International Finance Course

Lesson 1 • Key Parity Conditions

Derives purchasing power parity, interest rate parity, and the Fisher effect from first principles. These conditions underpin exchange rate forecasting covered in later chapters.

Lesson 2 • International Monetary Regimes

Surveys fixed, floating, and managed exchange rate systems and their policy implications. Helps students assess how regime choice affects corporate and investment decisions.

Lesson 3 • Exchange Rate Basics

Introduces spot and forward exchange rates and the mechanics of currency quotation. Provides the foundation for all subsequent currency risk topics.

Lesson 4 • The Global Financial System Overview

Maps the architecture of global finance, including key institutions and market participants. Establishes the baseline vocabulary used throughout the course.

Lesson 1 • Structure of the Forex Market

Describes the decentralised, OTC nature of the forex market and its major trading centres. Contextualises market size, liquidity, and operating hours.

Lesson 2 • Spot Market Transactions

Covers the execution, settlement, and pricing of spot currency transactions. Builds practical skills for immediate currency conversion needs.

Lesson 3 • Currency Futures and Exchange-Traded Products

Introduces standardised currency futures contracts and their role alongside OTC instruments. Highlights margin requirements, marking to market, and basis risk.

Lesson 4 • Forward Contracts and Outright Forwards

Explains how forward exchange rates are derived and how outright forward contracts lock in future rates. Introduces the concept of forward premium and discount.

Lesson 1 • Forecasting in Practice

Bridges theory and application by examining how firms and investors use forecasts in decision-making. Addresses forecast limitations and scenario-based planning.

Lesson 2 • Fundamental Approaches to Rate Determination

Reviews purchasing power parity, balance of payments, and asset market models as explanatory frameworks. Establishes which factors drive long-run exchange rate levels.

Lesson 3 • Quantitative Forecasting Methods

Covers econometric and time-series approaches to exchange rate forecasting. Students learn to assess model accuracy and forecast uncertainty.

Lesson 4 • Technical Analysis in Forex

Introduces chart-based and indicator-driven methods used by forex practitioners. Provides tools that complement fundamental analysis in short-term forecasting.

Lesson 1 • Exposure Reporting and Governance

Covers how firms aggregate, report, and govern currency exposures across business units. Links measurement to the hedging policy frameworks introduced in the next chapter.

Lesson 2 • Economic and Operating Exposure

Addresses the long-run impact of exchange rate changes on a firm's competitive position and cash flows. Distinguishes economic exposure from the other two forms.

Lesson 3 • Translation Exposure

Explains how consolidating foreign subsidiary financials creates accounting-based currency risk. Covers the major translation methods and their balance sheet impact.

Lesson 4 • Value-at-Risk for Currency Portfolios

Applies the Value-at-Risk framework to quantify potential currency losses at a given confidence level. Introduces parametric, historical, and Monte Carlo VaR methods.

Lesson 1 • Forward and Futures Hedging

Applies forward contracts and futures to hedge transaction exposure in practical scenarios. Evaluates hedge effectiveness and residual basis risk.

Lesson 2 • Hedging Economic Exposure Operationally

Addresses long-run currency risk through supply chain, pricing, and production flexibility strategies. Complements financial hedging with structural business responses.

Lesson 3 • Money Market and Balance Sheet Hedges

Demonstrates how borrowing and lending in foreign currency can replicate forward hedge outcomes. Connects to translation exposure management through balance sheet matching.

Lesson 4 • Hedging Policy and Strategy Design

Establishes the principles for building a corporate hedging policy, including objectives and risk tolerance. Frames the trade-off between hedging cost and risk reduction.

Lesson 1 • Adapting NPV for Cross-Border Projects

Extends the net present value framework to account for foreign currency cash flows and repatriation. Highlights differences between parent and subsidiary perspectives.

Lesson 2 • Political and Country Risk Assessment

Identifies political, regulatory, and sovereign risks that affect foreign investment returns. Provides quantitative and qualitative tools for country risk scoring.

Lesson 3 • Foreign Direct Investment Decision Framework

Integrates all prior tools into a structured FDI evaluation process. Covers greenfield vs. acquisition choices and post-investment performance monitoring.

Lesson 4 • Cost of Capital in International Markets

Derives the cost of equity and debt for multinational firms operating across multiple markets. Addresses how market segmentation and country risk affect required returns.

Lesson 1 • Short-Term International Financing

Covers trade finance instruments and short-term borrowing options available to international firms. Connects working capital management to currency and credit risk.

Lesson 2 • Capital Structure for Multinational Firms

Applies capital structure theory to firms operating across multiple tax and regulatory environments. Addresses how local financing can reduce political and currency risk.

Lesson 3 • Global Equity Markets and Cross-Listing

Examines how firms raise equity capital internationally through cross-listing and depositary receipts. Analyses the cost-of-capital and liquidity benefits of global equity access.

Lesson 4 • International Debt Markets

Covers Eurobond, foreign bond, and syndicated loan markets as sources of international debt. Explains pricing, covenants, and currency denomination choices.

Lesson 1 • Benefits of International Diversification

Quantifies the risk reduction achievable by investing across markets with low return correlations. Examines how globalisation has affected diversification benefits over time.

Lesson 2 • Emerging Market Investment Considerations

Addresses the unique risks and return drivers of investing in emerging and frontier markets. Covers liquidity constraints, governance risks, and market access barriers.

Lesson 3 • Performance Measurement for Global Portfolios

Applies risk-adjusted performance metrics to international portfolios with currency effects. Covers benchmark selection and attribution analysis across markets.

Lesson 4 • Currency Risk in International Portfolios

Decomposes international portfolio returns into local asset returns and currency returns. Evaluates whether currency risk should be hedged at the portfolio level.