ØABED3300 International Financial Management Course description

The objective of this course is to develop the ability to understand and manage the particular financial challenges of multinational firms. These firms buy, sell, invest and source capital in foreign markets. They are thus faced with currency rate risk as well as risk related to foreign interest rates. Currency and interest rates are related to each other and to inflation and economic development. International financial management involves measuring risk exposure, evaluating the various options available in financial markets for dealing with the risks and making value maximizing decisions.

Letter grading A-F.

No prerequisites.

The objective of this course is to develop the ability to understand and manage the particular financial challenges of multinational firms. These firms buy, sell, invest and source capital in foreign markets. They are thus faced with currency rate risk as well as risk related to foreign interest rates. Currency and interest rates are related to each other and to inflation and economic development. International financial management involves measuring risk exposure, evaluating the various options available in financial markets for dealing with the risks and making value maximizing decisions.

The course instructor will grade the assignment. Whereas an external examiner and the course instructor (internal examiner) will decide the grade for the written exam. The overall/final grade of the course will be based on an weighted average of the assignment and the written exam.

The course material is discussed in lectures. Instructor provides suggestions for voluntary exercises. The students are encouraged to work in groups on one assignment that count 25% towards final grading. However, in some special cases a student can work individually on this assignment.

None

Knowledge

The student

• appreciates the complexities involved in international financial transactions.
• understands the various factors that help determine exchange rates.
• can calculate foreign exchange risk exposures.
• understands the various risk mitigation techniques, such as derivatives, that can be used to hedge foreign exchange rate risks.

Skills

The student can

• apply financial theory in analysis of complex risk management problems faced by multinational firms.
• develop risk mitigating strategies exploiting instruments that are traded in international financial markets.
• assess value effects for the firm's owners of risks and risk mitigating techniques in order to devise value maximizing strategies

The course material is discussed in lectures. Instructor provides suggestions for voluntary exercises. The students are encouraged to work in groups on one assignment that count 25% towards final grading. However, in some special cases a student can work individually on this assignment.

One written assignment. Normally, the assignment is carried out in a group of 2-3 students, but in some special cases a student may be allowed to work individually.

Grading is based on the mid-term assignment and a written exam at the end of the term. The assignment counts 25% towards the final grade and the four-hour, written exam counts 75%.

No formal grading decisions are made until after the final exam and only the final grade can be challenged.

A list of reference aids allowed will be published on our website.