Unit name | International Finance |
---|---|
Unit code | ECONM2031 |
Credit points | 15 |
Level of study | M/7 |
Teaching block(s) |
Teaching Block 2 (weeks 13 - 24) |
Unit director | Professor. Hill |
Open unit status | Not open |
Pre-requisites |
None |
Co-requisites |
None |
School/department | School of Accounting and Finance - Business School |
Faculty | Faculty of Social Sciences and Law |
As national economic boundaries have been eroded and the international elements of business have expanded, an understanding of the operation of international financial markets, how exchange rates are determined and how corporations measure and manage the risk associated with international operations have become increasingly important skills. This unit aims to provide students with a grounding in these skills. It begins with an overview of the current international financial architecture before providing an evaluation of standard macroeconomic models of exchange rates. A treatment of more recent research on the microstructure approach to exchange rates is then given. Theoretical models of target zones and optimum currenct areas are then treated. The unit closes with an examination of how those running businesses with a key international element can evaluate and control the risks they face through international transactions, for example using financial derivatives.
This unit aims to provide an overview of the current international financial architecture and the theories that attempt to explain exchange rate determination within that architecture. Further, it provides an analysis of how firms assess and manage the risk they face from international business dealings, for example using foreign exchange derivative transactions.
Having successfully completed this unit students should be able to:
Lectures and workshops
Summative assessment:
Three-hour examination in the Summer term following the course – testing learning outcomes 1-3
The unit is assessed via a three-hour examination in the Summer term. The exams contain a range of discursive questions aimed at testing students’ depth of knowledge of areas such as international financial architecture as well as numerical questions that evaluate students’ ability to derive the theoretical results they have seen. There will also be some questions involving calculation aimed at demonstrating that a student can apply some of the techniques encountered.
Formative assessment:
Solutions to problems set distributed throughout the term – learning outcomes 1-3.
Main text-book:
Required Articles (available via Blackboard):
Additional reading:
Bodie, Kane and Marcus, 2005, ‘Investments’, McGraw Hill International, 6th Edition.