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International Finance

International Finance

Code: FIE2LK005

Extent: 6 cr (160h)

Timing: 5th semester

Language: English

Level: professional studies

Type: compulsory (FINA)

Starting level

Student has completed Principles of Finance (FIE1LK005) or equivalent, Principles of Economics (ECO1LK001) and Business English(ENG1LK001). The course is recommended to be studied jointly with the International Economics (ECO2LK002) –course.

Learning outcomes

This course introduces students to the theory and practice of international finance and equips them with insights of financial management when leading and managing an international firm. A central learning goal is to understand how exchange rates are determined and how financial managers cope with the risks that fluctuations in exchange rates create. Upon completion of the course, the student

  • masters main tools and methods for analysing how firms can settle international transactions and manage their risk positions in international business.

  • can critically discuss the challenges and develop strategies of firms going international.

  • understands the role of international capital markets and financial intermediation in the global economy.

  • is able to study complex international economic phenomenas further.

Course contents

  • The global financial environment, markets and organisations, multinational enterprises

  • The international monetary sytem and international business transactions

  • Foreign exchange rates and quotations

  • Foreign exchange theory and markets

  • Foreign exchange exposure

  • International investment

  • International capital budgeting

  • Managing multinational operations

Learning methods

A mixture of contact hours and self-study. The course blends theory with the analysis of financial data and practical cases.
Guest lectures and potential team assignments organised around real-world cases.
Assessment of one's own learning 1 h

Accreditation of prior learning (APL)

Accreditation of prior learning (APL) is observed on the course according to separate instructions.

Teacher(s)

Annika Sandström

Course materials

Eiteman, D.K., Stonehill, A.I. and M.H. Moffett (2010). Multinational Business Finance, 12th global edition or newer. Pearson Education Inc, Prentice Hall.
Lecture notes and other material instructed by the teacher.

Assessment criteria

Students' performance is graded on the following scale: Excellent (5), Very good (4), Good (3), Satisfactory (2), Fair (1), Fail (0). Assessment is based on how well the student masters the course content, as scored by the skills and knowledge criteria outlined in the table below. Evaluation elements reflect key concepts and theories, calculation methods and practical examples given during the course.

Evaluation

criteria

1 (min. 40 % accomplished) 

3 (min. 70 % accomplished) 

5 (min. 90 % accomplished)

Knowledge

The student is acquainted with the nature of international business.

He/she understands the operations of foreign exchange markets.

The student is familiar with some of the theories and evidence on exchange rate relationships.

The student knows how international companies that deal in foreign currencies list foreign assets on their balance sheets and how they deal with related exchange rate risk.

Is aware of the challenges in investing abroad, and how foreign trade partners are offered payment time.

+ is familiar with the history of the international monetary system.

+ understands the functioning of various types of exchange rate regimes.

+ can explain the processes related to foreign investment and project finance in detail.

+  can detail the sources of risks that arise in international financial markets, and how these risks can be managed.

 

+ has a good understanding of the global economic environment.

+ knows how some economic models are applied to real world problems.

+ is aware of important and recent multinational financial challenges.

+ can make an assessment on how cultural, legal, political and institutional differences affect a firm’s choice of financial goals and corporate governance.

Skills

The student can perform basic analysis on the risks and opportunities associated with various forms of internationalisation.

+ knows how a firm can hedge currency risk in various situations.

Skills measurement is included both in the exercises, case studies and the final exam.

+ can explain central theories related to foreign exchange markets and analyse how well these are supported by data.

+ is able to measure and make management decisions on foreign exchange exposure.

+ knows how to approach problems related to exchange rate-, ecoomic- and translation risk.

 

+ can evaluate the financial performance of a foreign subsidiary of a multinational enterprise

+knows how to evaluate foreign investment decisions

 

Competence

Competence is measured only indirectly on this course

During the course, all students are being monitored closely how well they are able to communicate clearly and effectively various themes and topics under discussion.

Competence will develop from the above skills and knowledges, together with the ability to utilise other personal capacities to professional and personal development.

 

 

Assessment

Assessment components and their respective weights
50% examination
50% assignments with presentation(s), active participation

Note! All parts shall be passed.
The assessment of one’s own learning does not influence the grade. The assignment is the same for all courses/modules and the answers will also be used for course/module development. The assignment is completed online in WinhaOpaali.