The course International Financial Management is an optional subject in the art of Financial Management, taught in the second semester of the third year of the Degree in Business Administration.

The students have previously taken two decisive courses, such as:

Business Economics: Introduction, which introduces the financial area and the operation of financial management within a company and,

Financial Management: Financing, which addresses the decisions made by corporate managers regarding sources of funds and the criteria to be used when choosing among them.

The main objective of the course International Financial Management is to understand properly the international financial management of the company. To achieve that main objective, firstly, concepts related to currency trading are explained. After that, the student will understand the determinants of the value of currencies, and the equilibrium of the markets, and finally, we come to a complete analysis of the exchange rate risk.

LEARNING PROCESS OUTCOMES

1. Negotiation of prices in the currency market.

2. Valuation of the determinants of the value of the currencies.

3. Recognition of possible imbalances in the foreign exchange market.

4. Management of the exposure to the risk of change of the company.



GENERAL COMPETENCIES/SKILLS

1. Develop learning skills to acquire a high degree of autonomy, both in order to undertake further studies, and in an own self-training in a field subject to continuous changes and innovations.

2. Written and oral fluent communication skill

3. Ability to work in a team, with responsibility and respect, initiative and leadership.

4. Ability to develop creativity, innovation and entrepreneurial spirit.



SPECIFIC COMPETENCIES/SKILLS

1. Knowledge

- Knowledge of the specific characteristics and transactions of the foreign exchange market

- Knowledge of the fundamental factors determining the exchange rate and the relationships for the determination of the spot and forward exchange rate

- Knowledge of the concept of exchange risk, its repercussions in the company and the existing methods for its measurement and coverage

2. Aptitudes

- Be able to analyze the situation of the exchange markets

- Ability to observe, detect and analyze the risk of change of a specific company or organization

3. Abilities

- Ability to understand, interpret and analyze the data provided by international sources of financial information

- Ability to determine the risk of change, analyze it and communicate clearly and comprehensibly the result of such analysis

UNIT 1. THE INTERNATIONAL FINANCIAL SYSTEM



UNIT 2. SPOT EXCHANGE MARKET



UNIT 3. SPOT EXCHANGE RATE DETERMINATION



UNIT 4. FORWARD EXCHANGE MARKET



UNIT 5. EXCHANGE RISK AND ITS MEASURE



At the beginning of the semester the students will receive (through E-Gela) a detailed schedule of the different topics. Exercises and notes will be uploaded to the web system for the students to work on them.

A mixture of teaching methodologies is scheduled due to the skills and outcomes required:



LECTURE CLASS

This is a teaching method in which there are no splits; it thus corresponds to large groups. It encompasses both theoretical and practical classes. Feedback is assured with the students to ensure the assimilation and understanding of the contents.



COMPUTER PRACTICE

It is a teaching method applicable in small groups. It can be based on case studies or be oriented toward project-based learning.



SEMINARS

This teaching method is applicable in small groups since it allows greater interaction between professors and students when solving real cases. The work will be supervised by the Professor.



CLASSROOM WORK PRACTICE

The methodology of problem-based learning will be used. To promote the student's active learning, autonomy and involvement, a structuring problem will arise: students will become traders of the currency markets through a simulation program called Metatrader and, as a result of the problems that arise; the students will work part of the content of the program. It will work both inside and outside the classroom. The work will be organized in an autonomous way both in the search for information and in the analysis of it. The teacher will supervise the work done, and will guide the possible conflicts and difficulties that may arise.

• Continuous Assessment System
• Final Assessment System
• Tools and qualification percentages:
  • Written test to be taken (%): 65
  • Oral defense (%): 5
  • Realization of Practical Work (exercises, cases or problems) (%): 5
  • Individual works (%): 10
  • Team projects (problem solving, project design)) (%): 15

The assessment system will be mixed. It comprises two parts:



• Continuous assessment (3,5 points out of 10)

The activities will combine individual and collective tasks, both in and out of the classroom. Sometimes they will be theoretical for the most part, whereas they will relate to corporate practice in other instances. Specific dates for the development of the work and the deadline for delivery will be announced at the beginning of the course (e-Gela).



Specific dates for the development of the work and the deadline for delivery will be announced at the beginning of the course (e-Gela).



• Final examination (6,5 points out of 10)

Both the theoretical knowledge (50% of 6,5 points) and the applied one (50% of 6,5 points) will be assessed.



The final grade will be a weighted average of the continuous assessment and the final exam, provided the grade of the latter surpasses 40% of its total value (6,5 points). It is also required to obtain a minimum of the 40% in both, the theoretical (3,25 points) and practical part (3,25 points) of the final examination.



Students can decline the continuous assessment and opt instead for the final exam. In this case, students must state it clearly in a formal written document and send it to the Professor during the first 9 weeks of the course. The specific procedure will be posted on the university’s e-Gela platform.



Those students that have opted for the final evaluation will be evaluated as it is detailed in the following section titled: Extraordinary exam call.



The students that do not sit for the final exam will be graded as “Not turned up” whatever the grading system that applies to them. Should there be evidence of copy in any of the before mentioned tests the student will be graded as “Failed” in that call.

Those students that having chosen the continuous assessment for the ordinary exam call, want to decline the ordinary exam call and sit the extraordinary one, must state it clearly sending a formal written document to the Professor at least 7 days before the extraordinary exam call. The specific procedure will be posted on the university’s e-Gela platform.



Those students, that having chosen the continuous assessment for the ordinary exam call, have not obtained 5 points out of 10, have the choice to keep the grade of the continuous assessment (if it fills the minimums detailed in the section above) and they will only sit for the final exam in the extraordinary exam call.



Students, who have declined the continuous assessment, will be assessed using the following system:



• Assignments (2 points out of 10)

Students will do three kinds of assignments:

a) A written report about a topic related to the subject, and its oral presentation (all of it will involve out of class work) (1,5 points out of 2)

b) A report about the use of the MetaTrader app of the student (0,5 points out of 2).



Specific dates for the development of the work and the deadline for delivery will be announced at the beginning of the course (e-Gela).



• Final examination (8 points out of 10)

Same details and minimum percentages in both theoretical and practical parts as in the continuous assessment are required.



The students that do not sit for the final exam will be graded as “Not turned up” whatever the assessment system that applies to them. Should there be evidence of copy in any of the before mentioned tests the student will be graded “Failed” in that call.

Materials (Students ‘book and Practice book, each one with its own bibliography) available at e-Gela at the beginning of the semester.

Basic bibliography

GONZÁLEZ, S. (2000): International currency market and the Exchange market. Pirámide.

LEVI, M.D. (2000): International Finance. McGrawHill.

LEVI, M.D. (1990): International Finance: The markets and international management of multinational business. McGrawHill.

KANE, D.R. (1991): Principles of International Finance. Croom Helm.

KRUGMAN, P. R. (2012): International Economy: "Theory and Policy". Pearson Education.

SARNAT, M. & SZEGO, G.P.(1979): International Finance and Trade. Volume one. Ballinger Publishing Company

SARNAT, M. & SZEGO, G.P.(1979): International Finance and Trade. Volume two. Ballinger Publishing Company

In-depth bibliography

DE LEON, J., RAMOS, R.A. & DORTA, J.A.(2012): Financial and Accountancy concepts. Pirámide.
GOSTINEAU, G.L. & KRITZMAN, M.P. (1997) Dictionary of Risk Management. Frank J. Fabozzi Associates.
MOLES, P. & TERRY, N. (1997): the Handbook of International Financial Terms. Oxford University Press.
NOGALES, I. (2016): FOREX "Investing Strategies". Ra-Ma
RODRÍGUEZ, M.A. (2011): An approach of the exchange market for the investors.
BRUN, X.; ELVIRA, O. & PUIG, X. (2008): Equity and Exchange markets. Profit.
COSTA, L. & FONT, M. (2003): Currencies in the international business strategy. Icex.
REUTERS (2004): Currencies and Exchange rates course. Ediciones Deusto.
SHAPIRO, AC. (2006): Multinational financial management. John Wiley&Sons.

Journals

Management Portfolios
Forecasting the Financial System
Finance and Development
Financial Strategy
Report on the worldwide financial stability
Forecasting the Worldwide Economy

Web addresses

http://www.forexpros.es
http://www.xtb.es
http://www.euroforex.es/
http://www.finanzas.com/divisas
http://es.exchange-rates.org
www.planetaforex.com
https://www.forex.com/en-uk/
http://www.fxstreet.com
https://www.bde.es/bde/en/
https://www.ecb.europa.eu/ecb/html/index.en.html
https://www.cnmv.es/portal/home.aspx?lang=en