International Trade, Finance & Investment

International Trade,
Finance & Investment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Financial markets work to allocate capital within a domestic economy and internationally for
trade, investment, and development purposes.............................................................................1
TASK 2............................................................................................................................................7
Evaluation of economy...............................................................................................................7
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
International trade is an exchange of goods and services across international borders
because there is requirement or need of goods and services. It is a method of economic
interaction between foreign organizations and link with economic activities. International finance
for monetary transactions that transpire between two or more organisations. It is focusing on the
particular areas like foreign direct investment and currency exchange rates (Alexander and
Eberly, 2018). International investment is investment strategy use by different investors to
purchase different things. These terms are based on each other and important for economy. The
main aim of the report to understand the concept of the international trade, finance & investment
in depth manner that helps to understand UK economy to target future clients. In this assignment
consist of financial market work to allocate capital within a domestic economy. Along with
critically analysis of UK economy to analysis key challenges faced by a nation because of
industrialization and trade policies.
TASK 1
Financial markets work to allocate capital within a domestic economy and internationally for
trade, investment, and development purposes
Financial market defined as a marketplace where creation and trading of financial assets
like shares, derivatives, bonds and many others. It presents as a mediator in between investors
and savers by mobilising funds between them. At this market provides a platform to purchaser
and sellers to meet and trading of assets as per the demand and supply.
There are identified various types of financial market that operated by country as per their
economy. These market plays crucial role in economy that are explained below:
 Stock market: It refers to the collection of exchanges and markets where conducting
regular activities like buying, selling and issue of share of public organisations. These
financial activities are operated by over the counter (OTC) marketplaces that conduct
under a set regulations.
 Bond market: In this market people get various opportunities where investors purchase
debt securities that are carried out to the market by government institutions. Different
organisations issue their bond in this market to enhance their capital and maintain growth
in product lines (Alstadsæter, Jacob and Michael, 2017).
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 Commodities market: This marketplace exists in physical and virtual manner for
purchasing and selling and trading of raw and primary items. In present time about 50
major commodity markets operated by different countries at worldwide level that
facilitate trade in approx 100 primary commodities.
 Derivative market: It is a part of financial market where financial instrument conduct
different underlying assets and financial derivatives. In this market prepare agreement
that based on market value assessed by company.
Background of financial market:
The financial market is that place where dealing in money and other financial activity
takes place. Therefore, it is most essential for business entity to focus on investment at the
market. As a result it will help to achieve their financial goals and objectives effectively.
Different financial institutions are part of financial market like Banks, financial companies and
many others. Banks, capital and money work in effective way and effective allocation of money
within an economy. These terms are essential for economy because it helps to select right way to
do work in smooth way.
Forms of money: There are identified different forms of money such as, Fiat, commodity and
fiduciary money. These forms of money is essential for economy to understand right way for
different activities.
Purpose of money: The main reason of money to fulfil the requirement of economy and conduct
various types of activities that depend on the money. Therefore, all the desires based on money
that supports to assure about demand generations works effectively (Beeson and Li, 2016) (Boot
and Ratnovski, 2016).
The UK is one of the biggest financial market in the world for fund management along
with US and Japan. As per the measurement UK assets under management about $11.8 trillion in
the year of 2017 and has strong international atmosphere. The financial market of United
Kingdom plays leader role in a different financial services.
The presence of financial market in economy provide various opportunities of growth and
investors get success for longer period of time. In this way the economy become witness for long
term growth when different kinds of financial market are performing effectively. Therefore, it is
essential that all the activities and functions are conducting properly in financial market that
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