International Finance Question Coursework Example | Topics and Well Written Essays - 250 words

International Finance Question - Coursework ExampleWhen compared to a bank loan a bond tends to give the investor better terms, in loans the bank set the interest rates where else when a connection issues a bond, the company controls the interest rates (Levi, 2009). Foreign bonds are also a good manner of funding expansion to new(prenominal) countries because they protect the firm from currency fluctuation in the country of interest. The greatest disadvantage of bonds, however, is that it will reduce the firms trading flexibility. This is because the firm cannot trade out of a bond that is doing well while it maintains its other holdings (Levi, 2009).The second option that a firm can seek is getting money from private investors. They provide a flexible source of capital compared to what is provided by banks and other financial institutions. Loans from private sectors are often available at low costs (Levi, 2009). Acquiring monetary resource from private investors is a simple proc ess when compared to banks. A firm will save a considerable amount of time and money when acquiring the loan. The disadvantage associated with this option is that private investors might ask for an will power stake in the company, and this is not usually acceptable with many firms. The second disadvantage is that the investor may take on time to consider the request this time may not be available to the firm if the pip is of urgency (Levi,