University of Technology SydneyHandbook 2008

25731 International Finance

Faculty of Business: Finance and Economics
Credit points: 6 cp

Subject level: Postgraduate

Result Type: Grade and marks

Requisite(s): 25742 Financial Management OR 25746 Financial Management: Concepts and Applications
These requisites may not apply to students in certain courses.
There are also course requisites for this subject. See access conditions.

Handbook description

This subject examines foreign exchange markets, multinational working capital, international investments and the financing of international operations. Students learn how to understand how firms operate in the international financial environment.

Subject objectives/outcomes

On successful completion of this subject students should be able to:

  1. Understand the foreign exchange market and the terminology used
  2. Understand the parity relationships between spot and forward exchange rates, interest rates and inflation rates
  3. Evaluate international investment decisions to ascertain whether a foreign investment is viable
  4. Analyse different ways of financing foreign operations through global capital markets like Euromarkets
  5. Evaluate the implications of the interaction of political risk issues with foreign investment and financing decisions.

Contribution to graduate profile

International Finance seeks to extend the corporate finance framework. Consideration of foreign exchange markets and parity relationships forms a basis to subsequent subjects dealing in corporate treasury management and synthetic financial products. International investment and financing issues impact on investment management decisions and strategies.

Teaching and learning strategies

The subject will be taught using a combination of lectures and workshops. These classes will be supplemented with both printed and electronic learning materials and resources. The UTS web-based communication tool (UTS Online) will be used to share information and encourage interaction between staff and students. Students will also use appropriate computer software such as spreadsheets and word processors to complete assigned tasks.

Content

  • Introduction to International Finance
  • Foreign Exchange Markets
  • Foreign Exchange Risk Management
  • Multinational Working Capital Management
  • Foreign Investment Analysis
  • Special Financing Vehicles - interest rate and currency swaps
  • Designing a global financing strategy.

Assessment

Two Quizzes (Individual)40%
The quiz is designed to assess students' understanding of the theories and concepts to demonstrate that students have met objective 1-3.
Final Exam (Individual)60%
This exam, consisting of multiple choice and short answer questions, will test students' understanding of the theory and their ability to apply the theory to financial management decisions. This will enable students to demonstrate that they have met objectives 1-5.

Recommended text(s)

Shapiro, A C. (2003). Multinational Financial Management, 7th ed., John Wiley.

Indicative references

Baker, J C. (1998). International Finance, Prentice-Hall.

Eaker, M R., Fabozzi, F J., Grant, D. (1996). International Corporate Finance, Dryden Press.

Eiteman, D K and Stonehill, A I., Moffett, M H. (1999). Multinational Business Finance, 8th ed., Addison Wesley.

Eun, C S., Resnick, B G. (2001). International Financial Management, 2nd ed., McGraw-Hill.

Levich, R M. (2001). International Financial Markets, 2nd ed., McGraw-Hill.

Madura, J. (1998). International Financial Management, 5th ed., South-Western College Publishing.

Moosa, I A. (1998). International Finance, Irwin/McGraw-Hill.

Solnik, B. (1996). International Investments, 3rd ed., Addison Wesley.