Excerpt from course description

Multinational Financial Management


The objective of this course is to provide students with an overall understanding of how firms should manage the global financial issues in a dynamic world. It explains why fundamental theories in international economics can be translated into the competitive edges for multinational firms in both the product market and the financial market, and thereby affect their global investment, financing and risk management decisions.

The course has a strong China background. It focuses on the RMB exchange rate reform and how multinational firms (both foreign-invested firms in China and Chinese overseas investments) should incorporate RMB foreign exchange risk management in investment decisions (which market to entry) and financing decisions (which market to borrow).  Although students are required to have fundamental knowledge in Macroeconomics (GDP and inflation), Microeconomics (Opportunity cost, market competition) and Corporate Finance (NPV, discount rate, cost of capital, etc.), they are encouraged to present their analytical skills rather than quantitative calculations.

Course content

Day 1. Lecture

  • What is Special in Multinational Financial Management
  • International Monetary System and the “Impossible Trinity”
  • Chinese Yuan Exchange Rate Regime in the “Impossible Trinity”
  • Purchasing Power Parity and Interest Rate Parity
  • Foreign Exchange Markets and Quotes

    Day 2: Lecture and Classroom Case Discussion

  • Classroom Discussion of Case 1
  • RMB Offshore Markets and RMB Internationalization
  • Definition and Categories of Foreign Exchange Exposure
  • Measuring and Managing Transaction Exposure
  • Measuring Economic Exposure

    Day 3: Lecture and Classroom Case Discussion

  • Classroom Discussion of Case 2
  • Overview of Global Financing: Bond and Equity Markets
  • Techniques: Interest Rate swaps and Currency Swaps
  • Overseas Listing of Chinese Firms:  VIE Structure and the Delisting Wave
  • FDI, Modes of Entry and the Chinses Characteristics
  • Mentoring Group Presentations

    Day 4. Lecture and Group Presentations

  • Multinational Capital Budgeting
  • Business Ethnics for MNCs: Transfer Pricing and Tax Inversion
  • Student Group Presentations


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