Mednarodne finance

Cilji predmeta

The main objective of the course is to give students a focused overview of international finance issues, both at a global and at a corporate level. The course is designed to combine both a practical and theoretical approaches to global finance and to international corporate finance. The basic knowledge of international finance and corporate finance issues discussed at the graduate level is a necessary pre-requisite.

The course consists of two parts. The first part aimed at providing methodological backup for the whole course students will start with examining main concepts in international finance, namely (i) balance of payments, (ii) exchange rates, and (iii) international monetary system. With this introduction, the student will become familiar with the international financial environment for doing business. Understanding international financial environment is necessary for analyzing selected international finance issues relevant today. The following issues will be analysed within this framework: (i) country risk assessment, (ii) international capital flows, financial crises and “new international financial architecture”, and (iii) fixed-income instruments.

The main objectives of second part of the course are to introduce students to foreign exchange markets, to the macroeconomic variables that influence exchange rates, and to foreign exchange risks and then to use parity relationships to forecast exchange rates for capital budgeting, and to use financial markets to hedge foreign exchange risks and select the optimal sources of funding. This part of the course is designed to combine both theoretical and practical approaches to foreign exchange to solve the problems of businesses operating with multiple currencies. Knowledge of corporate finance issues discussed at the graduate level is a necessary pre-requisite. The specific details of international financial markets and institutions in this part of the course are kept to a minimum, with the main focus being on the applied mathematics of risk management and the all-in costs of funding.

Vsebina predmeta

Part 1

1. Conceptual framework for analysing international finance (3 hours)
• Balance of payments account and analysis
• Exchange rates and exchange rate policies
Case studies:
- Current account sustainability of an emerging economy

2. Financial crises in emerging economies and “new financial architecture” (3 hours)
• International financial system
• Definition and classification of financial crises
• Reasons for crises and solutions of financial crises
• Key elements of a “new financial architecture”
Case study:
- Argentina

3. Country risk and risk analysis by rating agencies (3 hours)
• Concept and analytical framework for measuring country risk and risk of other bond issuers
• Credit rating agencies and their importance
Case study:
- Country risk analysis of a country

4. International capital flows (6 hours)
• International capital flows and macroeconomic aggregates
• Classification, volume and structure of international capital flows
• Liberalization of international capital flows
• Main patterns of financial inflows into emerging economies
• Official flows – credits and grants
• Private debt flows through eurofinancial market – syndicated bank loans and Eurobonds
• Private equity flows – direct foreign investment and portfolio equity investment)
Case study:
- Transition countries

Part 2

1. Foreign Exchange Markets (6 hours)
• Terminology and basic calculations
• International parity relationships
Case studies:
- Waterside Furniture

2. International Valuation (3 hours)
• Fundamentals of international capital budgeting
• Using parity relationships to make exchange rate forecasts
Case studies:
- MSDI Alcala de Henares, Spain
- Ocean Drilling
- Hintz, Kessels, Kohl A.G.

3. Foreign Exchange Risk Management (9 hours)
• Background of foreign exchange risks and hedging
• Use of foreign exchange derivatives markets
• Use of swaps markets
• Evaluation of risk management alternatives

Case studies:
- Tiffany & Company (1993)
- Canphone Systems Inc.
- The Walt Disney Company’s Yen Financing
- R.J. Reynolds International Financing
- Universal Circuits Inc.

Nosilci predmeta