International Finance

This one semester course consists of 45 hours of contact with the teacher (3 hours per week) and 88 hours of
autonomous work (total: 133 hours). The course is credited with 5 ECTS.
The course is structured in three parts. First, the theoretical foundations of each topic are presented. Second,
the students solve case studies to apply the theoretical background. Third, the students need to work on a
group assignment with oral presentation about one of the topics discussed in classes.

To be able to interpret the international financial and economic phenomena which affect the activity of firms;
Analyse and use international parity conditions;
Use financial instruments to hedge transaction exposure;
Analyse and evaluate the economic exposure of firms to currency fluctuations;
Analyse and evaluate the accounting exposure of firms to currency fluctuations;
Analyse and evaluate foreign investment decisions;
Analyse and evaluate foreign currency financing;
 Determine the value of some real options in foreign investment decisions.

I – International Monetary System
1. Introduction to the exchange rate market.
2. Balance of payments.
3. Parity conditions.
II – Exchange Rate Risk Management
1. Types of exposure: Transaction, economic and accounting.
2. Hedging instruments: monetary market, forwards, futures, options and swaps.
III – Foreign Direct Investment
1. Determinants and theories.
2. Political risk.
3. Valuation.
4. NPV, APV and cost of capital.
5. Taxation.
6. Coordination and control.
7. Real options.
IV – Financing in foreign currency
1. Financing in international financial markets.
2. Financing of MNEs.
3. Financing of imports and exports.

NAO

Eiteman, D. K., Moffett, M. H. e Stonehill, A. I. (2011). Fundamentals of Multinational Finance, 4th edition.
Prentice Hall.
Levi, M. D. (2009). International Finance. Taylor & Francis.
Sercu, P. (2009). International Finance: Theory into Practice. Princeton University Press.
Shapiro, A. C. (2009). Multinational Financial Management, 9th edition. John Wiley & Sons.