THE UNIVERSITY OF THE WEST INDIES

ST. AUGUSTINE
DEPARTMENT OF MANAGEMENT STUDIES

MGMT 3053 International Financial Management

SEMESTER I – 2022/23
 
Lecturer: Mr Prakash Ramlakhan
Lecture Hours: Wednesdays 4:00pm – 6:00pm
Venue: Zoom
Office Hours: appointment
Email: prakash.ramlakhan@sta.uwi.edu
PRE-REQUISITES: Financial Management 1, Money and Capital Markets

COURSE DESCRIPTION

International Finance is an in-depth study of financial analysis of firms, individuals,

governments and international institutions such as International Monetary Fund (IMF),
International Bank for Reconstruction and Development (World Bank), World Trade
Organization (WTO) in the arena of foreign exchange markets and national money
markets. We examine the currency market, investment designs, risks and returns,
containment or elimination of different types of risk, stability of foreign exchange, issues
with balance of payments, international institutional frameworks, national government's
policy menu, IMF/World Bank/WTO' s policies in the globalization processes. Some
historical perspectives will also be studied, and thus a micro framework and macro
structure of market analysis will be presented in this course.

COURSE OBJECTIVES

To provide students with a working knowledge of foreign exchange exposure,

international investments, parity relations, capital budgeting for the global investor and
risk management. The focus shall be on the international investor. Students should obtain
a practical approach to international financial markets and be able to identify strategies
for growth and profitability. Cryptocurrency and financial technology shall also be
discussed to familiarize students with the current trends in the global payment system.

On completion of this course, students should:

Become familiar with foreign exchange markets and exchange rate determination.

Distinguish among international financial products and services – characteristics,

risk/return profile

Compare and contrast the procedures involved in effecting financial transactions

in different variant of the financial market
 Evaluate financial performance and risk exposure of the MNC.

Recommend strategies to manage currency risks.

TEACHING LEARNING AND QUALITY ASSURANCE

Approaches to teaching:

 lectures
 active student participation
 case studies
 participation at seminars
 guest lectures

PRE-REQUISITES: MGMT 2023 - Financial Management 1; MGMT 2024- Money

and Capital Markets.

CO-REQUISITES: None

STUDENT ASSESSMENT

(i) COURSE WORK – 40%

(ii) Final Examination 60%

REQUIRED TEXT

Multinational Financial Management- Eight Edition Alan C. Shapiro, John Wiley & Sons
Inc.
or
Fundamentals of Multinational Finance – fourth edition Moffett, Stonehill and Eiteman.
Pearson.

Recommended Readings:
International Financial Management – Geert Bekaert and Robert J. Hodrick Prentice Hall
2009.
Business News

COURSE STRUCTURE

This course is divided into three major sections:

A. Overview of the Currency markets :

This section introduces the participants to foreign exchange markets and rate
determination .

B. International Capital markets, corporate finance:

This section deals with international financial products and services. Students
would be exposed to country risk assessment, capital budgeting and international
portfolio management.

C. Risk management, transaction and economic exposures:

The section shall focus on address risk management strategies cryptocurrencies

and financial technology.

Class meetings

Lectures: There will be three (3) hours of lectures/tutorials each week. Students are
required to read the assigned material prior to each class session. All class discussions are
premised on your adherence to the curriculum including the assigned readings and
assignments. You are expected to participate in class discussions and all contributions
should be relevant and focused. If you do not understand what is being taught, please ask
questions during the session or meet with the lecturer during the office hours.

Please be advised that this course cannot be digested two or three weeks before
examination. You must keep abreast with the assigned readings, class discussions, all
assigned problems and current developments in the local and international financial
markets to understand the course. You are encouraged study other books and articles to
relevant to the course.

TOPICS
1. An overview of International Finance and Markets for currencies; major
participants: government policy makers, exporting firms, importing firms,
multinational corporations, Individual investors (arbitragers, hedgers, and
speculators) Ch 1, 2

2. The foreign exchange market: structure and functions; conventions and

quotations; Spot and forward contracts; triangular arbitrage; currency futures;
contrast between forward and futures contracts. Ch 3,7

3. The International Monetary System: historical sketch and new developments;

CH 3

4. Determination of the exchange rate: different approaches CH 2,

5. Parity conditions: interest rate parity, purchasing power parity, Fisher open parity,
forward future spot rate parity: implications and importance of these parity
statements; CH 4

6. International debt and equity markets CH 12,15

7. Country risk assessment CH 6

8. Foreign Exchange Risk: measurement and management: translation and

transaction risk exposure, economic risk exposure, and political risk exposure; CH
10, 11

9. Currency risk management using forwards,futures and swaps. CH 8,9

10. Capital Budgeting for Multinational Corporation CH 17

11. Cryptocurrency and fintech

12. Climate change. Global trade and Finance