• 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 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 

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.

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