International Finance

Universidad EAFIT

Course Description

  • Course Name

    International Finance

  • Host University

    Universidad EAFIT

  • Location

    Medellín, Colombia

  • Area of Study

    Finance, Financial Management

  • Language Level

    Taught In English

    Hours & Credits

  • Contact Hours

    48
  • Recommended U.S. Semester Credits
    3
  • Recommended U.S. Quarter Units
    4
  • Overview

    Course Description:
    This course provides a general introduction to international finance and it contributes to
    the development of judgment in situation of management decision-making related to
    international finance issues applied to trade and investment.
    Students will be given an understanding of running a company that is involved with
    international trade and the macroeconomic implications of being part of an international economy.


    The course considers issues such as the determination of the exchange rates, the
    world's capital markets, the use of derivatives to manage exchange rate risk, and, in
    general, the most important aspects related to the key multidisciplinary issues in the
    field of international finance. All these aspects, will not only enhance student?s
    perspective and competence of the global financial market but also will complement its
    basic conditions to perform with excellence, according to the necessities of companies
    and the nation, improving their development trough their university life and preparing
    them for their careers in international business.


    Course Objective:
    The relationship that this course has with the overall general study plan is based on
    the quality of the financial tools that it provides to enhance the performance at a
    professional level and the abilities it develops in order to run a company that is
    involved with international activity.

    Additional objectives:
    To present the history of the International monetary system and its implications on
    today's financial market's activities.
    To introduce the student to the various theories about the parity conditions needed
    to maintain a financial order in the global economy.
    To understand the foreign exchange market, developing abilities to work with foreign exchange rates.
    To prepare the student on the covering and hedging needs that every international
    business negotiator must face when working in an international environment.
    To analyze the different exposures in terms of currency management that arise
    when being involved with different business models in a Global economy.
    Analyze the different options of capital availability and it?s uses by multinational enterprises.
    To present the different modalities taking place over the Multinational business
    environment in investment activities, such as FDI, Mergers, acquisitions, and
    valuation.

    Basic Competencies:
    Analysis of international financing and investment. Management of Multinational
    corporations.
    ANALYTICAL DESCRIPTION OF CONTENTS: THEMES AND SUBTHEMES
    UNIT 1: International Monetary Market Basics and History.
    Comparative Corporate governance and financial goals and the international monetary system.
    To understand the financial goals of the companies from a MNE's perspective,
    involving concepts as corporate governance, models of stake, stock and share holders
    wealth maximization and its implications on the board, directors and companies' performance.
    To understand the history of the International monetary system, it functions, the
    different currency regimes and its tradeoffs based on rules, discretion, cooperation and independence.

    UNIT 2: International Monetary Market. Theories and Instruments and international parity conditions. Foreign exchange rate determination and forecasting.
    To demonstrate how price levels and its changes (inflation) in a country determine the
    exchange rate at which its currency is traded.
    Show how interest rate reflects inflationary forces within each county and currency.
    Explain the different theories used for exchange rate determination.
    Understand the foreign exchange market, it functions, participants, transactions, size and instruments.
    To understand and study the different foreign currency derivatives used on the
    international monetary market, for hedging purposes and, as speculation tools on a
    pursuit of a profit, emphasizing on the use of this tools to enhance the companies' financial situations.

    UNIT 3: MNE's Environment, Foreign Exchange Exposure and Financial the Global Firm. Transaction, operatin and translation exposures. Global Availability of Capital. Cost and Sourcing Equity Globally. To analyze and study the different business exposures faced by MNEs. Identify and understand the sources, availability and cost of capital in the international currency market.

    UNIT 4: Foreign Direct Investment Theory and Decisions.
    Foreign Direct Investment Theory and Strategy. Cross-Border Mergers, Acquisitions, and Valuation.
    Study and analyze the opportunities for the reduction of financial cost to companies
    capable of accessing the international monetary markets. Explain why the international monetary market offers MNE's enterprises the
    opportunity to get more investors, and the new requirements that it implies to the companies' way of reporting and its performance. Study the processes that are been used on today's MNE environment to acquire companies, (Selling and buying) and the valuations techniques for price determination.

    Evaluations

    First partial test 20%

    Second partial test 20%

    Final exam 30%

    Follow up Activities 30%


    GENERAL BIBLIOGRAPHY
    EITEMAN David, STONEHILL, Arthur, MOFFET Michael; Multinational Business
    Finance 11th edition, Pearson l, 11th edition, 2007 (and 12th).

    Kirt C. Butler, Multinational Finance. International Thompson Publishing, Third edition,
    2003 .
    International Monetary Fund. [Homepage] [on line], Available on www.imf.org
    European Union [Homepage] [on line], Available on www.eu.org
    World Bank Organization [Homepage] [on line] Available on www.wb.org
    Newsweek Magazine.