IB9Y4-15 International Financial Management
Introductory description
-To extend knowledge and understanding of the fundamental concepts of international finance, emphasizing the operation of the spot and forward foreign exchange markets.
-To provide first-hand experience with forex markets via empirical data and trading contest
-To develop critical reasoning skills in the context of international financial risk management.
Module aims
-Describe the structure and role of the foreign-exchange spot and forward markets
-Understand the theory behind exchange rate determination.
-Distinguish riskless arbitrage and risky speculation strategies
-Extend the standard capital asset pricing theory in an international context
-Implement international diversification strategies
-Critically assess financial decision-making within the context of international business, volatile exchange rates and global financial markets.
-To identify the different types of operating and financial risk to which companies with international operations are exposed.
-To examine strategies for mitigating the different types of risk e.g. exchange-rate risk, interest-rate risk, credit risk faced by companies with international operations.
-To consider financial instruments and devices e.g. currency swaps, eurobonds, cross-listings that enable companies with international operations to raise finance.
Outline syllabus
This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.
Introduction to FX market: exchange rates, spot and forward transactions, FX swaps
International parity conditions
Exchange Rates and Inflation
Balance of Payments
Exchange rate determination
Exchange rate forecasting
International capital markets I: Hedging vs. Speculation
International capital markets II: International investment and cross-listing
Learning outcomes
By the end of the module, students should be able to:
- Demonstrate comprehensive understanding of financial decision-making within the context of increasing globalisation of business, exchange-rate volatility and the internationalisation of financial markets.
- Appraise and assess international capital projects.
- Appraise and assess the different ways in which companies with international operations can raise additional finance.
- Critically assess the business and financial risks faced by companies with international operations.
Indicative reading list
Eun, C.S., B.G. Resnick, and T. Chuluun 2023. International Financial Management, 10th Global Edition, McGraw-Hill.
Bekaert, G. and R.J. Hodrick (BH, 2011). International Financial Management. Pearson Prentice Hall.
Evans, M. D.D. (2011). Exchange Rate Dynamics. Princeton University Press.
Sercu, P. (2009). International Finance: Theory into Practice. Princeton University Press.
Shapiro, A. C. (2009). Multinational Financial Management (9th edition), Wiley.
Lyons, R. K. (2001). The Microstructure Approach to Exchange Rates. MIT Press.
Research element
The course includes coverage of latest academic research.
Interdisciplinary
The course covers topics on the intersection of finance and economics and in that sense is interdisciplinary
International
The title of the course is international financial management – thus all content is international
Subject specific skills
Evaluate and propose appropriate strategies that enable companies with international operations to mitigate their business and financial risks.
Transferable skills
Communication skills
Study time
| Type | Required |
|---|---|
| Lectures | 9 sessions of 2 hours (12%) |
| Seminars | 8 sessions of 1 hour (5%) |
| Private study | 50 hours (33%) |
| Assessment | 74 hours (49%) |
| Total | 150 hours |
Private study description
Private study to include preparation for lectures and own reading
Costs
No further costs have been identified for this module.
You do not need to pass all assessment components to pass the module.
Assessment group D5
| Weighting | Study time | Eligible for self-certification | |
|---|---|---|---|
Assessment component |
|||
| Group Project | 20% | 15 hours | No |
Reassessment component |
|||
| 1000 words Individual Assignment | Yes (extension) | ||
|
Individual Assignment |
|||
Assessment component |
|||
| Written Examinations | 80% | 59 hours | No |
|
|||
Reassessment component is the same |
|||
Feedback on assessment
Feedback via My.WBS
Pre-requisites
Some prior knowledge of discounting is required
Courses
This module is Optional for:
- Year 1 of TIBS-N300 MSc in Finance
- Year 1 of TECA-L1P6 Postgraduate Taught Economics
- Year 1 of TECA-L1P7 Postgraduate Taught Economics and International Financial Economics
- Year 1 of TIBS-LN1J Postgraduate Taught Finance and Economics