Foundations of Corporate Finance: International Environment

The course presumes an understanding of basic corporate finance provides a background on the international environment and focuses on the managerial aspects from a corporate perspective. In general, the course introduces the major markets that facilitate international business, describes relationships between exchange rates and economic variables, explains forces that influence these relationships, and explains the measurement and management of exchange rate risk. The course aims to cover quotations in foreign exchange, spot, forward, and cross rates, international finance parity conditions, risk in an international context, foreign exposure management and measurement, hedging tools and specialized instruments, international diversification, universal hedging, international debt and equity, and Euromarket. Further, this unit aims to provide a systematic treatment of the technical and analytical aspects of modern international finance. The unit focuses on the workings of firms and multinational corporations that operate in a multinational environment. More specifically, the coverage includes: 1. The international financial environment: globalization and the multinational enterprise, foreign exchange markets, quotations, arbitrage, and exchange rate determination. 2. Foreign exchange and interest rate risk management: how multinational corporations measure and manage foreign exchange and interest rate risks using derivative products and instruments. 3. International banking, the international money market, and international trade finance.