INTERNATIONAL FINANCE
Course code
FIN110
Course title
International Finance
Type of course
Main
Study level
1st
Department
Bachelor studies
Year of study
3rd
Semester
Autumn
ECTS credits
6 credits: 36 hours of lectures, 12 hours of seminars,
48 hours of individual work, 2 hours of consultations
Coordinating lecturers
Dr. Francois Rey
Invited lecturers
Study form
Course prerequisites
Language of instruction
Full-time
Introduction to Finance, Basic Economics and Statistics,
Basic macroeconomics
English
Annotation
This course addresses two main tenets: fundamentals of international finance and managerial perspective focusing on
the financial characteristics and environment of the multinational corporation. Theories of exchange rate determination
and international capital mobility will be emphasized. Special attention is focused on how international risk factors and
foreign securities markets affect financial decisions. International financial instruments and hedging techniques will also
be discussed.
Aim of the course
The International Finance course aims to provide a foundation for students' encounter with the subject of international
finance. As multinational corporations (MNCs) continue to expand their operations globally they must not only be
properly managed to apply their comparative advantages in foreign countries, but must also manage their exposure to
many forms and sources of risk. Those MNCs that are most capable of responding to changes in the international
financial environment will be rewarded. The same can be said for today's students who become the MNC managers of
the future. International Finance combines a strong foundation in international finance theory with current, practical
applications. It provides thorough, up-to-date treatment of cutting-edge international finance issues along with traditional
treatment of international financial management. Real-world applications will be discussed
Subject learning outcomes (SLO)
SLO1. Understand the fundamental
concepts of international finance
SLO2. Understand the unique aspects of the
multination corporation and its financial
management in the international context
SLO3. Understand the main theories of
exchange rate determination and apply them
to forecasting
SLO4. Analyse and evaluate financial and
other additional risks confronting the
multinational corporation
SLO5. Make and evaluate decisions attendant
to the financial management of the
multinational corporation
Study methods
Lectures, seminars, self-study
Assessment methods
Midterm test, final exam
Lectures, seminars, self-study
Midterm test, final exam
Lectures, seminars, self-study
Midterm test, final exam
Lectures, seminars, self-study
Midterm test, final exam
Lectures, seminars, self-study
Midterm test, final exam
1
Learning methods
The course is taught in English and is structured as a combination of lectures, in-class activities, and case studies. It
requires a substantial amount of preparation by the students and active involvement during class.
Quality issues
The lecturer assures a variety of teaching and testing methods. The feedback from students is always highly valued and
appreciated.
Cheating issues
The teaching and testing methods are chosen taking into account the purpose of minimization of cheating opportunities.
The ISM regulations on academic ethics are fully applied in the course.
The reading below is from Eun and Resnic.
Topics:
TOPIC
1
2
INTRODUCTION

The various kinds of risk in international finance

Globalization and the multinational Firm

International monetary system
FOREIGN EXCHANGE MARKETS

Balance of payments

Structure of the FOREX market

The spot market
3
FOREIGN EXCHANGE MARKETS (cont.)

The forward market
4
DERIVATIVES ON FOREIGN MARKETS

Futures
IN-CLASS HOURS
Lectures
Seminars
READINGS
(Chapter No.)
2
Suggested:
Textbook Ch. 1-2
2
Additional: TBD
2
2
Suggested:
Textbook Ch.
Additional: TBD
2
2
2
Suggested:
Textbook Ch.
2
Additional: TBD
Suggested:
Textbook Ch.
Additional: TBD
Midterm
5
DERIVATIVES ON FOREIGN MARKETS

Options
6
DERIVATIVES ON FOREIGN MARKETS

Swaps
7
INTERNATIONAL CAPITAL MARKETS

International banking and money market

International bond market

International equity market
2
2
2
4
2
Suggested:
Textbook Ch.
2
Additional: TBD
Suggested:
Textbook Ch.
2
Additional: TBD
Suggested:
Textbook Ch.
Additional: TBD
8
REQUIRED READINGS

International Monetary System

Balance of Payment
2
9
PART IV: FINANCIAL ANALYS OF THE MULTINATIONAL FIRM

Statements, ratios, margins

Considerations on Initial Public Offerings
2
2
Required:
Textbook Ch. 2, 3
2
Additional: TBD
Suggested:
Textbook Ch.
Additional: TBD
Total:
24
24
This course outline is intended to give you an idea of the sequence of topics; however, it is subject to change at
the discretion of the instructor. Some of the topics will be covered in greater detail than others and some of the
material presented in class is not in the text. You must attend class to obtain the reading and problem
assignments.
2
Individual work and assessment:
TYPE
Midterm test
Final Exam
Class participation
Group presentation
Total:
1.
2.
3.
4.
TOTAL HOURS
EVALUATION, %
30
40
10
20
114
30
40
10
20
100
Midterm test
It will be held after the first half of the course, during the lecture period. It counts towards 30% of the
final grade. The midterm test will be based on materials covered in the first 5 lectures. Calculators may
be used, provided they cannot store text or formulas.
Final exam
The exam counts towards 40% of the final grade. It is a closed-book test, which includes multiple
choice questions, short essays and problems. It tests conceptual, analytical, and numerical skills. The
exam will be based on the topics covered during the whole course. Calculators may be used, provided
they cannot store text or formulas.
Group presentation
Students will be asked to work in small groups to prepare a powerpoint-type presentation to the class
on a topic previously agreed with the professor. Suggested topics will include the presentation of the
international activities of some major multinational companies, in-depth research work on major
financial institutions (such as IMF) or major current financial news related to the area of international
finance (such as the current sovereign debt crisis within the EU)..
Class Participation
Positive contributions to class are encouraged and rewarded with 10% of the final grade.
Retake-exam
In case of a negative final grade, students are allowed a re-sit exam. It will cover all course material.
The weight of a re-sit is 70%.
Main readings:
1.
Eun C. S., B. G. Resnick, International Financial Management 2012
Additional readings:
1.
Madura, Jeff. International Financial Management (10th ed.) Thomson South-Western
The role of the subject in achieving the goals of International Business & Communication study
programme
Special skills
EKO. To describe the main economic theories and theoretical models, to adapt them to the theoretical and
practical issues (for example, demand and supply elasticity theory, economic cycles, classical economic
theory, Keynesianism, monetarism, rational expectations theory, cost-benefit analysis);
EKO. To describe and to analyze economic, legal, political and social environment of companies and other
organizations; to identify and to evaluate internal and external changes and to make necessary decisions to
keep the firm’s or organization’s economic and financial stability;
EKO. To forecast the influence of economic and financial decisions not only in a financial context, but also
in the wider context of business or organization management, to estimate the effect of economic and
financial decisions on the processes of a company or an organization, the motivation of company’s human
resources, product and service quality, customer satisfaction, brand strength, corporate social
responsibility;
TVK. To describe and to be able to analyze the policy and strategy of international business, the global
economy, global business trends, international law, international finance, international communication;
SLO1, SLO2
SLO2, SLO4,
SLO5
SLO3, SLO4,
SLO5
TVK. To explain the impact of culture on international business;
TVK . To describe and to analyze the risks and benefits of international business;
SLO1, SLO2
SLO4, SLO5
TVK. To prepare, to analyze and to evaluate the information of international business relationships and
global business, to evaluate the vitality of new and existing companies in the global context;
3
TVK. To be able to adapt communication of various types to the international markets, to analyze and to
evaluate the effectiveness of international business communication, to choose and to implement
international marketing communication programme, based on the barriers of international business
communication;
TVK. To name the main principles of international business law, to analyze simple cases of international
business law
TVK. To name the main principles of strategic planning and management, to be able to analyze in practice
strategic alternatives based on the international company’s or organization’s competitive environment and
its resources, to create an outline of a strategic plan and to foresee tactical actions to implement the
strategy.
General skills
B1. To apply modern information technologies in the data gathering, analysis and communication;
B2. To apply a systematic, critical and constructive thinking in problem identification and solving;
B3. To be able to communicate well and express thoughts in writing and orally, both in English and native
language; to communicate with specialists and non-professional audiences;
B4. To prepare research papers according to proper language, writing style and general bibliographic
citation requirements;
B5. To develop independent learning skills necessary to continue studies on a higher level;
B6. To communicate and to work effectively in an intercultural and interdisciplinary group or team.
B7. In addition to native language and English, to master the foundations of the third language, necessary
to maintain international cooperation relationships
B8. To know and to apply in practice certain aspects of various social sciences (history, geography,
sociology, logics, philosophy, arts, etc.), to supplement effectively the education of business or economics
by general knowledge.
SLO5
SLO5
SLO5
4