International Financial Management

Discipline: Semester at Sea Seminars
Instructor: Noorbakhsh
Credits: 3
Day: A
Start: 1300
End: 1415
Field Work: Day 1 - Friday, 07 November | Brazil Download Syllabus

In the process of leading their firms, managers of Multinational Enterprises (MNE) face an additional important element of risk which is caused by unpredicted fluctuations in exchange rates of the currencies of those host countries where they have business operations. This foreign exchange risk can adversely affect the firm’s short-term and long-term cash inflows and outflows and ultimately undermines its valuation in financial markets. To study the complexity of managing foreign exchange rate risk, this course first looks at major markets that serve the international business, describes the relationships between exchange rates and economic variables that influence those rates, examines the effectiveness of exchange rate forecasting, and then focuses on how to measure and then hedge against different exchange rate risk exposures by using financial derivatives such as forward contracts, futures, and options. Finally, it studies selected issues regarding foreign direct investment (FDI) and political risk as they relate to the value of the firm. Students, as they travel, will receive field assignments with the objective of incorporating real life situations into conceptual classroom discussions.

Field Work

Country: Brazil
Day: 1 - Friday, 07 November

Students will visit the U.S. Consulate in Rio de Janeiro where they will hear presentations relating to the Macroeconomic Environment and the Commercial and Business Environment in Brazil. In the afternoon we will visit the Brazilian Development Bank (BNDES), the main financing agent for development in Brazil. Academic Objectives: The objective is for the class is to get an overall understanding of the general macroeconomic environment as well as the commercial and financial environment in Brazil. This makes it possible for the students to apply some of the concepts they learn in the course to specific conditions which they learn about in Brazil.