio and Berke, 2018). The buying and selling of
these particular goods can happen within this particular market. Thus in this way it can be
said that the different types of companies can deal within this market to ensure that their
demand of the commodities can be met easily without problems and issues.
 Derivatives Market- This is a particular market where dealing in derivatives or contracts
takes place (Brewster, 2017). Therefore it is an important component of the financial
market which helps a lot in ensuring that the overall goals and objectives can be attained
without problems and issues.
The role of Central Bank is that it should regulate the various types of rates which will help a lot
in ensuring that the financial market is able to run smoothly and thus the overall management of
the finance can take place quite smoothly. This will help a lot in ensuring that the economy is
able to run in a smooth manner effectively and efficiently. This will lead towards ensuring that
the overall monetary and fiscal goals and objectives can be attained.
Capital Market is a market in which the trading of long-term equities and debts can take place in
the right manner. In this way it can help a lot in ensuring that the trading of these equities and
debts can be done properly. There is a need of Capital Market because this will help a lot in
ensuring that the companies are able to deal in the right manner with the long-term equities and
debts effectively and efficiently. The role of this market is that it should help in ensuring that the
long-term equities and debts can be managed appropriately for making the best decisions in the
future.
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