International Trade Finance & Investments

International Trade
Finance and Investment

EXECUTIVE SUMMARY
This report summarizes that international trade or finance is a incorporation of trade
activities globally. It involves capital allocation with domestic or international markets.
Financial markets enable improvement in income generation capacity of nation. It involves
money as well as capital market. Apart from it, there are various factors of capital allocation in
an international and domestic market.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
Table of Contents.............................................................................................................................3
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Background of financial market:.................................................................................................4
Allocation of capital within domestic economy:.........................................................................6
Allocation of Capital within International markets:....................................................................7
TASK 2............................................................................................................................................8
Evaluation of Economy:..............................................................................................................8
Critically evaluating the challenges that is faced by country because of industrialisation and
trade policies:...............................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
International trade financing can be explained as that market which is incorporated across
borders of nation. It expands trading process of nation and explores new area of income
generation and investment proposals for country. This report is based on analysis of international
trading and financing of United Kingdom with international market(Bhattacharya and
Mukherjee, 2016). It evaluates background of financial markets which is a potential platform for
the purpose of security trading as it enhances liquidity creation in country. It states various forms
of financial markets along with their description. Further, capital allocation areas utilised by
United Kingdom is identified in context to both, domestic economy as well as international
market. In addition to it, economic evaluation is conducted for chosen international market. And
lastly, challenges faced by country due to implementation of policies related to industrialisation
as well as trade is evaluated.
TASK 1
Background of financial market:
Financial markets can be explained as a marketplace which enables security trading that
includes stock, bond, forex as well as derivatives markets. Financial market is an essential
platform for the purpose of smooth operations for capitalist economies by allocation of resources
and creation of liquidity for enterprises (Cohn, 2017). Such markets make it easier for buyers as
well as sellers for trading of financial holdings. Financial markets help in creation of securities
which provides return for excessive funds, that is, investors and also makes such funds available
to individual that desires additional fund, that is, borrowers. Numerous types of instruments
related to finance are purchased and sold at this platform, it involved, derivatives, equities,
currencies as well as bonds. Financial markets are of basically five types, that is, over the
counter, bond market, money market, derivatives markets and forex markets. OTC or over the
counter refers to decentralized market which does not pertain physical location (Ehigiamusoe
and Lean, 2018). Trading in this market I conducted electronically and participants here consists
direct trading of securities, hence, broker is not required. In bond security money is loaned by
investors for a specific period and interest rate for the same is pre-established. In other words,
bond indicates an agreement among borrower and lender which incorporates loan details as well
as record of its payment. In money market, trading is done with products that pertains high