Question

how could an international bank facilitate an MNC's flow of funds in internatinal money market ,internatinal debt market ,internatioal equity market and international exchange market ?

Answer 1

The International bank facilitate an MNC's flow of funds in internatinal money market. The MNC may be able to earn a higher interest rate on funds invested in a financial market outside of its own country. In addition, the exchange rate of the currency involved may be expected to appreciate.
Example:If the Australian dollar appreciates over the investment period, this implies that the U.S. firm purchased the Australian dollars to make its investment at a lower exchange rate than the rate at which it will convert A$ to U.S. dollars when the investment period is over. Thus, it benefits from theappreciation. Its return will be higher as a result of this appreciation.
Financial institutions may believe that they can earn a higher return by providing credit in foreign financial markets if interest rate levels are higher and if the economic conditions are strong so that the risk of default on credit provided is low. The institutions may also want to diversity their credit so that they are not too exposed to the economic conditions in any single country . The function of the international money market is to efficiently facilitate the flow of international funds from firms or governments with excess funds to those in need of funds
The International bank facilitate an MNC's flow of funds in internatinal money market. The MNC may be able to earn a higher interest rate on funds invested in a financial market outside of its own country. In addition, the exchange rate of the currency involved may be expected to appreciate.
Example:If the Australian dollar appreciates over the investment period, this implies that the U.S. firm purchased the Australian dollars to make its investment at a lower exchange rate than the rate at which it will convert A$ to U.S. dollars when the investment period is over. Thus, it benefits from theappreciation. Its return will be higher as a result of this appreciation.
Financial institutions may believe that they can earn a higher return by providing credit in foreign financial markets if interest rate levels are higher and if the economic conditions are strong so that the risk of default on credit provided is low. The institutions may also want to diversity their credit so that they are not too exposed to the economic conditions in any single country . The function of the international money market is to efficiently facilitate the flow of international funds from firms or governments with excess funds to those in need of funds