Countries around the world historically used the Gold standard (1890-1914), which, however, was changed to fixed exchange rate system through Bretton Woods since the WWII. The Bretton Woods System collapsed and most countries around the world today use either a clean float or dirty float as an exchange rate system. While removing FX controls and increasing economic integration enable investors to roam around the world, this also means that investors and countries face diverse challenges, risks and uncertainties, which they have to manage through different tools (e.g., measuring country risk and using debt management strategies such as Paris and London Club, debt-for-debt swap and debt-for-equity swap). Generating profits from investments is becoming increasingly challenging even from international diversification. Hence, some investors prefer to tilt towards their home assets (home bias). Highlight the key differences between the following terms:

• Gold standard vs Bretton Woods
• Clean float vs dirty float
• Paris vs London Club
• International diversification vs home bias