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Registration for the Fall 2019 semester begins June 25.  Watch your email for more details.

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Global Trade Finance

Course Code: BUSN 3200
Faculty: Commerce & Business Administration
Department: Business
Credits: 3.0
Semester: 15 weeks
Learning Format: Lecture, Lab, Seminar
Typically Offered: TBD. Contact Department Chair for more info.
course overview

This course presents the basic elements of international trade finance and payments. It discusses various ways to assess the risk for international trade transactions and strategies to minimize such risk. The course focuses on cash management techniques used in conjunction with international trade transactions and requires students to prepare a trade project. The course also examines methods used to estimate cash flows and formulate scenario and sensitivity analyses for a trade project. Finally, the course aims to equip students with the tools necessary to analyze and understand financial statements according to different accounting standards and to construct financing proposals based on different time horizons ranging from short to long term.

Course Content

1. Trade risks and risk assessment

  • International trade practices
  • Product risks
  • Commercial risks (purchaser risks)
  • Adverse business risks
  • Political risks
  • Currency risks
  • Financial risks

2. Methods of payment

3. Bonds, guarantees and standby letters of credit

4. Currency risk management

  • Currency risk
  • The currency markets
  • The spot trade
  • Currency exposure
  • Hedging currency risks
  • Practical currency management

5. Export credit insurance

6. Trade finance

  • Finance alternatives
  • Pre-shipment finance
  • Supplier credits
  • Refinancing of supplier credits
  • Buyer credits
  • The international money market

7. Structured trade finance

  • International leasing
  • Lines of credit and local currency finance
  • Project finance and joint venture

8. Terms of payment

9. Capital budgeting

  • Cash flows estimation and management
  • Other factors to consider: exchange rate fluctuations, inflation, financing arrangements, etc.
  • Adjusting project assessment for risk (sensitivity analysis)

10. Collections and Disputes

  • Collection procedures for international debts
  • Commercial disputes and dispute resolution options

Methods of Instruction

Lectures, discussions, case study analysis, class presentations, and guest lectures on industry-specific subjects.

Means of Assessment

1. Term Exam(s) (1+)*            

15%-45%

2. Final Exam                       

20%-30%

3. Assignments (4-8)

15%-30%

4. Project

15%-30%

5. Participation/Attendance

0%-10%

Total:

100%

* no one examination may be worth more than 40%

50% of non-exam assessments must be for individual work

Note: students must achieve a grade of at least 50% on the combined exam components to pass the course.

Learning Outcomes

At the end of the course, the successful student should be able to:

  • demonstrate understanding of the foundations of international trade and finance (transaction facilitation, risk management, financing, information sharing);
  • evaluate the purchaser-related and the country-related risks (e.g. political and economic risks), and find possible ways to minimize or avoid them;
  • evaluate the foreign-exchange risks;
  • search for alternatives to finance international trades in the proper timeframe (short-, medium- and long-terms);
  • prepare a trade project, identify its positive and negative cash flows, project the cash flow statements and evaluate the feasibility of the project from the financial perspective; and
  • analyze financial statements, prepared using different accounting standards in accordance with the regulatory body for a specific country.

course prerequisites

ACCT 1210 or ACCT 1235, and FINC 1231 (minimum of C for all courses) OR currently active in the:
PDD International Business Management AND a minimum of C Grade in CSIS 1190 or FINC 1231, or
PBD International Supply Chain Management AND a minimum of C grade in CSIS 1190 or FINC 1231.

Corequisites

Nil

Equivalencies

Nil

curriculum guidelines

Course Guidelines for previous years are viewable by selecting the version desired. If you took this course and do not see a listing for the starting semester/year of the course, consider the previous version as the applicable version.

course schedule and availability
course transferability

Below shows how this course and its credits transfer within the BC transfer system. 

A course is considered university-transferable (UT) if it transfers to at least one of the five research universities in British Columbia: University of British Columbia; University of British Columbia-Okanagan; Simon Fraser University; University of Victoria; and the University of Northern British Columbia.

For more information on transfer visit the BC Transfer Guide and BCCAT websites.

assessments

If your course prerequisites indicate that you need an assessment, please see our Assessment page for more information.