Please note: Due to alternative arrangements for teaching and
assessment in place from 18 March 2020 to mitigate against the restrictions in
place due to COVID-19, information shown for 2019/20 may not always be accurate.
Please note: you are viewing unit and programme information
for a past academic year. Please see the current academic year for up to date information.
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 Accounting and Finance - Business School |
Faculty |
Faculty of Social Sciences and Law |
Description including Unit Aims
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 Information
10 Lectures
5 Classes
This pattern of teaching may be changed slightly to accommodate the Easter Vacation.
Assessment Information
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
- “Financial constraints and growth: Multinational and local firm responses to currency crises”. Review of Financial Studies, 2008.
- “Capital structure with risky foreign investment”. Journal of Financial Economics. 2008.
- "The limits of financial globalization," Journal of Applied Corporate Finance, 2007.
- “Should we fear derivatives?” Journal of Economic Perspectives, 2004.
- “Six ways companies mismanage risk”, Harvard Business Review, March 2009.
- “Emerging equity markets in a globalizing world" Working paper, 2014. Geert Bekaert and Campbell Harvey.
- “Beyond economics—Factoring politics into investment strategies”. Mc Kinsey Qurterly 2009