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IIF-P08
(PGDM 2008-10 : Term-IV)

INTRODUCTION TO INTERNATIONAL FINANCE
(1.5-Credit Elective)

(Course Lecturer: Dr. Sushanta Mallick)
School of Business and Management
Queen Mary, University of London
E-mail: s.k.mallick@qmul.ac.uk

COURSE OUTLINE

Aim of the module:
The aim of this module is to develop an understanding of topics in international finance, viewed primarily from the perspective of managers doing business overseas, namely the management of foreign exchange exposure, multinational investment decisions with regard to fixed interest securities, equity markets, interest rates and exchange rates, international risk diversification and global asset allocation structures. It also involves the understanding of the macroeconomic environment governing international business.

Learning Outcomes:
On completion of this course, students should have gained understanding of the following topics: the international financial systems, the opportunities in international investments, the risk-return trade-off in international investments, the financing options available to multinational financial manager, the relevance of hedging in the management of currency risk, and international risk diversification. Students should be able to learn the importance of international financial theories to finance practitioners; write well constructed essays using balanced arguments; critically evaluate relevant information from a variety of sources; acquire numerical and problem-solving skills required by managers in the context of globalisation and the growing integration of the international economy.

Module Outline:
1. Features of International Finance – A brief history of Money and Finance
The International Monetary System – The Balance of Payments; International Financial markets – The foreign exchange market and currency risk management.

2. The European Monetary System (EMS) and European Monetary Union (EMU)
Historical background; EMS achievements; EMU performance

Reading: Paul De Grauwe, 2006, The Economics of Monetary Union, OUP.

3. Global Financial Markets
International Money Market, International Bond Market, International Equity Market, International Portfolio Investment Market, and currency and interest rate derivatives.

4. The Foreign Exchange Markets
Exchange rate determination, International Parity Conditions - Relationship between Inflation, Interest Rates, and Exchange Rates; Spot and forward exchange rates; risk premia.

5. Foreign Exchange Risk Management
Hedging foreign exchange risk – Transaction Exposure, Economic Exposure, Translation Exposure

6. Multinational Financial Management (Investing overseas)
Direct Foreign Investment; Joint Ventures; Outsourcing; Political Risk Assessment and Management; Cross-Border Mergers and Acquisitions, and Capital Budgeting; Multinational Capital Structure and the Cost of Capital; Cash and Working Capital Management; International Trade Finance and Taxes.
7. International Financial Reporting and Analysis
Financial disclosure / transparency, incentives for off-balance sheet liabilities, international financial reporting differences.

Assessment:
The overall grade will be based on mid-term coursework test (20%), and a final examination (80%). The coursework test will take the form of a one-hour test comprising 30 multiple choice type questions.

Required Textbooks:

1. Connolly, Michael, 2007, International Business Finance, Routledge, London.
2. Eun, Cheol S. and Bruce G. Resnick, 2007, International Financial Management, 4th edition, McGraw-Hill/Irwin.
3. Pilbeam, Keith, 2006, International Finance, 3rd edition, Palgrave/Macmillian.

Additional reading materials will be assigned during the course. The assigned texts should not be taken as the only "textbooks" of the course. Students are encouraged to consult, in addition to lecture notes, other related materials.
Created By: Bijoy Kar on 04/02/2009 at 12:51 PM
Category: PGP-II Doctype: Document

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