FIE433 International Finance

• Topics

  The course is built around the following five main topics:

  • Introduction to Foreign Exchange Markets and Risks
  • International Parity Conditions and Exchange Rate Determination
  • International Capital Markets
  • International Corporate Finance
  • Foreign Currency Futures

• Learning outcome

  The course introduces students to the conceptual framework in which financial decision making of international firms takes place. Students will learn to assess the riskiness of a currency from a firm's perspective and how to manage this exposure. In addition to the theoretical underpinnings of international finance we will cover the practical side of international financial decision making - the investment and funding problem. Thus, typical problems of global funding and international investment strategies as well as capital budgeting and capital structure issues will be analyzed from an international perspective. The course provides a basic understanding of international financial markets and institutions and aims particularly on international risk assessment (currency risk, political risk) and management.

  Upon successful completion of the course, students shall have:

  Knowledge

  • Gained insights into the financial risks and opportunities of a multinational company
  • Learned how to assess and manage financial risks
  • Familiarity with typical international financial instruments
  • An understanding of the application of these instruments in a global context

  Skills:

  • The understanding how current international monetary systems function
  • The ability to apply tools for measurement and management of currency risks
  • The knowhow to make use of financial instruments available for internationally operating firms: equity instruments, debt instruments and derivatives
  • The skills for investment-decision making in an international context
  • The ability to conduct a financial analysis
  • The ability to analyze situations dealing with problems of international firms

  Competencies:

  • Use the ideas and techniques of financial economics and international finance to deal with applied real-world problems.

• Teaching

  Lectures, Tutorials and Class Discussions.

• Recommended prerequisites

  There are no formal prerequisites for the course but students are expected to be familiar with

  basic finance concepts (e.g. time value of money; capital asset pricing model; project valuation)

  typically covered in most bachelor-level finance courses (or, alternatively, in FIE402 or FIE400).

• Requirements for course approval

  None

• Assessment

  Three hours written school exam. The exam will be written in English and has to be answered in English.

• Grading Scale

  Grading scale A - F.

• Literature

  Textbook: "International Financial Management" by Geert Bekaert and Robert Hodrick, Second Edition (Pearson)

   

  Additional reading assignments will be handed out in class.