International finance differs from domestic finance in several aspects, with one of the most significant disparities lying in foreign currency exposure. In international financial management, there’s extensive involvement with currency derivatives, whereas such instruments are far less prevalent in domestic financial management.
Moreover, the scope of international finance extends beyond borders, involving cross-border transactions and operations. This includes dealing with exchange rate fluctuations, trade agreements, and international regulatory frameworks that are not pertinent to domestic finance.
Additionally, political and economic factors play a crucial role in international finance, influencing investment decisions and risk assessment. These factors can range from government policies and trade tariffs to geopolitical tensions, all of which impact global markets and require specialized knowledge and strategies.
(Response: The primary differences between domestic finance and international finance lie in foreign currency exposure, the scope of operations extending across borders, and the influence of political and economic factors on investment decisions.)