TEACHING PLAN FOR
• INTERNATIONAL FINANCE
1. Basic description
Name of the course: International Finance
Academic year: 2014-2015
Term: 1st
Code: 80125
Degree / Course: International Business Program
Contact hours: 50
Number of ECTS credits: 6
Total number of hours committed: 150
Teaching language: English
Lecturer: Ferran Macipe
Classroom: Amec
Timetable:
Tuesdays,
Thursays,
Office Hours:
15.30 - 18.00
15.30 - 18.00
Tuesdays, 18:00 – 19:00
Thursdays, 18:00 – 19:00
2. Presentation of the course
“The increasing openness and interdependence between countries” could be a simple
definition of Globalization. This process has many causes and implications (cultural,
technological, political, environmental, etc.), but it is widely accepted that Finance is the
dimension in which it is most advanced.
The course focuses on understanding the theory of international finance and on its real world
applications from a business point of view. Understanding the foreign exchange markets and
world capital markets (banking, debt and equity) is necessary to carry out a sound and
effective management of the firm from a financial point of view. And since multinational
corporations face opportunities but also risks, financial management involves the design of
appropriate strategies to hedge the company from actual and potential risks through the use
of the different types of financial assets (such as derivatives) available for this purpose.
3. Competences to be achieved in the course
General competences
Instrumental competences
G.I.2. Ability to relate concepts and
knowledge from different areas.
G.I.4. Ability to tackle and solve
problems.
G.I.5. Ability to take decisions in
complex and changing environments.
G.I.8. Oral and written competence in
communicating in English.
Specific competences
Disciplinary competences
E.D.1. Facilitate understanding of the
determinants and consequences of of
international financial transactions.
E.D.10.
Introduce
basic
financial
concepts and analytical techniques and
introduce
their
application
to
international transactions.
Professional competences
General personal competences
G.P.3. Moral commitment and ethical
sense.
Generic systemic competences
G.S.3. Ability to think globally.
Competences for applicability
G.A.1.
Ability
to
apply
acquired
knowledge and skills.
G.A.2. Ability to use quantitative criteria
and qualitative insights when taking
decisions.
G.A.3. Ability to search and exploit new
information sources.
E.P.1.
Ability
to
understand
the
decisions taken by economic agents and
their interaction in the markets.
E.P.2. Ability to analyse economic and
market indicators when taking decisions
within the organisation.
E.P.9. Assess and discuss the economic
and financial position of an organisation.
E.P.17.
Ability
to
express
and
understand
spoken
and
written
communication
in
English
at
an
advanced level in the international
business environment.
Own competences of the subject
Understanding and application of the systems and models that enable the financial flows and
operations to be carried out.
4. Contents
INTRODUCTION
1. Globalization and the Multinational Firm
PART I: FOREIGN EXCHANGE MARKETS
2. Balance of Payments
3. The Foreign Exchange Market
3.1 Market players
3.2 Spot rates, forward rates and foreign exchange swaps
3.3 A model of foreign exchange markets: interest parity
3.4 Real monetary assets, interest rates and exchange rates
PART II: INTERNATIONAL CAPITAL MARKETS and FINANCIAL MANAGEMENT TOOLS
4. International Capital Markets:
4.1 International Credit and Money Markets
4.3 International Bond Market
4.2 International Equity Markets
5. Currency Derivatives
PART III: HEDGING AND RISK MANAGEMENT
6. Risk Management and Hedging Strategies
6.1 Forecasting Exchange Rates
6.2 Measuring Exposure to Exchange Rate Fluctuations
6.3 Foreign currency futures and options
6.4 Managing Transaction Exposure
6.5 Managing Economic and Translation Exposure
PART IV: STRATEGIC DECISION-MAKING IN INTERNATIONAL FINANCE
7. Financing in the Long-Term
8. Financing in the Short-Term
9. Managing Net Working Capital
10. International Trade Finance
5. Assessment
The final grade will be determined by the weighted average of the following activities carried
out throughout the semester:
Assessment
elements
Time
period
Type of
assessment
Comp
Opt
Assessment agent
Lecturer
Selfassess
Type of
activity
Coassess
Grouping
Indiv
Weight
(%)
Group
(#)
In-class
quizzes and
assigned
exercises
Midterm
exam
Througho
ut the
semester
X
X
Conceptual
and
application
X
20%
Week 5
X
X
Conceptual,
application,
and overall
understanding
X
20%
Group
project
Final exam
(a minimum
grade of 4 is
required to
pass the
course)
Extra credit:
class
participation
Week 10
X
Exam
Week
X
Ongoing
X
X
Application
X
20%
X
Conceptual,
application,
and overall
understanding
X
40%
X
Analysis,
application
and synthesis
X
10%
Taking the final exam is a necessary condition to receive a quantitative evaluation of the
course. In case of non-attendance to the final exam, the student will receive an “N.A.”
grade.
Class participation will be evaluated as extra credit, contributing up to 1 point (out of 10) to
the final grade. Only those students who fulfill the following criteria can obtain partial or full
credit in this category of the assessment:
. demonstrate preparation: relate things to book chapters, readings and previous
discussions
. contribute in an active and significant way to ongoing discussions: keep analysis
focused, help solving exercises and questions, respond thoughtfully to other students'
comments, contribute to the cooperative argument-building, suggest alternative ways
of approaching the material.
Supplementary Evaluation
For those students who during the regular term evaluation have obtained a weighted final
grade below 5.0, but have obtained a continuous evaluation above 4.0 (In-class Quizzes and
assigned exercises and Group Project), there will be a supplementary evaluation according
to ESCI-UPF calendar and academic regulations. This supplementary evaluation will imply a
re-take of the final exam that will account for 40% of the total grade. The total final grade
will keep the obtained grades in the rest of continuous evaluation elements. The
participation extra credit is set to zero in the supplementary evaluation.
6. Bibliography and teaching resources
•
Basic bibliography
- MADURA, International Corporate Finance, South Western – Cengage Learning, 11/e,
International Edition, 2012
•
Supplementary bibliography
- BEKAERT and HODRICK, International Financial Management, Prentice Hall, 2/e,
2011
- EUN and RESNICK, International Financial Management, McGraw-Hill/Irwin, 6/e,
2011
- KRUGMAN, OBSTFELD and MELITZ, International Economics: Theory and Policy,
Prentice Hall, 9/e, 2011
•
Teaching resources
- journal, magazine and newspaper articles on current events
- power point slides prepared by the authors of the textbooks and by the professor
7. Methodology
The teaching and learning processes will be based on lectures preceded and followed by
independent study by students.
8. Scheduling activities
Week
Week 1
Session
Lecture 1
Lecture 2
Week 2
Lecture 3
Lecture 4
Week 3
Lecture 5
Lecture 6
Week 4
Lecture
Lecture
Lecture
Lecture
Lecture
Lecture
7
8
9
10
11
12
Lecture
Lecture
Lecture
Lecture
Lecture
Lecture
Lecture
Lecture
13
14
15
16
17
18
19
20
Week 5
Week 6
Week 7
Week 8
Week 9
Week 10
Exams
week
In class
Introduction. Globalization and the MNC
Balance of Payments: National Income
Accounts
Balance of Payments: Global Capital Flows
Foreign Exchange Markets: Exchange Rate
Determination
Foreign Exchange Markets: Exchange Rate
Determination
FE Market: Interest Rates & Exchange Rates
International Capital Markets
Currency Derivatives
Currency Derivatives
Midterm exam
Forecasting Exchange Rates
Measuring Exposure to Exchange Rate
Fluctuations
Managing Transaction Exposure
Managing Economic & Translation Exposure
Financing in the Long-Term
Financing in the Long-Term
Financing International Trade
Financing in the Short-Term
International Cash Management
Presentation of projects
Final exam
Class preparation
Madura, chapter 1
Krugman, Obstfeld, Melitz,
chapter 13
Krugman et al. chapter 13
Krugman et al. chapter 14
Krugman et al. chapter 14
Krugman et al. chapter 15
Madura, chapter 3
Madura, chapter 5
Madura, chapter 5
Madura, chapter 9
Madura, chapter 10
Madura,
Madura,
Madura,
Madura,
Madura,
Madura,
Madura,
chapter
chapter
chapter
chapter
chapter
chapter
chapter
11
12
18
18
19
20
21