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Unit of study_
FINC3011: International Financial Management
Markets are increasingly globalised. There are very few businesses or industries that are not required to deal with issues such as foreign currency, foreign competition and direct investment. This unit is designed to allow students to extend their understanding of basic principles in finance to an international environment. Globalisation of markets introduces risks but also opens up profitable opportunities. Topics covered include: foreign currency valuation and markets; international parity conditions; measuring and managing foreign exposure; international portfolio management; capital budgeting and foreign direct investment; international tax management and international financing strategy.
| Code | FINC3011 |
|---|---|
| Academic unit | Finance |
| Credit points | 6 |
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Prerequisites:
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FINC2012 |
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Corequisites:
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None |
| Prohibitions:
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None |
At the completion of this unit, you should be able to:
- LO1. explain and identify the risks as well as the opportunities that underpin the financial operations of business firms operating in an environment of open and integrated financial markets
- LO2. apply basic exchange rate concepts to foreign exchange markets as well as describe and explain how the foreign exchange market is organised and operates
- LO3. understand and effectively apply the concepts of arbitrage and speculation in international financial markets
- LO4. explain and effectively apply, fundamental international parity conditions such as Purchasing Power Parity and Covered and Uncovered Interest Parity
- LO5. explain how currency derivative contracts such as futures, forwards, swaps and options can be used to hedge and speculate based on anticipated exchange rate movements. Apply different derivative tools to hedge and manage foreign exchange risk
- LO6. recognise and explain the different forms of foreign exchange exposure that a business enterprise may confront and describe how such different exposures can be managed
- LO7. evaluate why domestic firms may wish to indulge in foreign currency financing and investment as well as comprehend how the choice is made between domestic currency and foreign currency financing and investment decisions. Evaluate the benefits and risks of off-shore financing
- LO8. work in groups to analyse and evaluate the hedging/financing practice of a multinational firm
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