International Corporate Finance

Semester Spring
Level 11
Credit Value 10
Module Co-ordinator Professor David McMillan
Contact Hours Lectures and Seminars: 2 hrs lecture per week and 1hr seminar per week
Assessment Assessment will comprise a one and a half hour class test (100 per cent of the module grade). The class test will contain both short and longer (essay-style) answers.  There will be no multiple choice.



Objectives

To provide an understanding of the key areas of finance within an international environment. Attention will be focused on:

  • the operation of the foreign exchange market;
  • the determinants of foreign exchange rates and changes in rates
  • the relationship between exchange rates, interest rates and inflation rates;
  • the use of the main derivative products (futures and options) in international finance;
  • the measurement of foreign exchange risk;
  • the management of foreign exchange risk;
  • international investments and aspects of portfolio management;
  • the cost of capital of multinational corporations

Learning outcomes

Knowledge and understanding of:

  • Understand the mechanics of the foreign exchange market and how exchange rates are quoted.
  • Identify and exploit opportunities to make money from currency arbitrage.
  • Understand the factors and different theoretical models that determine exchange rates
  • Understand the nature of the relationship between spot and forward exchange rates and how these relate to interest rates and inflation rates.
  • Identify and exploit opportunities to make money from covered (and uncovered) interest arbitrage.
  • Appreciate the differences between the major derivative instruments and identify the types of foreign exchange risk and interest rate risk that they may be used to hedge against.
  • Appreciate the types of foreign exchange risk faced by exporters, importers and multinational companies.
  • Calculate the hedged domestic value of future foreign currency cash flows using a money market hedge and a forward market hedge.
  • Understand potential government influence on exchange rates.
  • Understand the international aspects of portfolio management and the nature of correlations between markets and assets.
  • Understand the key components of international asset pricing models.

Generic Skills:

  • numeracy, through the manipulation and interpretation of financial data
  • methodical working through planning and prioritisation
  • effective listening
  • presentational skills
  • effective time management and the ability to work under pressure

Cognitive Skills:

  • the ability to analyse information  and solve structured problems
  • the ability to identify arguments and think critically

Division: Accounting & Finance

This module information is representative of what is included in the module in a given year. Details of actual reading, lectures and coursework may vary year to year and will be available at the beginning of the semester.

© University of Stirling FK9 4LA Scotland UK • Telephone +44 1786 473171 • Scottish Charity No SC011159
Portal Logon