• Function and structure of the foreign exchange (FX) market
• Spot and forward FX market
• International parity relationships (interest rate parity, purchasing power parity, Fisher effects)
• Exchange rate determination
• Futures contacts and currency futures relationships
• Currency options markets
• International portfolio investment
• International correlation structure and risk diversification
• Optimal international portfolio selection & exchange rate effects
• Sharpe Ratio; Beta
• International capital structure and the cost of capital (CAPM in international context)
• Segmented vs. integrated markets
• International capital budgeting
• Adjusted Present Value Model (APV)
• Capital budgeting analysis

The students develop an understanding of the fundamental concepts in international finance and financial management (IFM). Concepts covered include the foreign exchange market, including its organization and operation, international parity relationships, as well as the spot, forward, and future markets for foreign exchange market. Additionally, international capital structures and capital budgeting in international terms will be discussed. At the end of the course, the student is able to convert the different currencies, decide on international investments and account for the time value of money.

According to the examination regulations, full student attendance is required for a PI. Students are committed to attend all attendance classes in order to pass the course. No information about the absence is necessary. If there is an absence in more than one lecture, a positive completion of the course is not possible.

Learning outcomes are achieved through an interactive lectures, classroom discussions, individual assignments, a case study or group assignment with a presentation, and a final exam focusing on applying key knowledge acquired throughout the semester.

Exercises 20%

Assignments 40% 

Final Exam 40%

Individual components map to grades as follows:

Basic knowledge of macroeconomics (i.e., market imperfections, economies of scale, etc.) and finance (i.e., time value of money, capital budgeting).

It is strongly recommended that student's familiarize themselves with at least the first 3 chapters of the recommended book; this material will be provided to you before the start of the course on LEARN.