Module Information
Course Delivery
Delivery Type | Delivery length / details |
---|---|
Seminar | 5 x 1 Hour Seminars |
Lecture | 11 x 2 Hour Lectures |
Assessment
Assessment Type | Assessment length / details | Proportion |
---|---|---|
Semester Exam | 3 Hours Unseen written exam | 75% |
Semester Assessment | 2000 word written essay | 25% |
Supplementary Exam | 3 Hours Unseen written exam | 100% |
Learning Outcomes
On successful completion of this module students should be able to:
* Analyse the advantages and disadvantages of different exchange rate regimes;
* Evaluate the interactions between foreign exchange instruments and the opportunities that arise from intermarket arbitrage;
* Explain the role expectations and monetary policy play in the spot and forward currency markets;
* Discuss the main approaches to exchange rate determination and use insights from these to analyse potential drivers of currency crises in emerging economies;
* Analyse the main types of currency exposures encountered by MNEs and potential strategies they can use to manage such exposures;
* Examine the instruments available to the global firm to finance its operations and consider the effects of market liquidity and segmentation on the cost of capital.
Aims
Brief description
The module provides a thorough exposure to the global financial system, notably the international monetary system, the theories and markets for foreign exchange, foreign exchange exposures and international financial arbitrage, the financing of the global firm and the determinants of foreign investment decisions.
Content
- The structure and working of the foreign exchange market
- Distinctions between spot, forward, swaps and other types of forex instruments
- Intermarket arbitrage
- The role of expectations and monetary policy in the spot and forward currency markets
- The forward market efficiency hypothesis
- Three major approaches to exchange rate determination (parity conditions, BoP and asset approaches)
- Basics of forecasting
- Measuring international economic activity using the BoP accounts
- Examine how changes in the exchange rate and its volatility influences the trade balance
- The inter-relationships between the goods, money and asset markets both under fixed and floating exchange rate regimes
- Stabilisation policy under fixed and floating exchange rate regimes
- Main currency exposures experienced by firms and the potential strategies to manage such risks
- Market liquidity, segmentation and the cost and availability of capital
- Sourcing equity globally and the characteristics of various debt instruments available to MNEs
- Foreign investment risks and their specific sources.
Module Skills
Skills Type | Skills details |
---|---|
Application of Number | Solving numerical problems in tutorials, assignment and final exam |
Communication | Seminar discussions |
Improving own Learning and Performance | Preparation of assignment, revision materials for final exam |
Information Technology | Word processing, specialist software to conduct relevant data analysis, accessing various financial and economic databases, use of Blackboard |
Personal Development and Career planning | In addition to the skills above, students are expected to acquire skills in time management, writing and analytical skills |
Problem solving | Treated in lectures and applied in seminars |
Research skills | Collecting relevant information from a variety of sources for expanding on lecture materials and for using in seminars |
Subject Specific Skills | Problem-solving, application of technical economic and financial models and data analysis |
Team work | Seminar sessions include elements of group work |
Notes
This module is at CQFW Level 7