Financial Strategy in a Global Economy
The overall goal of the course it to provide the participants with a sound understanding of financial decision-making in the multinational firm. However, whilst the course is presented from a managerial perspective and thus applied in nature, decision-making is approached using firmly established theories in economics and finance.
- Introduction: Globalization and the Multinational Firm
- The International Monetary System: Balance of payments and supply and demand in the FX-market, FX-rate regimes
- Foreign Exchange Market: Market participants, contracts traded, FX-rate quotation, interbank market, market microstructure
- Parity Relationships: covered and uncovered interest parity, purchasing power parity, international Fisher effect
- Forecasting Exchange Rates: forecasting FX-rate level and variance, forecast performance measures, forecasts based on economic models and technical analysis, carry trades
- Currency Futures and Options: pricing and hedging
- Transaction (contractual) Exposure: financial hedging, special hedging problems, alternative hedging approaches
- Operating Exposure: measuring this exposure, financial and operational hedging
- Foreign Direct Investment, Political and Country Risks: determinants of country risk, measurement, and consequences for capital budgeting
- Domestic and International Capital Structure and the Cost of Capital
- Domestic and International Capital Budgeting
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