This is an introductory course, covering a range of financial instruments, interest rate swaps, future contracts in foreign currencies, convertible currency bonds, operation of financial markets, integration and deregulation of global financial markets, the European monetary system, the role of central banks in world economies, globalization and the growth of derivatives, world trade and the currency crises. The balance of international transactions, the current and capital accounts, syndicated credit arrangements for large global projects, interest parity, hedging, and dual-currency bonds will also be covered.
Upon introduction of theory, students will be exposed to practical financial applications, and case studies. Where appropriate, EXCEL-based templates will be used as part of the application component and Canadian corporations with international operations will be used to exemplify theory.
- Introduction to the international financial systems
- WTO rules and regulations and globalization
- globalization and the growth of derivatives
- central banks and the balance of payments
- international financial policies.
- Foreign exchange markets
- the mechanics of currency trading
- settlement dates
- exchange controls
- forwards, swaps, and interest parity
- forward markets, and interest rates
- margin requirements
- futures contracts, and forward contracts
- dual currency markets
- interest parity with bid / asked spreads
- economic functions of futures markets
- foreign currency options
- options on spot exchange
- options on foreign currency futures
- Eurocurrency markets
- eurobanking and eurocurrency centres
- eurocurrency futures and options
- syndicated eurocredits
- implementation of euro
- International bond markets
- new issue procedures
- eurobond valuation and hedging
- caps, floors, and collars
- Forecasting in international financial markets
- The Asian banking systems
- currency crises
- the exchange rate mechanisms
- the IMF interventions
Methods Of Instruction
Material will be presented within a lecture format.
Means of Assessment
Minimum of 3 evaluations, none of which will exceed 40%, for a total of 100%.
At the end of the course, the successful student should be able to:
- master the basic theories of international finance;
- apply basic theories of finance into case analysis or simulated cases.
Textbooks and Materials to be Purchased by Students
Textbooks and materials will be chosen from:
- Das, D.K. International Finance: Contemporary Issues, latest ed. New York: Routledge Publishing.
- Dufey, G. and Giddy, I.H. Cases in International Finance, latest ed. New York: Addison- Wesley.
- Eun, C. and Resnick, B. International Financial Management, latest ed. McGraw Hill Irwin.
- All students are required to have a financial business calculator.