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NON RATIONAL DECISION MAKING

Non Rational Model:

The non-rational models of managerial decision making suggests that information-gathering and processing limitations make it difficult for managers to make optimal decisions.

Read more: MGT503-Princilpes of Management-Lecture Handout No 18

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REGIONAL AND ECONOIC INTEGRATION

Learning objectives:

1. Describe how demand and supply determine the price of foreign exchange.
2. Discuss the role of international banks in the foreign-exchange market.
3. Assess the different ways that firms can use the spot and forward markets to settle international transactions.
4. Summarize the role of arbitrage in the foreign-exchange market.
5. Discuss the important aspects of the international capital market.

IMPORTANT TERMS:

1. Foreign exchange is a commodity that consists of currencies issued by countries other than one’s own. The exchange rate is the price of one currency in terms of another, at the equilibrium price of the foreign currency.
2. A direct quote is the price of the foreign currency in terms of the home currency, while an indirect quote is the price of the home currency in terms of the foreign currency

Introduction:

1. Traditionally, different countries have different currencies (although the appearance of the EU and the euro have dramatically decreased the number of international currencies that most people will use). If you have examples of different currencies, these can be shown or passed around. Students are particularly intrigued by the pictures of foreign rulers on foreign currency, many of whom they have never heard of.



Read more: MGT520 - International Business - Lecture Handout 41