This module aims to teach students foreign exchange markets, international financial markets, the issues that companies face when they operate globally and the strategies that they use to enhance returns, and reduce risks, in their global operations. The module is divided into two parts. The first part deals with foreign exchange rate quotations, how to perform a range of transactions in foreign exchange markets, foreign exchange rate theories, application(s) of the theories and techniques for hedging transaction, operating (or economic) and translation (or accounting) exposures to currency risk. In the other part of the module, attention is focussed on international aspects of taxation, evaluation of foreign direct investment (FDI) opportunities, structure of international financial markets, strategies for reducing cost(s), and risks, when raising capital from the markets.
Learning Outcomes
By the end of the module students should be able to:
Explain a range of transactions on foreign exchange markets;
Critically evaluate theories of foreign exchange rates and apply the theories to predict exchange rates;
Critically assess the international aspects of taxation of the operations of a multinational company;
Comprehensively assess the strengths and weaknesses of a range of techniques and strategies that are often used to reduce foreign exchange risk exposures; and
Determine the advantages and disadvantages to a multinational company of using each of the various types of debt and/or equity available on international financial markets.
