Course description

International Finance

Introduction

The purpose of the course is to give an introduction to the management of finance for a firm operating internationally. The globalization and internationalization of financial and product markets expose all firms to new and different types of risk, as well as new instruments to deal with these risks. As a consequence of this, the firm's investment and financing decisions need to be modified. The objective of the course is therefore to study and understand how corporate financial management is affected by, and can take advantage of, international economic environments.

Course content

  1. Globalization and the firm
  2. Understanding exchange rates
  3. International financial markets
  4. Investing in financial assets internationally
  5. Measuring and managing a firm’s exposure to the exchange rate
  6. Direct foreign investment by MNCs
  7. Political risk when undertaking direct foreign investment
  8. Multinational capital budgeting
  9. Multinational cost of capital
  10. Taxation and the MNC

Learning outcome knowledge

After taking the course, the students shall be able to explain key concepts and give an account of the tools used in analyses of problems that arise in international finance (these tools include methods, techniques, models, theories, etc. applied in the subject area).

  • Examples of concepts that students shall be able to explain: exchange rates, parity conditions, equity and debt, international investment and diversification, currency risk, transaction, operating and translation exposure, political and country risk of FDI, Adjusted Present Value, International CAPM, Taxation and the MNC.
  • Examples from the toolbox: cash budget, investment budget, adjusted present value, exchange rate exposure, international capital asset pricing model.

 

Exam organisation

  • Written assignment: 10%
  • Written assignment: 10%
  • Written assignment: 10%
  • Written exam: 70%