International Finance

Course description

This course introduces students to institutions and to the operation of the international macroeconomic environment. Topics include: capital, money, currency and derivatives markets;the balance of payments; macroeconomics of an open economy; the determination of exchange rates; international parity relations; exposure to foreign exchangerisk and hedging instruments; the international capital budget and other international aspects of financial decisions.

 

Relevance
Student should understand that multinational and export or import oriented enterprises continues to be dependent on its ability to recognize and benefit from imperfections in national markets for products, factors of production and financial assets. Students should dominate the theme that volatile exchange rates may increase risk, but they also create opportunities for both investors and firms to profit if it is given to the data a proper understanding of exchange risk management. Recognize the increasing importance of global integration of money and capital markets, a trend that is creating expanded opportunities for both investors and organizations that need to raise capital. Also understand that global integration of financial markets regulates some of the market imperfections and the flow of international capitals, and generates excellent opportunities for investors to increase their returns while lowering their risk through international portfolio diversification and for firms to lower their cost of capital by sourcing it internationally.

 

Competences to develop

• Institutional competencies

-Ability to communicate effectively orallyand in writing.

-Ability to identify ethical issues and address them in a socially responsible manner.

• Generic competencies

-Ability to analyze and understand financial theories, reports and markets.

• Specific competencies

-Ability to identify and manage the business risks of organizations.

-Ability to develop, implement and manage administrative control systems.

-Ability to identify the functional interrelationships of the organization.

-Ability to evaluate and manage business projects in different types of organizations.

-Ability to interpret accounting information and financial information for management decision making.

-Ability to use cost information for planning, control and decision-making.

-Ability to make investment decisions, financing and managementof financial resources in the company.

-Ability to identify ethical and cultural aspects of reciprocal impact between the organization and the social environment.

 

General objective of the course

This course will be oriented to:

The main objective of this course is for students to acquire the knowledgeand skillsrelated to the operations of international financial markets, the risks associated with financial operations in different currencies and the instrumentsthat can be used to cover them. It will promote as well the ability to apply these concepts within the financial decision-making process at an international level.

 

 

Learning outcomes
Knowledge

• Understand the concepts related to the balance of payments and its importance in determining the exchange rates of a country.
• Understand the concept of foreign exchange risk and the different derivative instruments that can be used for their hedging (futures and futures markets on currencies and markets for options and options on currencies).
• Understand the concepts related to international investments and the risks associated with them.
• Understand the concepts related to the financial evaluation of projects at an international level, including the issue of the capital structure and the cost of capital of multinational companies and aspects related to taxes and corporate strategy at the multinational level.

Abilities

• Understand the functioning of the international financial markets including the foreign currency, Eurocurrency, bond and domestic and international stock markets and the operations performed therein
• Understand adequately international parity relations and the importance of their use in international financial management.

Attitude

• To develop the skills of observation, examination and analysis, that allows anyone in this class to select a procedure in a logical, efficient and quick manner to provide solution to the questions popped up anywhere anytime within the environment of an international company whether its environment is the local market, the international market or both.