Management of a company's foreign exchange exposure.Transactions with foreign trading partners will in many cases be denominated in foreign currencies.It is therefore an integral part of the financial management of a company with international operations to monitor the firm's exposures to fluctuations in foreign exchange rates.A broad range of financial instruments can be used to manage the exposures connected with international transactions. Company financing in a global environment.Estimation of cost of capital and determination of capital structure when funding of the firm takes place in several countries and currencies. Calculation of a company's cost of equity.Costs and benefits of listing abroad.Use of interest rate and currency swaps in management of financial risks. Foreign investment decisions.Capital budgeting and calculation of returns in connection with investment projects abroad.Management of political,economic and financial risks in direct investments. .Analysis of international portfolios.The trade off between risk and return when stock price volatility and exchange rate volatility are combined. LEARNING OUTCOME;QUALIFICATIONS AND COMPETENCES: Knowledge about the fundamental characteristics of international business o Global financial environment o Corporate governance in an international perspective o Foreign exchange rate regimes and markets Determination of expected exchange rates based on different approaches such as: o International parity conditions o Fundamental analysis based on balance of payments variables Evaluation of different foreign exchange risk exposures o Identification,measurement and management Determination of cost of capital o Weighted average cost of capital o Cost of equity o Capital structure o Cost of debt Management of international assets and liabilities o Multinational capital budgeting o International trade finance o Foreign direct investments COURSE AGENDA Week 1 Course introduction Current Global Financial Crisis Video:Dollar Bubble DiMartino and Duca(Economic Letter,Insights from the FRB-Dalls,Nov.2007), The Rise and Fall of Subprime Mortgages Ashcraft and Schuermann(The Investment Professional,Fall 2008,pp.2-11),The Seven Deadly Frictions of Subprime Mortgage Credit Securitization Haubrich et al.(FRB Cleveland Annual Report 2007),Central Banks Crisis• Management of a company’s foreign exchange exposure. Transactions with foreign trading partners will in many cases be denominated in foreign currencies. It is therefore an integral part of the financial management of a company with international operations to monitor the firm’s exposures to fluctuations in foreign exchange rates. A broad range of financial instruments can be used to manage the exposures connected with international transactions. • Company financing in a global environment. Estimation of cost of capital and determination of capital structure when funding of the firm takes place in several countries and currencies. Calculation of a company’s cost of equity. Costs and benefits of listing abroad. Use of interest rate and currency swaps in management of financial risks. • Foreign investment decisions. Capital budgeting and calculation of returns in connection with investment projects abroad. Management of political, economic and financial risks in direct investments. • Analysis of international portfolios. The trade off between risk and return when stock price volatility and exchange rate volatility are combined. LEARNING OUTCOME; QUALIFICATIONS AND COMPETENCES: • Knowledge about the fundamental characteristics of international business o Global financial environment o Corporate governance in an international perspective o Foreign exchange rate regimes and markets • Determination of expected exchange rates based on different approaches such as: o International parity conditions o Fundamental analysis based on balance of payments variables • Evaluation of different foreign exchange risk exposures o Identification, measurement and management • Determination of cost of capital o Weighted average cost of capital o Cost of equity o Capital structure o Cost of debt • Management of international assets and liabilities o Multinational capital budgeting o International trade finance o Foreign direct investments COURSE AGENDA Week 1 Course introduction & Current Global Financial Crisis Video: Dollar Bubble DiMartino and Duca (Economic Letter, Insights from the FRB-Dalls, Nov. 2007), The Rise and Fall of Subprime Mortgages Ashcraft and Schuermann (The Investment Professional, Fall 2008, pp. 2-11), The Seven Deadly Frictions of Subprime Mortgage Credit Securitization Haubrich et al.(FRB Cleveland Annual Report 2007), “Central Banks & Crisis