Course Description:
BUSADMIN 5650 International Financial Management
| Course Number: | BUSADMIN 5650 |
| Course Name: | International Financial Management |
| 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 |
| Semesters Offered: |
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| Registration Instructions |
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.
Number of Exams
There are 10 quizzes for this course.
Number of Assignments
There are 8 individual discussions for this course.
Number of Projects
There are 6 team case projects, 2 group discussions, and a peer evaluation for this course.
Grading Information
- 9 individual discussions @ 10 pts each 90 pts
- 2 group discussions @ 20 pts each 40 pts
- 11 quizzes @ 10 pts each 110 pts
- 2 team assignments @ 100 pts each 200 pts
- Lesson 4
- Lesson 7
- 2 Peer evaluations @ 10 pts each 20 pts
- 3 individual assignment @ 100 pts each 300 pts
- Lesson 2
- Lesson 3
- Lesson 6
- 1 individual graduate assignment 50 pts
Total undergraduate 760 pts
Total graduate 810 pts