Course Description

Course Name

International Finance

Session: VSVF1221

Status: Closed

Hours & Credits

45

Prerequisites & Language Level

Taught In English

  • There is no language prerequisite for courses at this language level.

Overview

Prerequisite: open to all language levels; taught in English.

Students: foreign students from the academic program ISA

Contact hours: 45


I. Course Description:
The scope and content of international finance have been fast evolving due to deregulation of financial markets, product innovations, and technological advancements. As capital markets of the world are becoming more integrated, a solid understanding of international finance has become essential for astute corporate decision making. The reflection and growth in importance of international finance as a discipline can be seen in the sharp increase in the demand for experts in this area, both in the corporate and academic spheres.

This course provides students with the tools and methods to study, analyze and understand international economic issues and problems. Considering that any subject is better learned if one first is well grounded in the basics, including theoretical context and historical case studies. 
Consequently, we initially devote several chapters to the fundamental concepts of international finance. After these are understood, the remaining material flows easily from them. The course will then focus on more advanced topics, including their relationship with the fundamentals. By doing this, we believe students will be given a framework for analysis that will serve them well when they need to apply this material in their future careers. 

The course never loses sight that it is teaching students how to make managerial decisions including a critical analyse in the age of pandemic and recovery process. Therefore the course is founded in the belief that the fundamental job of the financial manager is to maximize shareholder wealth. 

The course will be taught in a seminar style, with a combination of lecture and discussion. We will also have movies and/or documentaries to supplement the readings. Students are expected to actively follow international business affairs by reading international prestigious media like: BBC (www.bbc.com). Der Spìegel (www.spiegel.de) (English edition). 


II. Learning Outcomes:

- Evaluate empirical evidence of market performance and contrast it with theories of market performance. 
- Research, monitor and analyze specific problems or issues related to financial markets and institutions. 
- Develop financial-based perspective when analyzing risks, costs and decision making, in order to solve problems.
- Explore the global integration of international financial markets and analyze the implications for financial managers.
- Determine and analyze the appropriate measures of risk and return for various financial instruments and understand the mechanics and regulation of financial intermediaries and securities exchanges


III. Course contents (order of content may be modified):

Unit 1: General overview of money and its place in our lives
•    Introducing money and the financial system
•    Key components of the financial system
o    Financial assets
o    Financial intermediaries
o    The financial regulators
•    The financial crisis of 2007-2009
•    Covid19 pandemic: financial stability implications and policy measures taken
Unit 2: Money and the payments systems
•    Do we need money?
•    Types of money
•    Key functions of money
•    The role of banks
•    Creation of money
•    Money transactions: from gold pellets to E cash

Unit 3: Money supply
•    Monetary aggregates
•    Money supply control
•    Instruments of monetary policy
•    The quantity theory of money

Unit 4: Interests rates and rates of return
•    The interest rate, present value and future value
•    Debt instruments
•    Bond prices and  yield to maturity
•    Interest rates and rate of returns on debt instrument investments
•    Nominal vs real interest rates

Unit 5: The stock market
•    Stocks and the stock market
•    Types of stock
•    Stock trading
•    Stock price determination
o    Short term pricing
o    Long term pricing, the Gordon growth model
o    Rational expectations and efficient markets

Unit 6: Derivatives and the derivatives markets
•    Derivatives, hedging and speculation
•    Forward contracts
•    Futures contracts
•    Reading financial futures listing
•    Options
•    Swaps

Unit 7: The market for foreign exchange
•    Forex main players
•    Exchange rates and trade
•    Currency trading
•    Forex market operations
o    Reading forex quotations
o    Forex cross rates
o    Triangular arbitrage

Unit 8: The European monetary system
•    The making of a currency
•    Convergence criteria
•    European union monetary policy and stability pact
•    The ECB’s response to the COVID-19 pandemic

Unit 9: The shadow banking system
•    Investment banks
•    Mutual funds
•    Hedge Funds
o    Hedge funds strategy 
•    Pension funds
•    Finance companies
o    Insurance companies
o    Consumer finance

Unit 10: The international monetary system
•    Bimetallism
•    The classical gold standard
•    Inter war period
•    The Bretton Woods system
•    Floating system

Unit 11: Financial crisis
•    Causes
•    Effects on real economy
•    Solutions


IV. Course Material:
E-learning platform: Money, Banking and the Financial System, plus MyEconLab with Pearson eText, International Edition, 2/E.

The online learning platform is a mandatory tool to pass this course.
Text book, homework, assignment, tasks are in the platform.
The individual performance appraisal will be carried out through the work every student does in the platform. 

Very important notice: The code is personal and not transferable, once you purchase the code this cannot be neither returned, nor refunded. Unless you are 100% sure you are going to take the Comparative Economics class do not buy it. In case of any doubt contact your host Academic Coordinator.

Please note that Administration Department at ISA Study Center can not take payments by card. 

Students are expected to bring a non-programmable calculator. 


V.I. How to succeed in this course
To successfully complete this course, attendance is essential as enables the necessary participation. Both spontaneous and prepared interaction are categories used in the evaluation.
Due to the variety of topics covered in this course, come prepared. Listening to lectures, watching videos and participating in class activities and discussions is much more effective than reading someone else’s notes or watching a video later. Remember that active and meaningful participation is taken into account as part of the evaluation. Reading prior to the class sessions is essential to keep track of the course due to all the material that will be covered and the pace. 
Becoming an active learner is one of the best ways to finish successfully this course: come always prepared to class: use the syllabus to be aware about will be covered or due in class, do all assignments before class, review before the class and be organized.


VI. Grading scale
Final grades will be calculated according to the following scale:

Matrícula de Honor = 10
Sobresaliente = 9 – 9,9
Notable = 7 – 8,9 
Aprobado = 5 – 6,9
Suspenso = 0 – 4,9
No presentado = Student attended class but did not complete the exams
No asistencia = Student exceeded the maximum number of allowed absences

Please find as a reference the following grading scale conversion. However, it is ultimately the responsibility of the student’s home university or institution to determine the final grade equivalencies. 
Matrícula de Honor = A+                                      
Sobresaliente = A                                                    
Notable = B                                                             
Aprobado =C  
Suspenso = F
No presentado = Incomplete (attended classes but did not take the final exam)            
No Asistencia = Incomplete (enrolled in the course but did not attend class)

Grade dispute: 
The deadline for claiming grades is 30 days from the receipt of the certificate at the university of origin.


VII. Course policies

VII.I. Attendance
Class attendance is mandatory and is taken every class day and reflected in the course attendance sheet. 
An 85% attendance rate is required for the successful completion of the course. Perfect attendance will be taken positively into account in the participation section. 
If a student exceeds this limit, 1 point will be taken off of the final grade (Spanish grade). Reaching a 20% of unexcused absences means that the transcript for this subject will show “not attended course”. 
Excused absences: Medical Certificates that will be considered only if issued by a physician (not notes from the family explaining the student’s absence). The certificates must include the exact dates for which a student should be excused for having missed classes. Courses cannot be audited, so attendance is possible only for students enrolled in a specific class. 
Punctuality: Students are expected to arrive on time to class and to return directly to class after class breaks. Arriving 10 minutes late (or more) and/or early class departures are considered unexcused absences and will be taken into account as half an absence. 
 
Attending class is not only the presence in the classroom. The professor will encourage active participation in the course and it will be taken into account as part of the evaluation.  

Auditors: Courses cannot be taken as auditors, thus attendance is possible only for students enrolled in a specific class.

VII.II. Conduct in class
Students who actively participate in classroom activities and who maintain a professional and respectful attitude will be evaluated positively. Students must not eat or use laptops during the class (unless specifically authorized by the teacher).  

VII.III. Late work 
One half point will be taken off (from the learning activities grade) for homework that is submitted late repeatedly. Late assignments will be corrected but will not be graded. 
Missing a class does not release the student from completing the homework assigned or studying the topics covered in class that day.

VII.IV. Make-up Exams
If a student cannot be present for an examination for a valid reason (see V.II.) and approved by the professor and academic direction, a make-up exam will be given.

VII.V. Exam retention
After exams are graded, the teacher will review the examination with the class and collect all exams. The exams will be retained for one semester following the current one, and then they will be destroyed.

VII.VI. Academic Honesty
Students are expected to act in accordance with their university standards of conduct concerning plagiarism and academic dishonesty.

VII.VII. Special accommodations 
Students with special needs who require reasonable accommodations, special assistance or specific aid in this course (either for properly making-up classes, taking exams, etc.) should direct their request to Academic Coordination during the first days of the course.

Teaching staff is required to report any disclosures harassment or violence of any kind.

*Course content subject to change