International Financial Management
International Financial Management provides you with a conceptual framework within which the key financial decisions of the multinational firm can be analysed. The module focuses on decision making in an international context, building on, and extending, the valuation framework provided by domestic corporate finance to account for dimensions that are unique to international finance.
This module offers an intuitive and real world grasp of the concepts and issues in international finance. A wealth of examples is provided to enable students to see the application of the subject to business, mostly from a multinational corporation’s perspective.
We have external guest speakers in this module to deliver topics on current issues that are closely linked with the theoretical content covered in the course.
This module equips students with the advanced knowledge to be able to understand and evaluate a multinational corporation’s performance, financing and investment activities, and its risks and opportunities, in a global context.
Links to the academic literature are provided by a selection of articles from academic journals at the end of each lecture, which ensures that students are able to reflect on and evaluate issues and problems in the subject at a high academic level.
Students will also develop team-working and presentation skills through a group case study presentation and a written assignment.
The sustainable operation of financial markets relies on the fact that security prices reflect the fair value of the future cash flows that they promise to pay. This module addresses the issue of the fair value of financial securities in an international setting.
Full module specification
|Module title:||International Financial Management|
|Duration of module:||
Duration (weeks) - term 2: |
The aim of this module is to introduce students to the subject of international financial management. In particular, it provides students with an overview of the financial environment in which the multinational firm and its managers function, including financial institutions, financial markets and exchange rate systems. It provides students with a critical understanding of the principles of currency risk management, multinational cost of capital and capital structure, multinational financing and foreign direct investment.
ILO: Module-specific skills
- 1. be familiar with the environment in which international financial management is undertaken;
- 2. understand the different types of foreign exchange risk that a multinational firm faces and the principles of foreign exchange risk management;
- 3. understand the principles of the cost of capital of the multinational firm and the determinants of its capital structure;
- 4. be aware of the issues concerning the financing of multinational firms;
- 5. be familiar with the main features of foreign direct investment..
ILO: Discipline-specific skills
- 6. develop theoretical arguments based on analytical reasoning;
- 7. rigorously analyse problems in finance;
- 8. interpret financial data and problems in the light of established theories;
- 9. access a wide body of empirical research literature and critically appraise it.
ILO: Personal and key skills
- 10. plan and manage their own study both individually and within a group;
- 11. make appropriate use of learning resources, including sophisticated computer datasets;
- 12. critically analyse problems arising in both academic and practical contexts;
- 13. effectively present the results of individual and collaborative projects as developed through the mode of instruction using both individual and group assignments.
Learning activities and teaching methods (given in hours of study time)
|Scheduled Learning and Teaching Activities||Guided independent study||Placement / study abroad|
Details of learning activities and teaching methods
|Category||Hours of study time||Description|
|Form of assessment||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Problem sets||20 minutes||9, 10||Correct answers|
|Mid-term test||45 minutes||1-6, 9-13||Oral and written model solutions|
Summative assessment (% of credit)
|Coursework||Written exams||Practical exams|
Details of summative assessment
|Form of assessment||% of credit||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|One In-class multiple choice and/or numerical problem-based Class Test||20||45 minutes||1-10||Solutions distributed on ELE, discussion in tutorials/lecture sessions|
|Individual Written Exam||80||1 hour and 15 minutes||1-8, 10-14||Extensive solutions available on ELE after the exam|
Details of re-assessment (where required by referral or deferral)
|Original form of assessment||Form of re-assessment||ILOs re-assessed||Timescale for re-assessment|
|In class test and written exam||Written examination (100%) 1 hour 15 minutes||1-8, 10-14||Aug/Sep|
- Introduction to the International Financial Environment
- Background of International Financial Markets
- Exchange Rate Determinants and Behaviour
- Currency Derivatives and Hedging
- Foreign Exchange Risk Measurement
- Foreign Exchange Risk Management
- Multinational Capital Budgeting, Cost of Capital and Capital Structure
- Financing the Multinational Corporation
- Foreign Direct Investment
- Current Issues in International Financial Management (given by guest speakers)
Indicative learning resources - Basic reading
The following text books will be used in the course. However given the nature of the topics additional readings will be indicated wherever required.
Eun, C. S and Resnick, B. G. (2015) International Financial Management, 7e, Mcgraw-Hill/Irwin Series in Finance, Insurance, and Real Estate
Bekaert, G. J., Hodrick, R. J. (2013) International Financial Management, 2e, Pearson New International Edition
Module has an active ELE page?
Indicative learning resources - Web based and electronic resources
A list of references and web resources will be made available on the ELE.
Indicative learning resources - Other resources
Lecture handouts will be based on related material from these texts and other references. Students are required to refer to original Chapters in the texts assigned in the readings for each week. Copies of the main text books are available in the library. The core material relevant to the course can be found in relevant chapters of alternate textbooks, however with at differing levels of difficulty. Some topics require reading of published papers and articles. Full details of references for each topic will be distributed at the start of the course.
Last revision date