Course title: International Finance
Code:
Credit: 3
Teaching Hours: 3 hrs/w X 16weeks

Overview

This paper provides an understanding of the theory, institutions and environment of international finance, investment and management. Students will gain an insight into how exchange rates and their movements affect business organizations and can be managed. The role of conventional financial theory in an international environment will also be considered.

Aims and Objectives
On successful completion of this paper students should be able to:

 Demonstrate an understanding of exchange rate market details, products, systems, forecasts and arbitrage processes.
 Demonstrate an understanding of the management of foreign exchange exposure, international financing, and international investment activities of a multinational firm.
 Demonstrate an understanding of core corporate finance concepts, theories and techniques as they relate to a multinational company.
 Synthesise and apply corporate finance concepts, theories and techniques into new situations.

Syllabus and Schedule of Lectures
Introduction, Orientation
What’s special about International Finance?
Evolution of International Monetary system
FX quotations
Spot v.s Forward markets
Triangle Arbitrages
-Factors affect Exchange Rates
Interest Rate Parity & arbitrage
Fisher effect, International Fisher Effect
Purchase Power parity
Balance of Payments
Futures v.s. Forward contracts
Market-to-the market process
Options basics
Options applications
FX exposures
Hedging for transaction exposure 1
Hedging for transaction exposure 2
Economic exposure measurement
Hedging Economic exposure
International Banking,
International Equity Markets
International Bond Market
Interest Rate Swap
currency Swaps
International Portfolio mgnt (brief)

Textbook
Eun, C.S.,Resnick,B.G., International Financial Management. Fifth Edition, McGraw-Hill, 2009.

Assessments
Assessment Weight
Mid – Term Test 25%
Group Assignment (Case Study)
with Oral Presentation 25%
Final Examination 50%