International Finance

Master 2020/2021

Type: Elective course (Strategic Corporate Finance)

Area of studies: Finance and Credit

Delivered by: School of Finance

Where: Faculty of Economic Sciences

When: 1 year, 1, 2 module

Mode of studies: distance learning

Instructors: Madina Karamysheva, Dmitry Poduhovich

Master’s programme: Strategic Corporate Finance

Language: English

ECTS credits: 5

Contact hours: 40

Full Syllabus Ask Question

Abstract

Integration and globalization of the modern world require a deep understanding of international finance. This course focuses on the explanation of up-to-date theories of international finance and its practical, real-world applications. Effective corporate decision making requires a deep understanding of the global financial markets; in particular, this course will cover foreign exchange markets and world capital markets. Moreover, hedging strategies and risk management are necessary for effective financial management. Ссылка на онлайн-программу: https://www.mruniversity.com/courses/international-finance

Learning Objectives

To build a theoretical framework of international finance questions
To develop a practical guide for solving international finance problems
To demonstrate the controversial issues of international finance through discussions and papers

Expected Learning Outcomes

To know the theoretical framework of international finance issues
To be able to approach and solve real-world international finance problems
To be able to understand controversial issues of international finance

Course Contents

Multinational Financial Management and Globalized World
(growth of international trade; globalization of financial markets; goal and organizational structure of the MNC; important international players; globalization and MNC: benefactor or menace?)
International Financial Markets
i. Balance of Payments (Concepts and terminology; surpluses and deficits in the BOP Accounts; dynamics of the BOP) ii. Foreign Exchange Market (Market players; Organization of FOREX market; Spot rates, Forward rates; Interest rate parity, PPP and real exchange rates; Foreign exchange intervention, exchange rate systems)
International Capital Markets
i. International debt financing (Global sources of funds, characteristics of debt instruments, world's bond market, international bank loans, cost of debt) ii. International equity financing (International stock markets, cross-listing, and depositary receipts, strategic alliances) iii. The international capital market equilibrium (Risk and return of international investments, international diversification, optimal portfolio allocation, international CAPM, integrated versus segmented markets)
Multinational Capital Structure and Capital Budgeting
(NPV, financial side effects, real options, parent versus subsidiary cash flows)
Risk Management and Hedging
i. Forecasting exchange rates (Parity conditions and exchange rate forecasts, common forecasting techniques, fundamental forecasting, technical analysis, evaluating forecasts), Measuring and managing real exchange risk ii. Foreign currency futures and options, foreign currency swaps iii. Forward markets and transaction exchange risk (hedging transaction exposure, forward foreign exchange market) iv. Managing economic and translation exposure (assessing economic exposure and restructuring to reduce economic exposure; hedging with forward contracts) v. Country risk analysis (country and political risk analysis, measuring country risk, assessment of political risk in financial decisions) vi. Risk Management and the Foreign Currency Hedging Decision (arguments against and for hedging, hedging in real world, hedging trends) vii. Financing International Trade (fundamental problem with international trade, documents, methods of payments, financing exports, countertrade)
Systemic Risk
Systemic Risk
International Finance
International Finance

Assessment Elements

Assignment 1
Group Project/Presentations
Term paper and defense of your project
Assignment 2
Assignment 3
Inclass quizzes
Inclass participation

Interim Assessment

Interim assessment (2 module)
0.3 * Term paper and defense of your project + 0.15 * Assignment 1 + 0.15 * Assignment 2 + 0.15 * Assignment 3 + 0.15 * Group Project/Presentations + 0.05 * Inclass participation + 0.05 * Inclass quizzes

Bibliography

Recommended Core Bibliography

Baker, H. K., & Riddick, L. A. (2013). International Finance : A Survey. Oxford: Oxford University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=2096885
Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2017). International Finance: Theory and Policy, Global Edition (Vol. Eleventh edition). Boston: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1649947
Terra, C. (2015). Principles of International Finance and Open Economy Macroeconomics : Theories, Applications, and Policies. London: Academic Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1003163

Recommended Additional Bibliography

Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2015). International Finance: Theory and Policy, Global Edition (Vol. Tenth edition, Global edition). Harlow, Essex: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1419051
Terra, C. (2015). Principles of International Finance and Open Economy Macroeconomics. Elsevier. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.eee.monogr.9780128022979

Course Syllabus