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2020/2021  BA-BHAAI1067U  Undergraduate International Finance

English Title
Undergraduate International Finance

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration Summer
Start time of the course Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 120
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Sven Bislev - Department of Management, Society and Communication (MSC)
For academic questions related to the course, please contact instructor Jakob Müllner, Associate Professor, WU-Vienna, jakob.muellner@wu.ac.at
Other academic questions: contact Sven Bislev at sb.msc@cbs.dk
Main academic disciplines
  • Finance
  • Globalisation and international business
Teaching methods
  • Online teaching
Last updated on 21/01/2021

Relevant links

Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors:
In the exam students must provide evidence that they
  • have internalized the theory on financial markets, political risk, firm valuation, capital budgeting, exchange rate risks, hedging and strategic management
  • be able to apply these theoretical basics to concrete numerical calculations in valuation, capital budgeting and hedging
  • be able to articulate the strengths and weaknesses of different approaches to valuation, capital budgeting, hedging and strategic management
  • be familiar with financial, strategic and contractual hedging instruments in theory and practice and their differences
Course prerequisites
Elementary knowledge of Finance, Math and EXCEL
Examination
Undergraduate International Finance:
Exam ECTS 7.5
Examination form Home assignment - written product
Individual or group exam Individual exam
Size of written product Please see text below
4 hour home assignment. No requirement for maximum number of pages.
Assignment type Written assignment
Duration Written product to be submitted on specified date and time.
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Summer, Ordinary exam: 4-hour home assignment in the period of 26–30 July 2021
Retake exam: 4-hour home assignment in the period of 20 – 24 September 2021
3rd attempt (2nd retake) exam: 72-hour home assignment – 22 – 25 November 2021 – for all ISUP courses
simultaneously

Exam schedules available on https:/​/​www.cbs.dk/​uddannelse/​international-summer-university-programme-isup/​courses-and-exams
Make-up exam/re-exam
Same examination form as the ordinary exam
Retake exam: 4-hour home assignment, new exam question
Exam form for 3rd attempt (2nd retake): 72-hour home assignment, max. 10 pages.
Course content, structure and pedagogical approach

Course content:

For the preliminary assignment students read Chapters 1- 4 from Desai (2017) "The wisdom of finance". To get acquainted with the basic principles of Finance from an everyday perspective. Students should take notes of the core finance concepts discussed and explain them in simple language. 
 
The course builds on this popular understanding and adds the academic context. It first introduces students to the discipline of International Corporate Finance, discussing the the challenges and opportunities firms face in international financial markets. The course investigates how firms can evaluate and manage exposure to different forms of risk resulting from international operations (e.g. political risk, foreign exchange risk).  
 
In the second part, the course focuses in more detail on the role of exchange rate risks and corporate hedging strategies. Students study the theory and practice of financial hedging using different learning mediums (e.g. textbooks, EXCEL calculations). Taken together, the course is designed to introduce the most important functions of the CFO in an international context.

 

Course structure:

Preliminary assignment: Reader Desai (2017) Chapters 1-4 (see instructions above) 
 
Class 1: Course Admin and Introduction to International Financial Markets (Quiz on Preliminary Reader) 
Class 2: Elementary Tools and Indicators in Finance 
Class 3: Investment Valuation 
Class 4: International Currency Markets and Quotations 
Class 5: Types of Exchange Rate Exposures 
Class 6: Organizing Financial Hedging (Case study ARACRUZ) 
 
Feedback activity: In-class quiz and discussion of answer, Mock exam 
 
Class 7: Financial Hedging of Transaction Exposure I 
Class 8: Financial Hedging of Transaction Exposure II 
Class 9: Strategic Hedging of Economic Exposure I 
Class 10: Strategic Hedging of Economic Exposure II (Case study Volkswagen) 
Class 11: Exam Preparation and Q&A 

Description of the teaching methods
This year all courses are taught digitally over the Internet. Instructors will apply direct/live teaching through a link (like Skype, Team, Zoom). In some courses, pre-recorded material will also be used.
Feedback during the teaching period
Students will have the chance to see their progress in a mock-exam. A Q&A session will help clarify remaining questions on the first half of the course.
Student workload
Preliminary assignment 20 hours
Classroom attendance 33 hours
Preparation 126 hours
Feedback activity 7 hours
Examination 20 hours
Further Information

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 in March 2021.

 

Expected literature

Mandatory readings:

Preliminary reader: Desai, M. 2017. The wisdom of finance: Discovering humanity in the world of risk and return: Houghton Mifflin Harcourt. Chapters 1- 4 
 
Mandatory teaching cases:  
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. 
Srinivasulu, S. L. 1981. Strategic Response to Foreign Exchange Risks. Columbia Journal of World Business, 16(1): 13. 
 
Mandatory course script on hedging will be provided by instructor. 

 

Additional relevant readings:

Reference textbook chapters (non mandatory) 
 
Bekaert, G. & Hodrick, R. 2017. International financial management: Cambridge University Press. Chapters 1,2,3,15,17

Last updated on 21/01/2021