SFB12614 International Finance (Vår 2018)

Emnet er tilknyttet følgende studieprogram

Compulsory for students on  the Business Administration Programme, specializing in International Business or Economic Analysis.

Optional for for students on  the Business Administration Programme, specializing in Project Management and Corporate Consultancy.

Optional for other students on the Business Administration Programme.

Forkunnskapskrav utover opptakskrav

Microeconomics, Macroeconomics or equivalent.

Undervisningssemester

6th semester (spring).

Studentens læringsutbytte etter bestått emne

This subject will enable the student to achieve the following learning outcomes.

Knowledge
The student will have gained knowledge of the functioning of the system of international finance both from the perspective of the international macro economy and from the perspective of a firm operating in international markets. This includes a wide spectrum of concepts, such as the idealized concept of 'purchasing power parity', the benefits and costs of hedging and speculating with derivatives and the effects portfolio diversification. The student will have gained an understanding that risk cannot be eliminated - it can only be re-distributed to others.

Skills
The student will have learned to analyze and interpret key markets, institutions, processes and instruments of the global financial economy. This includes theoretical concepts, based on mathematical models, graphical representation and text- and data analysis. In particular the student will have learned to evaluate the benefits, costs and risks of globalization.

General competence
The student will have built a frame of reference for understanding and evaluating the functioning of the global financial markets, its opportunities, challenges and risks. The student will be ready to use the above mentioned methods of analysis to arrive at answers to specific questions under the uncertainties presented by global financial conditions - be it in the pursuit of more advanced academic degrees, or be it in the student's future role as economist, entrepreneur, administrator, policy-maker or educator.

Innhold

This course is built around three central questions: 'How does the system of international finance function?' ' What are the specific instruments that, for better or for worse, are used by the participants in international financial markets for the purpose of hedging against risk, and for the purpose of embracing risk through speculation?', and 'How could things go so wrong to produce a financial crisis that has led to world recession?'

Topics are:

• The "Great Financial Crisis" and the Myth of the Rational Market
• Foreign Exchange Markets
• Derivatives
• Hedging
• Speculation
• Interest Rate Exposure: Interest Rate and Currency Swaps
• Exchange Rate Determination
• Adverse Selection
• Moral Hazard
• Credit Rationing
• Selected Topics in International Finance

Undervisnings- og læringsformer

Students will participate in the following learning activities:

Lectures; seminars; group work to solve analytical tasks and practice team approach to problem solving; discussion groups on theoretical modeling; discussion groups on data analysis; one-on-one coaching.

Arbeidsomfang

The course will give the student approximately 280 hours of work.

Arbeidskrav - vilkår for å avlegge eksamen

Three analytical group written assignments will be assessed on a 'pass'/'fail' basis.

A 'pass' on all assignments is necessary to obtain permission to take the final exam.

Eksamen

Four hours written examination
Aids allowed: approved calculator, mother tongue - English - mother tongue dictionary.
Grades: A - F.
An updated list of accepted resources that may be used during the exam will be available on the Studentweb before the exam.

The students have the right to complain on the grades given on the written examination.

If a student gets F, the re-sit exam might be arranged in June, in case three students sign up for the re-sit. If less than three apply for re-sit, the next exam will be a regular exam next Autumn. Students must be aware of that content, requirements and textbook may have changed, and it is a student's responsibility to check it and get updated. Students have to sign up for the exam within the deadline.

Evaluering av emnet

To improve the course, we need the evaluations from the students. The course is evaluated by the students and the evaluations from the students are treated by the staff and the faculty's committee for quality of education.

Litteratur

The readinglist was last updated 5 December 2016. Changes can be made before semester start.

Mandatory literature
Main Textbook: Eiteman, David K., Arthur I. Stonehill and Michael H. Moffett (2015). Multinational Business Finance, 14th ed. (Global Edition) Boston: Pearson/Prentice Hall.

Handouts: There will be additional texts made available on the university college LMS. They will be listed in the lecture schedule made available at the beginning of spring semester. These texts are part of mandatory literature and they are exam relevant.

Additional reading

• Fox, Justin (2009). The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street. Harper Collins Publishers.
• Bellamy Foster, John and Fred Magdoff (2009). The Great Financial Crisis: Causes and Consequences. Monthly Review Press.
• Howells, Peter and Keith Bain (2007) Financial Markets and Institutions, Prentice Hall.
• Moffet, Michael H., Arthur I. Stonehill, and David K. Eiteman (2014), Fundamentals of Multinational Finance, Pearson International Edition, Prentice Hall.
• Berk, Jonathan and Peter DeMarzo (2013), Corporate Finance, Pearson International Edition, Addison Wesley.
• Bodie Zvi, Robert C. Merton, and David L. Cleeton (2012), Financial Economics, Pearson International Edition, Prentice Hall.
• Thomas Piketty (2014), "Capital in the Twenty-First Centtury", (translated into English by Arthur Goldhammer), Belknap Press.
• Levinson, Marc (2014). The Economist Guide to Financial Markets: Why they exist and how they work. 1st edition. Publisher: The Economist. Series: Economist Books.
• Arnold, Glen (2012). Financial Times guide to the Financial Markets. 1st edition. Publisher: FT Press
• Madura, Jeff (2014). International Financial Management. 12th edition. Publisher: Cengage Learning.
• Madura, Jeff (2014). Financial Markets and Institutions. 11th edition. Publisher: Cengage Learning.
• James, Jessica; Marsh, Ian; Sarno, Lucio (eds.) (2012). Handbook of Exchange Rates. 1st edition. Publisher: Wiley.
• Hull, John (2015). Risk Management and Financial Institutions. 4th edition. Publisher: Wiley.
• Augen, Jeff (2013). Trading Options at Expiration: Strategies and Models for Winning the Endgame. Publisher: FT Press.
• Moloney, Niam; Ferran, Ellis; Payne, Jennifer (eds) (2015). The Oxford Handbook of Financial Regulation. Publisher: Oxford University Press.
• Guillén, Mauro F. (2015). The Architecture of Collapse: The Global System in the 21st Century. Publisher: Oxford University Press.
• Kedar-Levy, Haim (2016). A Critical History of Financial Crises: Why Would Politicians and Regulators Spoil Financial Giants? Publisher: World Scientific.
• Moosa, Imad A. and Bhatti, Razzaque H. (2009). The Theory and Empirics of Exchange Rates. Publisher: World Scientific.
• Li, Ruogu (2016). Reform of the International Monetary System and Internationalization of the Renminbi. Publisher: World Scientific.
• Kim, Kenneeth A. and Kim, Suk H. (2015). Global Corporate Finance. Publisher: World Scientific.
• Xingyun, Peng (2015). Financial Theory: Perspectives from China. Publisher: World Scientific.
• Barth, James R. and Kaufman, George G. (eds) (2015). The First Great Financial Crisis of the 21st Century. A Retrospective. Publisher: World Scientific.
• Haiquing Deng and Xi Chen (2016). Reforging the Central Bank. The Top-Level Design of the Chinese Financial System in the New Normal. Publisher: World Scientific.