• Understand how financial markets work and can be used for risk management
• Identify and evaluate different types of risk in international business
• Devise financial strategies to manage or hedge risks international business
• Understand how exchange rates affect companies on different level
• Be able to implement and analyze risk management processes
• Be able to deal with managerial elements in corporate hedging (exchange rate forecasting, strategic management of different exposures, measurement of foreign exchange exposure, hedging ratio, hedging tenor etc.)
• Be able to read and understand scientific and practical state-of-the-art papers on corporate hedging

The course is an advanced graduate course in International Financial Management with a distinctive focus on managerial corporate risk management. The course is unique in that:

• it covers both operational implementation of hedging instruments and managerial issues in corporate hedging that typically are not included in standard courses.
• students read, present and interactively discuss hand-picked state-of the art journal articles with highly practical implications.

In the first class, students are assigned one of 10 journal articles broadly related to five practical topics in FX Management (i.e. exchange rate forecasting, measuring exchange risks etc.) For the Mid-term Assignment (in class 6), they prepare a discussion paper on the article.

The first part of the course (classes 1-6) is lecture based and will bring students to an advanced international financial management level by the Mid-Term Assignment.

Topics include financial markets functioning and organization (Chapters 1-3), exchange rate behavior (Chapters 4), knowledge of hedging instruments, the hedging process (net exposure assessment, forecasting and implementation of hedging strategy)(Chapter 5), and foreign exchange risk theory (accounting exposure, transaction exposure and economic exposure)(Chapters 9-12).

The second part of the course (classes 7-11) is interactive and problem-focused. Students work in groups on the journal article and present them in class. Articles are discussed interactively and managerial implications are derived and summarized. The Comprehensive Review (class 11) will cover both contents from the lecture part and the interactive sessions.

Preliminary assignment:

For the Preliminary Assignment in Class 1 students are required to complete three online courses 

-> Introduction to FX
-> Introduction to Futures 
-> Introduction to Options
https://institute.cmegroup.com/learn/course-catalog 

by the Chicago Mercantile Exchange (CME) and read a textbook chapter from Hull (2012). These materials will form the basis of a 30 minute in class, pen and paper exercise.

Class 1: Preliminary assignment and introduction into markets
Class 2: Types of risk and hedging instruments
Class 3: Exchange rate exposures 
Class 4: Organization of risk management
Class 5: Hedging Instruments
Class 6: Hedging Instruments II

Feedback activity: Students complete an online exam at home covering the content of the first 6 classes. The answers are discussed in the following class in detail to provide feedback.

Class 7: Feedback discussion and risk management topics in resarch and practice I
Class 8: Risk management topics in resarch and practice II
Class 9: Risk management topics in resarch and practice III
Class 10: Risk management topics in resarch and practice IV
Class 11: Comprehensive review of class

Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings or video clips to be read or viewed before the start of classes with a related task scheduled for class 1 in order to 'jump-start' the learning process.

Course timetable is available on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams.

We reserve the right to cancel the course if we do not get enough applications. This will be communicated on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams end February 2018 at the latest.

Mandatory readings:

John C, Hull (2012). Options, futures, & other derivatives. 8th Edition. Prentice Hall; Upper Saddle River, NJ [u.a.]. Chapter 1 p. 1-21 (20 pages) Chapter will be uploaded to LEARN.

Jeff Madura & Roland Fox (2011). International financial management. [European ed.], 2nd Edition, South-Western Cengage Learning; Andover [u.a.]. (Chapters 1-12) Students can acquire the relevant chapters or the full book on Cenage Brain. http:/​/​www.cengagebrain.co.uk/​shop/​isbn/​9781844803606 
More recent editions of the textbook are available and can be used.

Additional relevant readings:

The second part of the course covers practical problems in risk management based on state-of the art research papers. Readings are assigned to students in groups and can be subject to change.

Aabo, T. 2015. Corporate Hedging of Price Risks: Minimizing Variance or Eliminating Lower-Tail. Copies of the article will be made available to students.
Outcomes? Journal of Applied Corporate Finance, 27(1): 57-62.

Amberg, N. & Friberg, R. 2016. Three Approaches to Risk Management—and How and Why Swedish Companies Use Them. Journal of Applied Corporate Finance, 28(1): 86-94.

Anshuman, V. R., Martin, J., & Titman, S. 2011. Accounting for sovereign risk when investing in
emerging markets. Journal of Applied Corporate Finance, 23(2): 41-49.

Bock, J. M. 2013. Evidence from German Companies of Effects of Corporate Risk Management on Capital Structure Decisions. Journal of Applied Corporate Finance, 25(4): 97-103.

Bofinger & R. Schmidt (2003). On the reliability of professional exchange rate forecasts an empirical analysis for the €/US-$ rate. In: Financial Markets and Portfolio Management, 17 (4): p. 437-449. (12 pages).

Brown, G. W. 2001. Managing foreign exchange risk with derivatives. Journal of Financial
Economics, 60(2): 401-48.

Carter, D. A., Rogers, D. A., & Simkins, B. J. 2006. Hedging and Value in the U.S. Airline Industry.
Journal of Applied Corporate Finance, 18(4): 21-33.

Culp, et al. (1998). VALUE AT RISK: USES AND ABUSES. In: Journal of Applied Corporate Finance, 10
(4): 26-38.

Hoyt, R. E. & Liebenberg, A. P. 2015. Evidence of the Value of Enterprise Risk Management. Journal
of Applied Corporate Finance, 27(1): 41-47.

Esty, B. C. 1999. Petrozuata: a case study of effective use of project finance. Journal of Applied
Corporate Finance, 12(3): 26-42.

Naylor, M. J., Chen, J., & Boardman, J. 2015. Real Options in Foreign Investment: A South
American Case Study. Journal of Applied Corporate Finance, 27(1): 110-20.

Pritamani, M., Shome, D., & Singal, V. 2005. Exchange Rate Exposure of Exporting and Importing Firms. Journal of Applied Corporate Finance, 17(3): 87-94. 

Tuckman, B. 2016. Derivatives: Understanding Their Usefulness and Their Role in the Financial Crisis. Journal of Applied Corporate Finance, 28(1): 62-71. 

Zeidan, R. & Rodrigues, B. 2012. The failure of risk management for nonfinancial companies in the
context of the financial crisis: lessons from Aracruz Celulose and hedging with derivatives. Applied
Financial Economics, 23(3): 241-50.

Zeidan, R. & Müllner, J. 2015. Firm, market and top management antecedents of speculation:
Lessons for corporate governance. Journal of Multinational Financial Management.