Investing in International Financial Markets

financial markets has a major impact on MNCs. First, this type of trading can influence the level of interest rates in a specific country (and therefore the cost of debt to an MNC) because it affects the amount of funds available there. Second, it can affect the price of an MNC’s stock (and therefore the cost of equity to an MNC) because it influences the demand for the MNC’s stock. Third, it enables MNCs to sell securities in foreign markets. So, even though international investing in financial assets is not the most crucial activity of MNCs, international investing by individual and institutional investors can indirectly affect the actions and performance of an MNC. Consequently, an understanding of the motives and methods of international investing is necessary to anticipate how the international flow of funds may change in the future and how that change may affect MNCs.