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.

The course primarily covers topics that do not build on elective courses. Thus required courses from first two years suffice although some concepts from elective courses, Corporate Finance (Foretaksfinans) and International Economics in particular, are useful.

No prerequisites.

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

None

The grading is based on two components: 1. Obligatory Assignment; 2. Written examination.

The obligatory assignment counts 25% of the final grade. This assignment is to be carried out in groups of 2-3 students. However, in some special cases a student may be allowed to work individually. The teacher will give information regarding the deadline for handing in the assignment. The four-hour written examination at the end of the term counts 75% towards the final grade.

The final grade is based on weighted average of the obtained grades of the two components i.e. 25% for assignment + 75% for written exam.

The students who wish to write the examination later, or the students who want to re-write the examination are not required to do the assignment afresh. Their obtained grade of the assignment shall count towards their final grade.

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

When dimensioning large, complicated structures, the finite element method (FEM) is used to calculate stresses and strains in different parts of the structure. The course provides the theoretical basis for the finite element method and describes the different types of elements used in the modelling of frames, beams, discs, plates, shells and massive structures. The course shows how the fundamental linear theory behind the method, combined with numerical calculations, predicts displacements, strains and stresses. The properties of the elements, convergence requirements and modelling errors are also addressed. In the modelling of structures, emphasis is placed on the choice of element types, the application of loads and the introduction of boundary conditions, as well as the verification of the final analysis results.

To give students a deeper understanding of the theory, a compulsory assignment is included where a simple structure is analysed using FEM software.

No formal requirements over and above the admission requirements.

After completing the course, the student is expected to have achieved the following learning outcomes defined in terms of knowledge, skills and general competence:

Knowledge:

The student:

· has in-depth knowledge of the theoretical basis of the finite element method

· has in-depth knowledge of matrices and load vectors

· has advanced knowledge of numerical integration methods and convergence criteria

· has advanced knowledge of the formulation of element types for the modelling of beams, discs, plates, shells and massive (three-dimensional) structures for linear static structural analysis.

Skills:

The student:

· is capable of calculating stiffness matrices and load vectors for elements, understanding stiffness relationships for a structure and assembling the stiffness matrix of a structure based on the stiffness matrices of the individual elements

· is capable of using FEM software to perform linear static analyses of simple structural systems.

General competence:

The student:

· is familiar with the basis for the finite element method for solving structural problems

· understands the need for and use of the finite element method as an analysis and dimensioning tool

· is familiar with the calculation process involved in the finite element method, and its limitations

· is capable of evaluating the results of finite element method calculations.