Course Syllabus
1. Course code: 2900401
2. Course credits: 3
3. Course title: Special Topics in Economics (Section 3)
International Financial Markets, Products and Pricing
4. Faculty: Economics
5. Semester: Second Semester
6. Year: 2012
7. Lecturer: Phornchanok Cumperayot Kouwenberg (Ph.D.)
Office Hours: Thursday 11.00 - 12.30, or by appointment
Office: 313/1
Contact address: Phornchanok.C@Chula.ac.th
8. Prerequisites: International Economics (2942307) or
Economics of Money and Financial Market (2944310)
9. Course status: Elective course
10. Programs: Bachelor of Economics Program
11. Degree: Bachelor of Economics (B.Econ)
12. Time: Monday, 13.00 – 16.00
Venue: Mahit Bld., 515
13. Course Description:
In this course, we mainly look at exchange rates, interest rates, and the derivatives
(contingent claims) based on these variables. It is unlike macroeconomic courses
that concern with the exchange rate or interest rate determination from optimal
monetary and fiscal policies.
Through the market approach, actions and expectations of market participants
play a crucial role in explaining the movements of asset prices. The prices of
assets, e.g., currencies, deposits and bonds (debt instruments), are driven by
demand and supply in the markets, such as FOREX markets, eurocurrency
markets and international bond markets.
A part of the course covers materials that are necessary to know for market
participants, from decentralized dealer networks to centralized policy authorities.
Another part touches issues that are interesting for academics, like economic
principles underlying the determination of asset prices and decision making of
economic agents. Applications of the knowledge on financial catastrophes and
risk management are also provided.
14. Course Outline:
14.1 Aim of the course:
To facilitate trade and investment on a global scale, seemingly distinct domestic
financial markets are parts of the integrated international financial markets. This
course is designed to provide students with a solid framework for exploring
financial markets in an international context.
The course is an introduction to relevant topics on international financial markets,
primarily for the BA students. Hopefully, the course will convey an intuitive
feeling for market dynamics for practitioners and establish background for further
studies, as we blend together economic theories and actual behaviours of the
international financial markets.
14.2 Course Contents:
We will spend time on three main international financial markets
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Foreign Exchange Markets
Eurocurrency Markets
International Bond Markets
In each of these markets, we try to answer the questions:
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What are these markets?
Why are they relevant?
o Who need these markets and for what?
How do the markets operate?
o Types of Exchange
o Market participants
o Trading activities
Which products are traded in the markets?
Hedging and risk management?
Implications for monetary and financial stability?
14.3 Teaching Methods:
Lecture (70%)
Presentation and discussion on assigned readings and cases (30%)
14.4 Learning Outcomes: Practical financial market skills
2
14.5 Media: PowerPoint presentation and Websites
14.6 Evaluation: Midterm examination: 30%
Final examination: 40%
Presentation and discussion: 30%
14.7 Course Schedule:
Table 1: Midterm
Date
Course Contents
International Financial Markets
29/10/12
 Broad view on the international financial markets
 Prices and Price creation in the financial markets
5/11/12
 Financial catastrophes
12/11/12
No Class
FOREX Markets
19/11/12
 Market structure, Characteristics, and Participants
 Terminology in FX markets
26/11/12
 Invited Speaker: What do FX dealers do?
3/12/12
 Trading activities
10/12/12
No Class
17/12/12
No Class
Midterm Exam
3
Table 2: Final
Date
31/12/12
Course Contents
No Class
FOREX Products
7/1/13
14/1/13
 Spot transaction
 Forward transaction
 FX swaps
No Class
21/1/13
 Currency swaps
 Currency futures
 Currency options
28/1/13
 Case studies
4/2/13
 Case studies
Offshore Financial Markets
11/2/13
 Eurocurrency and International bond markets
Sat. 16/2/13
(9-12)
 Invited Speaker: What do money market dealers do?
Sat. 16/2/13
(13-16)
 Invited Speaker: Debt markets and Instruments
18/2/13
 Interest rate determination and Derivatives
Final Exam
4
15. Readings: Below is a list of references (mainly books) used in this course. There
is no single recommended reading material for this course. A tip is to follow the
course handouts, to understand main concepts (from any books you feel
comfortable with) and to be able to practically apply the materials.
15.1 Compulsory Reading: Handouts
15.2 Optional Readings:
15.2.1 Cross, S.Y., 1998, All About the Foreign Exchange Market in the United States,
the Federal Reserve Bank of New York.
15.2.2 Grabbe, J., International Financial Markets.
15.2.3 Levi, M., International Finance: The Markets and Financial Management of
Multinational Business.
15.2.4 Levich, R., International Financial Markets: Prices and Policies.
15.2.5 Madura, J., Financial Institutions and Markets.
15.3 Other Sources: Websites
http://www.google.com
http://www.ssrn.com
http://www.imf.org/external
http://www.ecb.int/
http://www.investopedia.com
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