International Finance Critics of the field of international finance charge that the field is simply "corporate finance with an exchange rate."

• Critique this statement.
• Do you agree or disagree with it? Why?
• Justify your answer with specific details.

Initial Public Offering

One method utilized by companies to obtain the long-term capital necessary to run and grow their businesses is by providing the general public with the option to purchase stocks. The company's first sale of stock is known as the initial public offering (IPO). When a company first offers the IPO, stocks are, on average, underpriced.

• Discuss the implications of such underpricing to established theories of market efficiency.
• Explain the role market efficiency might play in the underpricing theories presented by Loughran and Ritter.