ØABED3300 International Financial Management Course description

The objective of this course is to develop the ability to understand and manage the financial challenges of international 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 to make value maximizing decisions by embracing stakeholders’ expectations to enhance corporate economic, ethical, social, and environmental performance.

Language of instruction is English.

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.

None

After completing the course, the student should have the following overall learning outcomes defined in terms of knowledge, skills and general competence:

Knowledge

The student has knowledge of

• the international financial environment.
• the theories of international business.
• the theories of exchange rate determination.
• the complexities and the risks involved in international financial transactions.
• the various risk mitigation techniques, such as derivatives, that can be used to hedge foreign exchange rate risks.
• the emerging economic, ethical, social, and environmental issues in international financial management.

Skills

The student

• can measure foreign exchange risk exposures.
• 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 to devise value maximizing strategies.
• can describe and contextualize the principles of international financial management.
• can apply critical thinking, communication, and practice collaboration to international financial management.
• can identify the short-term versus long-term trade-offs in simultaneously responding to economic, governance, ethical, social, and environmental issues involved in international business decision making.

General competence

The student

• is aware of the development in corporate sustainability (ESG) drive.
• can rationalize and contextualize international corporate financial decisions to enhance firm value by embracing stakeholders’ expectations.
• can exchange views on economic, ethical, social, and environmental implications of international corporate financial decision making.

• The international financial environment
• The international monetary system
• Theories of exchange rate determination
• Exchange rate behavior
• Exchange rate risk management
• Currency derivatives
• Measuring exposure to exchange rate fluctuations
• Managing transaction, economic, and translation exposure
• Country risk analysis
• Asset and liability management in international context
• Emerging economic, ethical, social, and environmental issues in international financial management.

This course is delivered by way of lectures and uses MS Excel to analyze for international corporate financial decision making. For this purpose, this course uses case study method to apply the concepts of international corporate financial management to enhance corporate economic performance. The students are encouraged to work in groups wherein Peer Assisted Learning (PAL) helps in lifelong learning. While writing the case report, the students are encouraged to reflect upon governance, ethical, social, and environmental implications of their decisions embracing stakeholders’ expectations to enhance economic performance of international firms.

The following coursework requirement must have been approved in order for the student to take the exam:

• Coursework: One submission to be carried out in groups of 2-3 students. However, in some special cases a student may be allowed to work individually. The scope of the submission shall not exceed 3000 words. The information regarding the rollout and the submission deadline will be given in the beginning of the semester.

The coursework must be completed and approved by the given deadline in order for the student to take the exam. If the coursework requirement has not been approved, the student will be given the opportunity to submit an improved version one time by a given deadline.

The exam in the course is a supervised exam of 4 hours. The exam must be answered in English.

During the examination, the students are allowed to bring the following materials:

• Textbook - International Financial Management by Jeff Madura and Roland Fox
• One notebook containing hand-written and/or printed notes
• One dictionary Native language - English/English - native language or English - English

Please note that you are not allowed to bring any loose papers and post-it slips in either the textbook or the notebook.

Grade scale A-F

The exam papers are assessed by one internal and one external examiner.

At least 25% of the exam papers will be assessed by two examiners. The grades awarded for the papers assessed by two examiners form the basis for determining the level for all the exam papers.

Muhammad Azeem Qureshi