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Unit information: International Finance in 2018/19

Please note: It is possible that the information shown for future academic years may change due to developments in the relevant academic field. Optional unit availability varies depending on both staffing and student choice.

Unit name International Finance
Unit code EFIM30026
Credit points 10
Level of study H/6
Teaching block(s) Teaching Block 2 (weeks 13 - 24)
Unit director Professor. Ozkan
Open unit status Not open
Pre-requisites

Corporate Finance (EFIM20006)

Co-requisites

None

School/department School of Economics, Finance and Management
Faculty Faculty of Social Sciences and Law

Description

This module returns to the parity conditions introduced in Corporate Finance, describing the key theoretical relations among spot exchange rates, forward exchange rates, inflation rates and interest rates. It then moves on to look at country risk, foreign exchange markets, foreign currency derivatives, and international capital markets.

Intended learning outcomes

On successful completion of this unit a student will be able to:

  • understand how parity conditions work.
  • understand advantages and disadvantages of currency futures contracts relative to forward contracts.
  • understand how currency futures and option contracts can be used to manage risk and to speculate on future currency movements.
  • understand how interest rate and currency swaps can be used to reduce financing cost and risk.
  • understand how multinational corporations can use international debt and equity markets to raise financing.
  • understand risks and advantages of international portfolio investing.

Teaching details

10 Lectures

5 Classes

This pattern of teaching may be changed slightly to accommodate the Easter Vacation.

Assessment Details

Formative: Students do group presentations and hand in their answers for tutorial sets.

Summative: 1.5-hour written exam (100%)

All learning objectives are assessed by both summative and formative assessment

Reading and References

Text-books:

International Financial Management, Geert Bekaert and Bob Hodrick, Prentice-Hall, 2012, Second Edition.

Multinational Financial Management, Alan C. Shapiro, 9th edition, Wiley -International student version.

Indicative journal articles for tutorials

  1. “Financial constraints and growth: Multinational and local firm responses to currency crises”. Review of Financial Studies, 2008.
  2. “Capital structure with risky foreign investment”. Journal of Financial Economics. 2008.
  3. "The limits of financial globalization," Journal of Applied Corporate Finance, 2007.
  4. “Should we fear derivatives?” Journal of Economic Perspectives, 2004.
  5. “Six ways companies mismanage risk”, Harvard Business Review, March 2009.
  6. “Emerging equity markets in a globalizing world" Working paper, 2014. Geert Bekaert and Campbell Harvey.
  7. “Beyond economics—Factoring politics into investment strategies”. Mc Kinsey Qurterly 2009

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