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Course Description
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Course Name
International Finance
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Host University
Universidad Pompeu Fabra
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Location
Barcelona, Spain
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Area of Study
Finance
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Language Level
Taught In English
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Prerequisites
International Finance (IBP Version) is the version of the course pertaining to the UPF International Business Certificate Program. Students wishing to obtain this certificate must enroll in the required core course, "International Management," and either "International Economics" or "International Finance." Students have the option of taking all three, however the UPF recommends that students only take either Economics or Finance, and not both, as the content is somewhat similar. Upon successful completion of the IBP courses, students will receive a certificate stating they participated and completed the UPF International Business Program.
Students are welcome to take this class individually and apart from the International Business Program. As a solo course, it is recommended for someone with a more basic knowledge of Finance over the International Finance (GNMI Version - only offered Fall).
Advised previous requirements: Finance.
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Contact Hours
45 -
Recommended U.S. Semester Credits3
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Recommended U.S. Quarter Units4
Hours & Credits
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Overview
COURSE OVERVIEW
This course aims to provide students with a good understanding of the financial decisions taken by managers at international firms. Case studies will be discussed to see why multinational companies take certain operational and strategic financial decisions, and currency risk management will be analysed. Derivative products and the foreign exchange market will be explained, with a focus on currency derivatives as a hedge. Finally, international payment methods, multinational cash management techniques and transfer prices will be analysed.
LEARNING OUTCOMES
- Assess and discuss the economic and financial diagnosis of multinational companies and take decisions in order to determine an action plan to solve any problems.
- Facilitate understanding of financial derivatives, such as forwards, futures, call and put options.
- Introduce basic foreign exchange market concepts.
- Understand how currency risk affects companies and how they can be hedged by means of currency derivatives.
- Introduce multinational cash management techniques such as netting systems, central depositories and transfer prices.
COURSE CONTENTS
OPERATIONAL FINANCE APPLIED TO MULTINATIONAL COMPANIES (I): DIAGNOSIS
- Operational Finance
- The Business at a Glance
- Economic Analysis
- Needs of Funds for Operations vs. Working Capital
- Financial Analysis
- Operational Ratios
- Diagnosis
OPERATIONAL FINANCE APPLIED TO MULTINATIONAL COMPANIES (II): ACTION PLAN
- Financial Forecasting
- Action Plan
- Growth without Extra Financing
- The Value Chain
LONG-TERM STRATEGIC FINANCIAL DECISIONS APPLIED TO MULTINATIONAL COMPANIES
- Effects of Debt
- How Much Debt Should We Have?
- When to Ask for Debt
- Types of Debt to Take On
- Criteria for Deciding: Debt or Equity
FINANCIAL DERIVATIVES
- Derivatives Concept
- Purpose of Derivatives
- Forwards
- Futures
- Daily Settlement of Positions and Posting Margins
- Call Options
- Put Options
- Using Derivatives as a Hedge
CURRENCY MARKET
- Spot and Forward Exchange Rates
- Foreign Exchange Market
- How the Price of a Currency is Quoted
- Why Currencies Fluctuate
- Spot Exchange Rate, Price and Inflation: the Law of One Price and Purchasing Power
- Parity (PPP)
- Spot Exchange Rate and Interest Rate: Fisher Effect
- How to Calculate the Forward Exchange Rate
CURRENCY RISK MANAGEMENT
- Currency Risk Concept
- Currency Forwards as a Hedge
- Currency Options as a Hedge
- International Payment Methods
MULTINATIONAL CASH MANAGEMENT
- Netting Systems
- Central Depositories
- Transfer Prices
Course Disclaimer
Courses and course hours of instruction are subject to change.