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2013/2014  BA-HA_HU7F  Global Finance and World Markets

English Title
Global Finance and World Markets

Course information
Language English
Exam ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration Summer
Course period Please check www.cbs.dk/summer for the course schedule.
Time Table Please see course schedule at e-Campus
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Course instructor - Joseph French, University of Northern Colorado
    Patricia Plackett - Department of Operations Management (OM)
Main academic disciplines
  • Finance
  • Financial and management accounting
  • Economics, macro economics and managerial economics
Last updated on 22-07-2013
Learning objectives
After completing this course, you should be able to perform the following tasks:
  • Understand how international capital markets work
  • Explain the differences between foreign exchange spot and forward markets
  • Explain the concepts of international parity relations, such as interest rate parity, purchasing power parity, and the international fisher equation
  • Employ models to forecast foreign exchange rates
  • Understand exchange rate exposure for a multinational corporation
  • Use currency derivatives to hedge currency risk
  • Understand the key causes of currency crises
  • Make international investment and capital budgeting decisions
Course prerequisites
Students must have completed and received passing grades in undergraduate economics and finance before enrolling in this course.
Prerequisites for registering for the exam
Compulsory assignments (assessed approved/not approved)
Mandatory Mid-term Assignment: An applied group assignment on forecasting will be required at the beginning of class session 6. Students are required to submit the assignment to the instructor and to present their findings to the class in a 5-10 minute presentation. The instructor will provide verbal and written feedback.
Examination
4 hour written exam:
Examination form Written sit-in exam
Individual or group exam Individual
Assignment type Written assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Summer Term
Aids allowed to bring to the exam Limited aids, see the list below and the exam plan/guidelines for further information:
  • Additional allowed aids
  • Allowed calculators
  • Allowed dictionaries
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Description of the exam procedure
Dictionaries, calculators of any kind (without internet acces and not in mobile phones) and one A4 page of notes are allowed.
Course content and structure
The global financial landscape is evolving rapidly. It is the goal of this course to provide students with the requisite knowledge to understand the dynamic world of global finance. In particular, this course will focus on foreign exchange markets, forecasting exchange rate, currency risk hedging techniques, and currency derivative instruments. In addition, macroeconomic policies, international portfolio management, and investment practices of multinational firms will be reviewed to familiarize students with the types of practical issues in the international finance field.
 
Tentative Course Schedule:The following is a provisional schedule of topics, readings, assignments, due dates and examination dates. Adjustments to the schedule may be necessary as the course proceeds. Note that although the schedule is organized by week, there will be two class sessions per week over the first five weeks and one class session in the sixth week resulting in a total of 11 class meetings.
SessionTopic(s)Chapter
1
  1. Overview
  2. Global Financial Markets
1, 3, and lecture notes
2
  1. Balance of Payments
  2. International Flow of Funds
2 and lecture notes
3
  1. Exchange Rate Determination
  2. Government Intervention
4, 6, and lecture notes
4
  1. Arbitrage in International Financial Markets
  2. PPP + IFE
7 and 8
5
  1. Exchange Rate Forecasting
9 and lecture notes
6
  1. Midterm Assignment Due
  2. Foreign Exchange Derivatives
5 and lecture notes
7
  1. Measuring and Managing Exchange Rate Exposure
10 and 11
8
  1. Economic Exposure
12 and lecture notes
9
  1. International Capital Budgeting
14 and lecture notes
10
  1. Currency Crises
lecture notes
11
  1. Special topics, Catch-Up, and Comprehensive Review
lecture notes

The course's development of personal competences:
 
The ability to do mathematical computations
The ability to speak comfortably in front of a large group of other students
The ability to use appropriate technology
The ability to work and collaborate with other students
The ability to write effectively
The ability to listen effectively
Teaching methods
The primary teaching methods include: lectures, case analysis, and small group projects.

Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings to be read before the start of classes with a related task or tasks in the first two classes in order to 'jump-start' the learning process.
Watch part III of the following video:
1. Commanding Heights: The Battle for the Global Economy http:/​/​topdocumentaryfilms.com/​commanding-heights-battle-world-economy/​
2. After watching the above video, write a short essay (650-750 words; 2-3 pages) that provides your thoughts on the video above. Prepare your essay in MS Word with 1-inch margins on all sides, double-spaced and 12 pt. Times New Roman font. The assignment is due at the beginning of the first class.
Expected literature
  1. Madura, Jeff. (2011), International Financial Management, 11th Edition, Cengage Learning.
  2. Lecture notes: provided by instructor
Last updated on 22-07-2013