International Finance

FIE433 International Finance

  • Topics

    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

    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.

     

    Knowledge and understanding

     

    After completing this course, the student will have

    • 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

     

    Cognitive and subject specific skills

     

    Students on completion of the course will have

    • 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

  • Teaching

    Teaching

    Lectures, Tutorials and Class Discussions.

  • Required prerequisites

    Required 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

    Requirements for course approval

    There will be up to 5 homework assignments during the term, which students have to solve individually.

  • Assessment

    Assessment

    There is a four-hour long written final exam. The exam will be written in English and has to be answered in English.

     

    The course yields one overall grade, which is based 80 percent on the final exam and 20 percent on the homework assignments.

  • Grading Scale

    Grading Scale

    Grading scale A - F.

  • Semester

    Semester

    Spring.

  • Literature

    Literature

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

     

    Additional reading assignments will be handed out in class.

Overview

ECTS Credits
7.5
Teaching language
English
Semester
Spring

Course responsible

Uwe Walz, Department of Finance