International Finance

The international financial environment is increasingly complex. Multinational firms, as compared to purely domestic ones have greater opportunities in terms of diversification, scale economies, and larger cost effective financing sources. On the other hand they also face greater risks: political instability, exchange rate fluctuations, and complex fiscal regulations. Since multinationality is an increasing feature of modern business, managers of firms (be they international or domestic) must have some of the knowledge and skills required by multinational business. The rapidly increasing integration of capital markets renders this even more imperative.

This course is, therefore, intended to expose students to the concepts, techniques and instruments of international financial management. Its objectives are threefold, namely:
- To understand the international financial environment and its evolution
- To apprehend the influences of international business on financial management
- To master the basic techniques of solving international financial problems

The topics covered are:

I. Financial Goals and Corporate Governance
II. Balance of Payments
III. The International Monetary System
IV. The Foreign Exchange Market
V. International Parity Conditions
VI. Foreign Currency Derivatives
VII. Interest and Currency Swaps
VIII. Multinational Capital Budgeting