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ACFI3140: International Finance
OVERVIEW
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Course Description |
In an increasingly global business world, awareness of the most important dimensions of international finance is vital. This course
exposes you to the advanced aspects of corporate financial management in an international setting such as currency loans hedged
with options and real exchange rates. International Finance equips you with both the knowledge and the technical skills required to understand and analyse a range of relevant financial issues within the global environment.
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Contact Hours |
Integrated Learning Session
Face to Face On Campus Two (2) hour(s) per Week for Full Term
Students are expected to complete 4 hours of guided learning via online preparation, lectures, interactive workshops, tutorials, discussion groups or self directed learning and an additional 6 hours of independent study per week. |
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Unit Weighting |
10 |
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Pre-requisites
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Students must have successfully completed ACFI2070 to enrol in this course.
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Workload |
Students are required to spend on average 120-140 hours of effort (contact and non-contact) including assessments per 10 unit course. |
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Please refer to the course CANVAS site for details of teaching staff for ALL course offerings. The primary contact for courses is the Course Coordinator, whose details are listed on the course CANVAS site. |
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Student Consultation |
A minimum of one (1) hour of consultation per week. Please see course CANVAS site for details of time and location. |
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Course Learning Outcomes |
On successful completion of this course, students will be able to:
1. Review the problems of dealing in foreign currency and the advantages and disadvantages of overseas funding;
2. Recognise and calculate forward exchange rates given spot rates;
3. Identify market conventions on exchange rate quotation and correctly calculate those quotations;
4. Demonstrate an integrative understanding of the foreign exchange market and the relationships between interest rates, spot and forward rates and expected inflation rates;
5. Comprehend the range of hedging strategies including forward rate hedging and contingent hedging;
6. Explain the use of futures and option contracts in hedging foreign exchange exposure;
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ASSESSMENT DETAILS
This course has 3 assessments. Each assessment is described in more detail in the sections below:
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Assessment Name |
Due Date |
Involvement |
Weighting |
Learning Outcomes |
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1 |
Online Quiz
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Open: Monday – Week 1
Closes: Sunday – Week 5 at 11:59 pm
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Individual |
10% |
1, 2, 3, 4, 5, 6, 7
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2 |
Mid Semester Quiz
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Week 8
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Individual |
20% |
1, 2, 3, 4, 5, 6, |
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Individual Assignment | Monday – Week 12 at 11:59 pm |
Individual
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30% |
2, 3, 4, 5, 6, 7, 8, 9
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3 |
Final Examination |
Formal Examination Period |
Individual |
40% |
1, 2, 3, 4, 5, 6, 7, 8, 9 |
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Assessment 1 – Online Quiz
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Assessment Type |
Quiz
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Purpose |
The purpose of this quiz is to assess your progressive knowledge and skill and to provide prompt feedback on your progress.
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Description |
The Quiz requires applying critical thinking, analytical and problem solving skills in the context of questions relevant to the foreign exchange market.
The online quiz will cover material from Weeks 1 to 4 (inclusive) and will include multiple choice questions. There will be 10 multiple choice questions and you will be allowed only one attempt at the quiz.
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Weighting |
10% |
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Length |
45 minutes
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Due Date |
Open from Monday – Week 1 at 9:00 am. Due on Sunday – Week 5 at 11:59 pm
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Submission Method |
Online - CANVAS - Online Quiz
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Assessment Criteria |
Five (5) criteria will be used:
• Demonstrated understanding of theory and relevant concepts
• Demonstrated application of financial mathematical models to solve investment problems
• Accuracy of information/argument.
• Clarity of expression
• Relevance to the question
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Return Method |
Online |
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Feedback Provided |
Online - The final mark for the online quiz will be provided after the answers have been submitted.
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Assessment 2 - Group Research Report &Presentation |
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Assessment Type |
Quiz
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Purpose |
The purpose of this quiz is to assess your progressive knowledge and skill and to provide prompt feedback on their progress.
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Description |
The quiz requires application of your critical thinking, analytical and problem solving skills in the context of questions relevant to the foreign exchange market. The quiz will comprise short-answer and multiple choice questions.
The mid-semester quiz will cover material from Weeks 1 to 7 (inclusive) and will include problems as well as multiple choice questions.
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Weighting |
20% |
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Length |
90 minutes (including 10 minutes reading time)
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Due Date |
Week 8
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Submission Method |
In Class
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Assessment Criteria |
Five (5) criteria will be used:
• Demonstrated understanding of theory and relevant concepts
• Demonstrated application of financial mathematical models to solve investment problems
• Accuracy of information/argument.
• Clarity of expression
• Relevance to the question
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Return Method |
Online via course CANVAS site
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Feedback Provided |
The answer sheet and marks will be returned to students in hard-copy on the assessment item two weeks after the quiz.
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Assessment 3 - Individual Assignment
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Assessment Type |
Written Assignment
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Purpose |
The purpose of this assignment is to assess your understanding of key concepts and your capacity to apply theoretical knowledge and analytical techniques to solving practical problems in the FX market. It will be designed to test your ability to apply the skills and knowledge gained in the course to problems related to international finance
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Description |
The assignment requires accessing and analysing financial data from the FX market.
The assignment consists of a written communication component regarding the importance of hedging strategies.
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Weighting |
30% |
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Length |
2000 words
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Due Date |
Due on Monday – Week 12 at 11:59 pm |
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Submission Method |
Online - via Turnitin
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Assessment Criteria |
Five (5) criteria will be used:
• Demonstrated understanding of theory and relevant concepts
• Demonstrated application of financial tools in relevant business decision making
• Depth and relevance of analysis
• Logic and reasoning of arguments
• Structure and presentation of the report
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Return Method |
Online
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Feedback Provided |
Online - Marks will be posted on CANVAS within two weeks of submission.
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| Assessment 4 - Final Examination | |
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Assessment Type
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Formal Examination |
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Purpose
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The examination assesses your capacity to consolidate and apply knowledge and skills in the context of International Finance. |
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Description
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The exam requires application of critical thinking and problem solving to questions related to international Finance and the concept/application of hedging/funding strategies in the FX market.
This course has a RESTRICTED OPEN BOOK examination. A memory aid is permitted. The memory aid is a single double sided A4 sheet of handwritten or typed notes for use during the examination. Note: memory aids must be left on the examination table and cannot be removed from the examination venue.
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Weighting
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40%
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Length
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120 minutes |
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Due Date
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Formal Exam Period |
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Submission Method
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Formal Examination |
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Assessment Criteria
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Five (5) criteria will be used:
• Demonstrated understanding of theory and relevant concepts
• Demonstrated application of financial mathematical models to solve investment
problems
• Accuracy of information/argument.
• Clarity of expression
• Relevance to the questions
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Return Method
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Not Returned
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Feedback Provided
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No Feedback. Examination scripts will not be returned to students. Final examination scripts will be made available for review by students, upon request, in a controlled and monitored setting. Students are required to make requests, directly to the relevant course coordinator. Completed examination scripts are kept by the Newcastle Business School for a period of six (6) months only, from the relevant fully graded date. Requests made after the six (6) month period cannot be considered.
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SYLLABUS
Course Content
Course Materials
SCHEDULE
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Week |
Topic |
Class Preparation |
Assessment |
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1 |
Overview of the International Monetary system
Using Excel for Regression Analysis
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Chapter 1 & 2
Supplementary slides
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Understanding financial globalisation, exchange rates and currency regimes
Understand the history of the modern monetary system
Introduction to using Excel to conduct regression analysis
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2 |
The FX Market 1
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Chapter 5
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Overview of the Foreign Exchange market and the participants |
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3 |
The FX Market 2
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Chapter 5
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Learn the forms of currency quotations and transactions |
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4 |
Risk aversion and asset allocation |
Chapter 6 |
Economic models in determining the theoretical interest rate |
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5 |
Exchange Rate Determination and Forecasting |
Chapter 9
Supplementary chapter
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Understand econometric and technical models in exchange rate forecasting
Assessment 1 due: Sunday week 5 by 11:59 pm
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6 |
Foreign Currency Derivatives
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Chapter 7
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Understand FX futures, options and their returns
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7 |
Interest Rate Risk and Swaps
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Chapter 8
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Examine the use of interest rate swaps tomanage risk |
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8 |
Mid Semester Quiz
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Assessment 2: Mid Semester Quiz – in Class
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9 |
Diverse Risk Exposure
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Chapters 10 & 12
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Apply business risk analysis to understand the risk exposure due to the fluctuation of exchange rates
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10 |
Sourcing Equity and Debt Globally
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Chapter 14
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Discuss multiple methods in raising funds through the global equity and debt market |
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11 |
International diversification |
Chapter 15
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Explore the characteristics of multinational tax management |
| 12 |
Foreign Direct Investments
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Chapter 17
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Understand the advantages and disadvantages of FDI
Assessment 3 due: Monday, week 12 by 11:59 pm
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13 |
Course Review
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