INTERNATIONAL FINANCIAL MANAGEMENT

FIN5IFM

2018

Credit points: 15

Subject outline

In this subject, you will develop an understanding of the structure and operation of the international financial system, including an understanding of  the process via which exchange rates are derived. You will also develop a thorough knowledge and understanding of  the logic and relevance of the four major international parity conditions: Purchasing Power Parity; Interest Rate Parity; International Fisher Effect; and Foreign Exchange Expectation. Based on the theoretical foundation and empirical evidence, you will evaluate the relative merits and the risks associated with financing and investment decisions in a global economic setting.

SchoolLa Trobe Business School

Credit points15

Subject Co-ordinatorTu Nguyen

Available to Study Abroad StudentsYes

Subject year levelYear Level 5 - Masters

Exchange StudentsYes

Subject particulars

Subject rules

PrerequisitesN/A

Co-requisitesN/A

Incompatible subjectsN/A

Equivalent subjectsN/A

Special conditionsN/A

Readings

Resource TypeTitleResource RequirementAuthor and YearPublisher
ReadingsGlobal investments, 6th editionPrescribedSolnik B., & D.McLeaveyPEARSON - PRENTICE HALL, 6TH EDITION

Graduate capabilities & intended learning outcomes

01. Analyze currency exchange rates

Activities:
Topic 1: Currency Exchange Rates (lecture and tutorial) and Assessment components
Related graduate capabilities and elements:
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

02. Discuss foreign exchange fundamentals; in particular the balance of payments, exchange rate regimes, and international parity relations and their implications. Discuss exchange rate determination theories and their potential implications.

Activities:
Topic 2: Foreign Exchange Parity Relation (lecture and tutorial) and Assessment components
Related graduate capabilities and elements:
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

03. Discuss the evolution of international monetary arrangements, the empirical evidence on the various parity conditions, and the analysis of exchange rate forecasting and its use and performance.

Activities:
Topic 3: Foreign Exchange Rate Determination and Forecasting (lecture and tutorial) and Assessment components
Related graduate capabilities and elements:
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

04. Explain and discuss the international asset pricing model (ICAPM), in particular, discuss the relation between exchange rates and asset prices.

Activities:
Topic 4: International Asset Pricing (lecture and tutorial) and Assessment components
Related graduate capabilities and elements:
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

05. Evaluate the implications of international diversification and discuss risk and return in international investment.

Activities:
Topic 5: Equity: Concepts and Techniques (lecture and tutorial) and Assessment components; Topic 6: Global Bond Investing (lecture and tutorial) and Assessment components; Topic 7: Alternative Investments (lecture and tutorial) and Assessment components; Topic 8: The Case for International Diversification (lecture and tutorial) and Assessment components
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Speaking)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

06. Discuss the management of foreign exchange risk.

Activities:
Topic 9: Currency Risk Management (lecture and tutorial) and Assessment components
Related graduate capabilities and elements:
Literacies and Communication Skills (Writing,Speaking)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Inquiry and Analytical Skills (Critical Thinking,Creative Problem-solving,Inquiry/Research)
Discipline -Specific Knowledge and Skills (Discipline-Specific Knowledge and Skills)

Subject options

Select to view your study options…

Start date between: and    Key dates

Melbourne, 2018, Semester 1, Day

Overview

Online enrolmentYes

Maximum enrolment sizeN/A

Enrolment information

Subject Instance Co-ordinatorTu Nguyen

Class requirements

Tutorial Week: 11 - 22
One 1.0 hours tutorial per week on weekdays during the day from week 11 to week 22 and delivered via face-to-face.

Lecture Week: 10 - 22
One 2.0 hours lecture per week on weekdays during the day from week 10 to week 22 and delivered via face-to-face.

Assessments

Assessment elementComments% ILO*
One Group Case Study (500 words per student)10 01, 05, 06
1-hour mid-semester exam25 01, 02, 03, 04
one 3-hour final examinationHurdle requirement: Students must achieve at least 50% in the final examination as well as a minimum of 50% in the sum of the marks for all assessment tasks to pass the subject50 01, 02, 03, 04, 05, 06
tutorial homework and group presentationEquivalent to 1000 words per student15 01, 02, 03, 04, 05, 06

Vietnam, 2018, Week 35-39, Day

Overview

Online enrolmentYes

Maximum enrolment sizeN/A

Enrolment information

Subject Instance Co-ordinatorTu Nguyen

Class requirements

Tutorial Week: 35 - 39
One 1.0 hours tutorial other recurrence on any day including weekend during the day from week 35 to week 39 and delivered via face-to-face.
"block mode delivery"

Lecture Week: 35 - 39
One 2.0 hours lecture other recurrence on any day including weekend during the day from week 35 to week 39 and delivered via face-to-face.
"block mode delivery"

Assessments

Assessment elementComments% ILO*
One Group Case Study (500 words per student)10 01, 05, 06
1-hour mid-semester exam25 01, 02, 03, 04
one 3-hour final examinationHurdle requirement: Students must achieve at least 50% in the final examination as well as a minimum of 50% in the sum of the marks for all assessment tasks to pass the subject50 01, 02, 03, 04, 05, 06
tutorial homework and group presentationEquivalent to 1000 words per student15 01, 02, 03, 04, 05, 06