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2020/2021  KAN-CCMVI2046U  Graduate International Finance

English Title
Graduate International Finance

Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration Summer
Start time of the course Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 80
Study board
Study Board for MSc 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, jmu.acc@cbs.dk
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 27/04/2021

Relevant links
Learning objectives
In the exam students must provide evidence that they
  • have internalized the theory on financial markets, investment appraisal, exchange rate risks, and financial hedging startegies
  • conduct a valuation of multinational investments under policy risk
  • understand the macro-economic fundamentals of exchange rates and conduct simple exchange rate forecasts
  • exhibit in depth knowledge of the hedging instruments in practice and theory
  • calculate complex combined hedging strategies in EXCEL
  • devise strategic exchange rate management strategies for companies suffering from long-term economic risk
Course prerequisites
Fundamentals of Finance, Fundamentals of Mathematics, Elementary Command of EXCEL
Examination
Graduate 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:

As a preliminary assignment students read chapter 1-3 from the textbook Bekaert & Hodrick (2017). The first session will include a quiz on the content of the preliminary assignment. 
 
This course covers advanced topics of international corporate finance and hedging. The course is designed to combine advanced financial theory, practical group case studies, and hedging calculations in EXCEL. 
 
The course initiates with two classes (1&2) on investment appraisal and capital budgeting. The next topic in class 3 is international capital markets and capital structure theories. Before class 4 covers the macro perspective of financial hedging discussion currency markets, exchange rate theories and forecasting. This includes an in class forecasting exercise EXCEL. In class 5, we transition to micro- or firm-level exchange rate management topics, starting with the different forms of exchange rate exposures. In class 7 students study the governance of risk management in companies before learning about the practice of and instruments used in financial hedging including forward rate agreements, futures and options. Hedging instruments are accompanied by EXCEL calculation exercises and a case study. In the final class 10 before the Q&A and exam preparation (class 11), we discuss strategic foreign exchange rate management.

 

Course structure:

Preliminary assignment: Reader Bekaert, G. & Hodrick, R. 2017. International financial management: Cambridge University Press. Chapters 1,2,3 
 
Class 1: Course Admin and Introduction to Investment Valuation (Quiz on Preliminary Reader) Class 2: International Capital Budgeting (Case AES) 
Class 3: International Capital Markets and Capital Structure Theories 
Class 4: International Currency Markets and Theories 
Class 5: Exchange Rate Theories and Forecasting (In class forecasting exercise) 
Class 6: Types of Exchange Rate Exposures 
 
Feedback activity: In-class quiz and discussion of answer, Mock exam 
 
Class 7: Corporate Governance and Risk Management (Case ARACRUZ) 
Class 8: Financial Hedging of Transaction Exposure II (Case AIFS) 
Class 9: Financial Hedging of Transaction Exposure III 
Class 10: Strategic Hedging of Economic Exposure  
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. Frequent group case studies provide feedback on their advancement.
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: 
Bekaert, G. & Hodrick, R. 2017. International financial management: Cambridge University Press. Chapters 1,2,3,6,7,8,9,10 
 
Mandatory Cases: 
Desai, M. A. 2006. Globalizing the Cost of Capital and Capital Budgeting at AES. 
Desai, M. A., Sjoman, A., & Dessain, V. 2005. Hedging Currency Risks at AIFS. 
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.

 

 

Additional relevant readings: 

Reference textbook: 
Bekaert, G. & Hodrick, R. 2017. International financial management: Cambridge University Press. Chapters 4,5,11,12,13,14,15,16,17,18,19,20,21

 
Last updated on 27/04/2021