International Financial Management

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Course Number: BUSADMIN 5650
Course Name: International Finance (Online)
Course Description:    Global financial markets emerged in the late 1980s and 1990s. This course explores these new markets with an emphasis on the basics and from the perspective of the financial manager. Four basic topics areas to be covered are foundations of international financial management, world financial markets and institutions, financial management of the multinational firm, and managing the foreign exchange exposure of the firm.
Prerequisites:    BUSADMIN 5620 or equivalent, or permission of the instructor
Level: Graduate
Credits: 3
Format: Online

Registration Instructions

NOTE: The information below is representative of the course and is subject to change.  The specific details of the course will be available in the Desire2Learn course instance for the course in which a student registers.

Additional Information

Learning Outcomes

Upon successful completion of this course, students will be able to:

  • Describe the key theories that justify international business.
  • Explain how international trade flows are influenced by economic factors and other factors.
  • Describe the background and corporate use of the international markets.
  • Explain how exchange rate movements are measured.
  • Describe how the currency future/option contracts are used to speculate or hedge based on the anticipated exchange rate movements.
  • Explain how government intervention in the foreign exchange market can affect economic condition.
  • Explain the concept of interest rate parity and how it prevents arbitrage opportunities.
  • Explain the purchasing power parity (PPP) theory and the International Fisher Effect (IFE) theory and its implications for exchange rate changes.
  • Explain how firms can benefit from forecasting exchange rates and the most common techniques used for forecasting.
  • Discuss the relevance of an MNC’s exposure to exchange rate risk.
  • Explain how to hedge long-term transaction exposure.
  • Compare various techniques used to hedge payables/receivables.

Unit Descriptions

Unit 1 provides an overview of the multinational corporation (MNC) and the environment in which it operates. After completing Unit 1 you should be able to:

  • Explain the goal of the MNC, along with the motives and risks of international business.
  • Describe the international flow of funds between countries.
  • Describe the international financial markets and how these markets facilitate ongoing operations.
  • Explain how exchange rates are determined.
  • Provide the background on the currency futures and option market.

Unit 2 focuses on critical relationship pertaining to exchange rates. After completing Unit 2 you should be able to:

  • Explain how government can influence exchange rate movements and how such movements can affect economic conditions.
  • Explain the relationships among foreign currencies.
  • Describe how the forward exchange rate is influenced by the differential between interest rates of any two countries.
  • Discuss prominent theories regarding the impact of inflation on exchange rates and the impact of interest rate movement on exchange rates.

Unit 3 explains the various functions involved in managing exposure to exchange rate risk. After completing Unit 3 you should be able to:

  • Describe various methods used to forecast exchange rates and explain how to assess forecasting performance.
  • Demonstrate how to measure exposure to exchange rate movements.
  • Explain how to hedge long-term transaction exposure.
  • Compare the techniques commonly used to hedge payables/receivables.

Grading Information

    1. 9 individual discussions @ 10 pts each                      90 pts
    2. 2 group discussions @ 20 pts each                           40 pts
    3. 11 quizzes @ 10 pts each                                        110 pts
    4. 2 team assignments @ 100 pts each                        200 pts
                  1. Lesson 4
                  2. Lesson 7
    5. 2 Peer evaluations @ 10 pts each                             20 pts
    6. 3 individual assignment @ 100 pts each                    300 pts
                  1. Lesson 2
                  2. Lesson 3
                  3. Lesson 6
    7. 1 individual graduate assignment                            50 pts

Total undergraduate                                              760 pts
Total graduate                                                      810 pts

 

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