WEEK | TOPICS & SUB-TOPICS | OBJECTIVES | HOURS | M.O.D | TA | NOTES |
1 | 1.0 Introduction - Globalisation
- Theories of international trade and industry location
- MNCs, foreign direct investment strategy, and globalisation
- Special risks faced by MNCs
- Corporate governance of MNCs
- International financial management issues
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- To explain globalisation
- To explain the relevant theories of international trade and industrial location
- To explain MNCs’ foreign direct investment strategy and their impact on globalisation
- To describe the risks faced by MNCs
- To explain the importance of MNC corporate governance
- To explain the issues in international financial management
| 3
| Lecture Discussion Q/A
| Powerpoint Internet OHP LCD | Chapter 1
Chapter 21 (pp. 527-528) |
2 | 2.0 International Financial Markets
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- To describe features of the foreign exchange market
| 3
| Lecture Discussion Q/A
| Powerpoint Internet OHP LCD | Chapter 4
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3 | - International money markets
- International debt markets
- Global equity markets
3.0 Currency Systems and Valuation - A brief history of monetary regimes
- Contemporary currency systems
- Currency valuation basics
| - To describe features of the international money markets
- To describe features of the international debt markets
- To describe the features of the global equity markets
- To describe briefly the history of monetary regimes
- To describe the current currency regimes
- To explain the determination of a currency’s value
| 1.5
1.5
| Lecture Discussion Q/A
| Powerpoint Internet OHP LCD | Chapter 7 (pp. 206-213) Chapter 8 (pp. 236-239) Chapter 9 (pp. 264-272)
Chapter 2
Project details to be given
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4 | - Factors affecting currency values
- How governments intervene in the currency markets
- Currency crises in emerging markets
4.0 Currency Parity Conditions - Basic arbitrage in currency markets
| - To explain the influence of factors on currency value
- To describe the ways a government intervenes in the currency market
- To explain the causes, impacts, and responses to the currency crises
- To solve currency arbitrage problems
| 1.5
1.5 | Lecture Discussion Q/A Exercises | Powerpoint Internet OHP LCD |
Chapter 5 |
5 | - Money markets and currency markets
| - To solve covered interest arbitrage problems and interest rate parity
| 3
| Lecture Discussion Q/A
| Powerpoint OHP LCD |
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6 | - Product markets and currency markets
- International Fisher effect: real rates of return and inflation
5.0 Currency and Eurocurrency Derivatives - What are derivatives?
- Currency forwards
| - To explain purchasing power parity and its implication on exchange rates
- To explain the international Fisher effect and its implication on exchange rates
- To describe the basic features of derivatives
- To explain the features of currency forwards
| 1.5
1.5 | Lecture Discussion Q/A
| Powerpoint OHP LCD |
Chapter 6 |
7 |
| - To explain the features of currency futures
- To compute profit from the currency option speculation & explain factors influence on option pricing
| 3
| Lecture Discussion Q/A
| Powerpoint OHP LCD |
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8 | 6.0 Currency Risk Exposure Measurement - Variation in foreign exchange
- Transaction exposure
- Economic and operating exposure
| - To measure the variation in exchange rates
- To explain transaction exposure measurement
- To explain estimating economic or operating exposure
| 3
| Lecture Discussion Q/A
| Powerpoint OHP LCD | Chapter 12 Chapter 13 Chapter 14 (pp. 389-390, 395, 399-402)
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9 | - Translation exposure
- Firm type and nature of currency exposure
7.0 Currency Exposure Management - Why manage currency risk?
- Actual hedging behaviour by firms
| - To explain translation exposure
- To describe the empirical evidence on currency exposure
- To explain the arguments for managing currency risk
- To describe actual corporate hedging
| 1.5
1.5
| Lecture Discussion Q/A Exercises | Powerpoint OHP LCD | MID-SEMESTER TEST:
Tuesday, 12/11/2013, 5:00pm–6:00pm |
10 | - Hedging techniques
- Operating decisions to mitigate transaction exposure
- Operating decisions to mitigate operating exposure
| - To solve hedging problems
- To explain operating decisions to reduce transaction exposure
- To explain operating decisions to reduce operating exposure
| 3
| Lecture Discussion Q/A Exercises
| Powerpoint OHP LCD
|
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11 | 8.0 Capital Budgeting - The MNC capital budgeting process
- Competitive advantage offered by international projects
- Types of overseas projects
- Overview of international capital budgeting
- Net present value of an international project
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- To describe MNC’s capital budgeting process
- To explain the benefits from international projects
- To describe the types of overseas projects
- To describe the key features of international capital budgeting
- To compute the NPV of an international project
| 3
| Lecture Discussion Q/A
| Powerpoint OHP LCD
| Chapter 17
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12 |
9.0 Long-Term Financing - Financing MNCs’ activities
- MNC debt financing
- MNC equity financing
- Cost of capital and optimal financing
| - To describe integrating currency risk in the analysis
- To describe incorporating country risk in the analysis
- To explain financing advantages and constraints of MNCs
- To describe the debt financing available for MNCs
- To describe the equity financing available for MNCs
- To estimate MNCs’ optimal financing
| 1.5
1.5
| Lecture Discussion Q/A Exercises | Powerpoint
| 1/12/2013DEADLINE for submission of project report
Chapter 16 |
13 | - Strategic issues in financing MNCs
- The use of derivatives in financing activities
- How foreign MNCs use US equity markets
10.0 Optimising and Financing Working Capital- Overview of working capital issues
- Cash management
- Receivables
- Bank financing
| - To describe the strategic issues in MNC financing
- To explain use of derivatives in financing
- To explain how foreign MNCs use US equity markets
- To describe the broad issues in MNC working capital management
- To describe the issues in MNC cash management
- To describe the issues in MNC receivables management
- To describe the types of bank financing available for MNCs
| 1.5
1.5
| Lecture Discussion Q/A Exercises | Powerpoint OHP LCD |
Chapter 18 |
14 | - Market financing
- Financing strategies to minimise cost
11.0 International Trade - Import and export: shipment and payment
- Import and export financing
| - To describe the types of market financing available for MNCs
- To explain the financing strategies to minimise cost
- To describe issues and strategies in shipment and payment
- To describe the financing strategies of export and import
| 1.5
1.5
| Lecture Discussion Q/A Exercises | Powerpoint OHP LCD |
Chapter 19 (pp. 493-496)
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