Countries around the world historically used theGold standard(1890-1914), which, however, was changed to fixed exchange rate system through Bretton Woods since the WWII. TheBretton Woods Systemcollapsed and most countries around the world today use either aclean floatordirty floatas 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 asParis and London Club,debt-for-debt swapanddebt-for-equity swap). Generating profits from investments is becoming increasingly challenging even frominternational diversification. Hence, some investors prefer to tilt towards their home assets (home bias). Highlight thekey differencesbetween the following terms:

i)Gold standard vs Bretton Woods

ii)Clean float vs dirty float

iii)Paris vs London Club

iv)International diversification vs home bias