FS6009 - International Finance (2017/18)
|Module specification||Module approved to run in 2017/18|
|Module title||International Finance|
|Module level||Honours (06)|
|Credit rating for module||30|
|School||Guildhall School of Business and Law|
|Total study hours||300|
|Running in 2017/18||
The module develops a critical understanding of the international financial environment, markets and institutions within which businesses operate to enable students to draw on such knowledge for decision making in global firms. It develops the conceptual understanding of financial management and approaches to decision making in a global context. Students will explore themes including international financial architecture, capital investment, currency markets and exchange rates, working capital management and risk management
The module aims to:
• develop a critical understanding of the international financial environment, markets and institutions within which businesses operate
• enable students analyse corporate decisions in global firms.
• equip students with a thorough understanding of the financial policies, instruments and strategies which may be devised to assist global firms to achieve their objectives.
• develop skills of research, data collection and transformation, analysis and written communication.
• develop reflection on learning and critical self-awareness.
The International monetary system. Exchange rate systems
The Foreign Exchange Market: Functions of the spot and forward markets. Currency futures and options. International parity relations. Exchange rate determination. Managing foreign exchange risk.
Currency, banking and financial crises – causes and consequences and their implications for global firms
International Capital Markets: Globalisation of financial markets. Trends, benefits and costs. International capital market integration. International asset pricing models.
Financing the global firm- sourcing equity and debt globally using capital markets, money markets and banks. The cost of capital for the global firm. Import and Export Finance
Multinational capital budgeting. Foreign Direct Investment and Political Risk; International Project Finance
Multinational working capital and cash management
Learning and teaching
A two-hour lecture is used to outline the key issues and models which students need to understand in order to able to evaluate and make decisions in international finance. The lectures are interactive and involve, among other things, students contributions, debate and undertaking short small-group exercises. The lectures are supported by guided reading and the seminar classes each week
The one hour seminars is used to give students the opportunity to take an active part in the learning process through the presentation of material in assigned readings and tutorial problems explored or solved prior to the class. Students are expected to spend at least 7 hours per week outside the lecture and seminar periods to read assigned material, collect data for analysis, solve problems and write essays or prepare essay plans to consolidate their understanding of the discipline. The classes involve discussions, practical exercises, quizzes, videos and presentations.
Student learning is supported by additional learning materials, web links and a discussion forum on the University’s virtual learning platform.
Students are required to reflect on their learning and the feedback that they obtain from the assessment process. The first assessment requires students to reflect on their learning in the first weeks of the module and in particular there experiences in the Activities Week in week 7.
On the successful completion of the module, students should be able to:
1. demonstrate a clear understanding of the historical and contemporary policy and institutional issues in the international financial system and their implications for the development of the international financial architecture;
2. understand and evaluate, causes of and the policy responses to, currency, banking and financial crises;
3. demonstrate a clear understanding of the theoretical, empirical and practical determinants of exchange rates and the functions of currency markets;
4. demonstrate understanding of the functioning of the major international capital and money markets as well as international banking and demonstrate how they may be used by firms to meet their funding, liquidity and risk management objectives;
5. evaluate all aspects of capital investment projects that global firms undertake.
6. collect information, develop models, interpret findings in the context of the theoretical literature and communicate an understanding of major conceptual and practical issues.
7. critically reflect on learning activities and develop critical self-awareness
The assessment strategy is designed to get students engaged with the module throughout the year. There will therefore be three assessments for the module.
The first assessment is a reflective essay that is submitted in week 8 with a weighting of 20%. The essay requires students to reflect on their learning and the experiences in the Activity Week. They are expected to review their own understanding of key concepts, models, theories and calculations and develop an action plan to develop their learning further. They will also consider how the module assists in the development of their career plans.
The second assessment which will be an essay or an empirical work submitted in week 21 with a weighting of 30%. This will focus on the application of knowledge and require students to write an essay or conduct an empirical study that requires collection of data from databases and other sources, the estimation of models and their interpretation in the light of the theoretical literature.
The final assessment will be a three-hour end of year examination in weeks 29 to 30 with a weighting of 50%. The examination will assess knowledge and understanding of the module content, written communication and numerical skills. The subject matter of the examination will include theories, models and applied calculations in international finance.
Eiteman D, A Stonehill and M Moffett (2010) Multinational Business Finance, Addison Wesley
Kim S H and Seung H Kim (2006) Global Corporate Finance, Blackwell Publishing
Levi M D, (2009) International Finance, Taylor and Francis Group
Shapiro, A. (2009) Multinational Financial Management, 9th Edition, John Wiley, Sons, Inc.
Copeland Laurence (2008) Exchange Rates and International Finance, Financial Times Press
Journal of Economic Perspectives
Journal of Economic Literature