International Finance

SM82.05: International Finance [3 Credits]
Semester: Inter Semester

Rationale:

Internationalization of financial markets has been the consequence of, among other factors, globalization of trade and evolution of information technology. An increasing number of companies from emerging markets are accessing both investment and financing opportunities globally. Professionals building a career in banking need to understand the risks and rewards of such international financing and investment decisions, either of their clients or of the banks themselves, which can impact their banks.

This course will enable participants to:

  • Understand the role of money in a modern economy
  • Understand the interaction between financial markets and the real economy
  • Understand the structure and functioning of the international monetary system and of foreign exchange markets
  • Be familiar with the most important concepts of international economics
  • Be familiar with special issues and problems arising from financial crisis


Catalog Description:

Financial Markets, Monetary System, International Economics, Financial Crisis

Pre-requisite(s): None

Course Outline:

I. Currency Rates and Corporate Finance

  • Exchange Rate Regimes
  • Determinants of Exchange Rates
  • Managing Exchange Rate Risks

II. International Financial Markets

  • Cost of Capital and International Financial Markets
  • International Equity Markets
  • International Bond Markets
  • International Banking

III. International Investments

  • Capital Budgeting in an International context
  • Cross Border Mergers and Acquisitions
  • International Portfolio Investments
  • Foreign Direct Investments
  • Managing International Investment Risks

Textbook(s):

Eiteman, D. K.,., Stonehill, A. I., and Moffett, M.H.:
Multinational business finance, Upper Saddle River, NJ, Pearson Addison-Wesley (11th Edition), 2009.

Reference Books:

Desai, M.:
International finance: A case book, Hoboken, NJ, John Wiley and Sons, 2007

Sercu, P.:
International finance: Theory into practice, Princeton, NJ, Princeton University Press, 2009

Kindleberger, C.P., and Aliber, R.:
Manias, panic, and crashes: A history of financial crises, Basingstoke, Palgrave Macmillan (5th Edition), 2005.

Journals and Magazines:

Journal of Economic Studies
Journal of Applied Corporate Finance
Managerial Finance
Pacific Basin Journal of Finance
Harvard Business Review

Grading System: The final grade will be computed from the following constituent parts: mid-term exam (30%), final exam (40%), laboratory and assignments (30%). Open/closed-book examination is used for both mid-term and final exam.

Instructor(s): Dr. Sundar Venkatesh