International Finance (in English)

Course Description
This course will explore the world of international finance including the dynamics of exchange rates, foreign investment, and how these affect international trade. It also includes a brief introduction to the study of futures, options and currency swaps.

Course Goals and Methodology
The main purpose of this course is to introduce students to the complex world of International finance. The methodology of the course will be based on slides summarizing key concepts, problem sets with practical application of financial theory and quizzes that check student’s understanding of key concepts presented.

The first part of this course is dedicated to establishing that a global marketplace exists and in order to be competitive you must be an active participant. Various risks that need to be considered when doing international business and the major difference between domestic and international finance. Later, the history of today’s international monetary systems, its major players and the current exchange rate regimes that exist today will be presented. The current market for foreign exchange will be introduced and students will learn to read and interpret currency quotes, translate quotes and manipulate currency exchange rates to create arbitrage opportunities.

Finally, futures contracts and forecasting future exchange rates will be introduced along with a discussion of various economic theories including:
1) Purchasing Power Parity,
2) the Fischer Effect, and
3) the International Fischer Effect.
The course will conclude with a brief introduction to the derivatives market including futures and options.

Learning Objectives
At the conclusion of this course students will:
1. Learn and understand the terminology used in international finance (futures, forwards, arbitrage, inflation, options, etc.)
2. Demonstrate knowledge and ability to forecast currency future values and properly access whether the currency is over/undervalued and why.
3. Demonstrate ability to analyze and evaluate both international financial borrowing and investment opportunities.
4. Analyze and evaluate hedging opportunities, making and receiving international payments, and evaluating transactions in both dollar and foreign currency terms.

Course Requirements and Grading
Your final grade will be calculated according to the following:
Midterm Exam 20%
Final Exam 30%
Final Project 35%
In-class participation 15%

Course Content 
Chapter 1. Globalization and the Multinational Firm.
Chapter 1 David Ricardo’s Comparative Advantage Theory.
Appendix

Chapter 2. The International Monetary System
Chapter 3. The Market for Foreign Exchange
Chapter 4. International Parity Relationships & Forecasting Foreign Exchange Rates
Chapter 5. Futures and Options on Foreign Exchange (Brief Introduction)