2013/2014
KAN-AEF_AE55 International Finance
| English Title |
| International
Finance |
|
|
| Language |
English |
| Exam ECTS |
7.5 ECTS |
| Type |
Mandatory |
| Level |
Full Degree Master |
| Duration |
One Semester |
| Course period |
Autumn |
| Time Table |
Please see course schedule at e-Campus |
| Study board |
Study Board for MSc in Economics and Business
Administration
|
| Course
coordinator |
- Christian Wagner - Department of Finance
(FI)
|
| Main academic
disciplines |
- Finance
- Economics, macro economics and managerial
economics
|
|
Last updated on
02-07-2013
|
| Learning objectives |
The aim of this course is to provide
the student with a firm knowledge of the functioning of
international financial markets. The course focuses on the theory
and practice of managing various types of exposures to exchange
rate risk in international markets using modern exchange rate
instruments such as forwards, futures, swaps and options. The
course concludes with a discussion of optimal portfolios and
capital budgeting in an international context.
Upon completion of the course the student should be able to:
- Give an overview of the foreign exchange markets and the basic
theories of exchange rate determination.
- Explain and price the most important exchange rate products –
forwards, futures, swaps and options.
- Explain how to use exchange rate instruments for arbitrage,
hedging and speculation.
- Discuss the behaviour of exchange rates and the international
parity conditions.
- Discuss and characterize the risk-return characteristics of an
international portfolio.
- Identify and measure the effect of the exchange rates on the
value of the firm
- Identify and discuss the different kinds of exchange rate
exposures and how to hedge them.
- Discuss and characterize how investment in international
projects can impact the value of the firm.
|
| Examination |
|
International
Finance:
|
| 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 |
December/January and February |
| Aids allowed to bring to the exam |
Limited aids, see the list below and the exam
plan/guidelines for further information:
- 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
Allowed exam aids are language
dictionaries and Texas Instruments TI-30X IIS (solar), Texas
Instruments TI-30X IIB (battery), TI-30X IIS/IIB, TI-30XS MultiView
and TI-30XB MultiView).
|
|
| Course content and
structure |
|
This is a progressive course. It is suggested that students
concurrently enroll in both International Finance and Capital
Market Theory, as we will build on some of the concepts covered in
that course.
We begin with an overview of international finance and the basic
theories of exchange rate determination. The first part of the
course will focus on foreign exchange markets and the various
exchange rate products available for arbitrage, hedging and
speculation. We will study spot and forward exchange rates for
currency, then move on to currency futures, currency swaps and
currency options. Having described these cornerstones of the
foreign currency markets, attention is directed toward
understanding the determinants of foreign exchange rates, the
international parity conditions and techniques for exchange rate
forecasting. We then examine the issues a firm faces when measuring
and hedging exchange rate risk exposures in international markets.
In the final part of the course, we study the international capital
asset pricing model (ICAPM) in assessing the risk-return trade-offs
of a diversified international portfolio. We conclude by putting
all the pieces together and studying capital budgeting and
investment analysis in an international context.
|
| Teaching methods |
| Lectures with exercises |
| Expected literature |
|
Preliminary literature.
Piet Sercu (2009). International Finance. Princeton University
Press.
|
Last updated on
02-07-2013
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