International Trade and Finance: Capital Allocation and Market Analysis

International Trade
Finance & Investment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Types of financial market............................................................................................................3
Capital allocation within domestic economy...............................................................................4
Capital allocation by UK within International Market................................................................6
TASK 2............................................................................................................................................8
Evaluation of China economy related to financial trading..........................................................8
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
International trade finance is approach that helps in structuring complex trade transaction
to the stakeholder that involves importers, exporters and trading companies. This known as ITF
experienced team that supports in providing trade finance globally and creates flexibility and
innovation (Abeliansky and Martínez-Zarzoso, 2019). In this report, it is discussed about the
international investment that relates to certain types of investment proposal of in which investor
diversify his portfolio by purchasing various financial instruments like share, mutual bonds to
acquire ownership in different companies across the globe. It provides the opportunities to
capitalize the performance of foreign economy. In this report it is discussed about the different
financial market in the country and the way in which they allocate the domestic economy and
international trade for the purpose of investment and development purpose. It is being discussed
other country economy and its challenges faced by them according to the industrialisation and
trade policies
TASK 1
Types of financial market
Financial market refers to the marketplace where the activities related to creation of
different financial assets such as bonds, share, commodities, currencies and derivatives. It
depends on the economy of the countries that used to traded daily in the financial market some
examples are National Stock Exchange, New York Stock exchange etc. These are independent
regulatory bodies with strict bodies and rules. Types of financial market are as follows-
 Money market- This type of financial market for lending or borrowing short term loans
with maturity of less than 1 year. They used to deal with money market such as Treasury
bills, Commercial Papers, Certificate of deposit, bills of exchange.
 Capital market- This types of financial market deals with trading of stocks and bonds.
This market used for the to lending and borrowing of money for long-term and its spilt
into primary and secondary market (Accominotti and Ugolini, 2019). Many companies
issue shares in the form of equity or preference shares or fixed interest- bearing bonds in
the primary market.

 Derivatives market- This types of financial market concern with te trading of future,
options, forward contracts and swaps. This were derive their value from underlying asset
that used to monitor the financial risk.
Background of financial market
Financial market are important part that now consider by all companies to invest in many
ways which helps them to achieve their goals and objectives in proper manner. Banks, Capital
and money work in different way so that they able to allocate their capital effectively. Some
forms of money are Commodity money, Fiat and Fiduciary money.
Purpose of money
The main purpose of money is to use the best way to invest them to make maximum or
optimum use of money in order to regulate the economy the in appropriate manner (Ahn, 2020).
This helps in ensuring that demand is adequately meet with the supply of money.
In the context of UK, financial market is greatly present in the different organisation and
all of them were using them effectively to get the benefits from it. They used to contribute to it in
order to fulfil the better productivity in management. In the year, 2007 country has face financial
crisis, where market go wrong and cause big problem and this make market fragile. This meant
for economic lower and banks are less willing to provide loans to household. So,here financial
market has played important role when it is being necessary to provide information about
financial market and people are start talking and understanding what is happening. Managing
market operations, where buying and selling the things will help the government to control the
situation of economy and that gives better results. The financial market helps the market in long
term as their consequences were visible after specific period of time. The right usage of them
will definitely going to help them in boosting their economy and after that many companies were
start using financial market. It covers around 20% of global and gives higher results in rate of
return on its capital apart from other developed economies. This is plays important role in
managing the private and investment banking and London has branches and subsidiary of 254
foreign banks that is more than New York.
Capital allocation within domestic economy
Domestic allocation of capital in UK will help the company in understanding the proper
use of money in the economy and that become important from the point of view every nations. In
this report the economy that is taken is UK, which id developed country with the Nominal gross