Faculty of Business and Law

School: Business

This unit information may be updated and amended immediately prior to semester. To ensure you have the correct outline, please check it again at the beginning of semester.

  • Unit Title

    Financing of International Trade
  • Unit Code

    MBA6125
  • Year

    2015
  • Enrolment Period

    1
  • Version

    1
  • Credit Points

    20
  • Full Year Unit

    N
  • Mode of Delivery

    On Campus

Description

Increasing globalisation has provided expanded opportunity sets for Multinational Corporations (MNCs) however this has compounded the risks faced by MNCs. Recent economic turmoil triggered by sovereign debt crises in the euro zone, preceded by the global financial crises, is a testament to this phenomenon. This unit aims to develop a fundamental and practical understanding of the various tools available to hedge against risks that may affect operations, and decisions on multinational financing and capital investment. With a strong focus on current and emerging issues, students will learn how to construct, propose and justify strategies to manage the changing needs of a business operating internationally.

Prerequisite Rule

Students must pass 1 units from FBL5030

Learning Outcomes

On completion of this unit students should be able to:

  1. Assess current trends in the overall financial environment to relate the operational, financing and investment impacts on an MNC.
  2. Construct hedging strategies to manage foreign exchange and interest rate risks under changing economic conditions.
  3. Discuss the various components and instruments of the FOREX, financial and money markets in the context of a firm operating globally.
  4. Propose a capital investment plan for a multinational corporation looking to expand foreign operations.

Unit Content

  1. Basic concepts: money demand, money supply, introduction to international trade, international monetary system and the balance of payments.
  2. The FOREX market, international parity conditions, arbitrage and exchange rate determination.
  3. Introduction to foreign currency derivatives: forwards, futures and options.
  4. Managing and hedging foreign exchange exposure.
  5. International financial markets.
  6. Capital structure, the cost of capital, interest rate and currency swaps.
  7. Cash management and international trade transactions.

Additional Learning Experience Information

Students attend a weekly three-hour seminar. Additionally, regular access to the Internet and Blackboard is required. Efforts will be made to feature industry leaders as guest lecturers, enabling learners to make the connections between theory and practical application. Students will be given practice questions on a weekly basis. This will enable them to apply the concepts taught in the prescribed content and be given feedback on their progress. Over and above the prescribed textbook content, systematic efforts will be made during lectures to keep the students abreast of all latest economic and corporate developments.

Assessment

GS1 GRADING SCHEMA 1 Used for standard coursework units

Students please note: The marks and grades received by students on assessments may be subject to further moderation. All marks and grades are to be considered provisional until endorsed by the relevant Board of Examiners.

ON CAMPUS
TypeDescriptionValue
TestMid-semester test20%
Case StudyCase study 120%
Case StudyCase study 220%
ExaminationFinal Exam40%

Text References

  • ^ Eun, C.S., & Resnick, B.G. (2015). International financial management (7th ed.). New York: McGraw-Hill.

^ Mandatory reference


Disability Standards for Education (Commonwealth 2005)

For the purposes of considering a request for Reasonable Adjustments under the Disability Standards for Education (Commonwealth 2005), inherent requirements for this subject are articulated in the Unit Description, Learning Outcomes and Assessment Requirements of this entry. The University is dedicated to provide support to those with special requirements. Further details on the support for students with disabilities or medical conditions can be found at the Access and Inclusion website.

Academic Misconduct

Edith Cowan University has firm rules governing academic misconduct and there are substantial penalties that can be applied to students who are found in breach of these rules. Academic misconduct includes, but is not limited to:

  • plagiarism;
  • unauthorised collaboration;
  • cheating in examinations;
  • theft of other students' work;

Additionally, any material submitted for assessment purposes must be work that has not been submitted previously, by any person, for any other unit at ECU or elsewhere.

The ECU rules and policies governing all academic activities, including misconduct, can be accessed through the ECU website.

MBA6125|1|1

Faculty of Business and Law

School: Business

This unit information may be updated and amended immediately prior to semester. To ensure you have the correct outline, please check it again at the beginning of semester.

  • Unit Title

    Financing of International Trade
  • Unit Code

    MBA6125
  • Year

    2015
  • Enrolment Period

    2
  • Version

    1
  • Credit Points

    20
  • Full Year Unit

    N
  • Mode of Delivery

    On Campus

Description

Globalisation has provided expanded opportunity sets for Multinational Corporations (MNCs) but has also compounded the risks faced by these organisations. Recent economic turmoil triggered by sovereign debt crises in the Eurozone, preceded by the Global Financial Crisis, is a testament to this phenomenon. This unit aims to develop a fundamental and practical understanding of the various tools available to hedge against risks that may affect operations, and decisions on multinational financing and capital investment. With a strong focus on current and emerging issues, students will learn how to construct, propose and justify strategies to manage the changing needs of a business operating internationally.

Prerequisite Rule

Students must pass 1 units from FBL5030

Learning Outcomes

On completion of this unit students should be able to:

  1. Assess current trends in the overall financial environment to relate the operational, financing and investment impacts on an MNC.
  2. Construct hedging strategies to manage foreign exchange and interest rate risks under changing economic conditions.
  3. Discuss the various components and instruments of the FOREX, financial and money markets in the context of a firm operating globally.
  4. Propose a capital investment plan for a multinational corporation looking to expand foreign operations.

Unit Content

  1. Basic concepts: money demand, money supply, introduction to international trade, international monetary system and the balance of payments.
  2. The FOREX market, international parity conditions, arbitrage and exchange rate determination.
  3. Introduction to foreign currency derivatives: forwards, futures and options.
  4. Managing and hedging foreign exchange exposure.
  5. International financial markets.
  6. Capital structure, the cost of capital, interest rate and currency swaps.
  7. Cash management and international trade transactions.

Additional Learning Experience Information

Students attend a weekly three-hour seminar. Additionally, regular access to the Internet and Blackboard is required. Efforts will be made to feature industry leaders as guest lecturers, enabling learners to make the connections between theory and practical application. Students will be given practice questions on a weekly basis. This will enable them to apply the concepts taught in the prescribed content and be given feedback on their progress. Over and above the prescribed textbook content, systematic efforts will be made during lectures to keep the students abreast of all latest economic and corporate developments.

Assessment

GS1 GRADING SCHEMA 1 Used for standard coursework units

Students please note: The marks and grades received by students on assessments may be subject to further moderation. All marks and grades are to be considered provisional until endorsed by the relevant Board of Examiners.

ON CAMPUS
TypeDescriptionValue
TestMid-semester test20%
Case StudyCase study 120%
Case StudyCase study 220%
ExaminationFinal Exam40%

Text References

  • ^ Eun, C.S., & Resnick, B.G. (2015). International financial management (7th ed.). New York: McGraw-Hill.

^ Mandatory reference


Disability Standards for Education (Commonwealth 2005)

For the purposes of considering a request for Reasonable Adjustments under the Disability Standards for Education (Commonwealth 2005), inherent requirements for this subject are articulated in the Unit Description, Learning Outcomes and Assessment Requirements of this entry. The University is dedicated to provide support to those with special requirements. Further details on the support for students with disabilities or medical conditions can be found at the Access and Inclusion website.

Academic Misconduct

Edith Cowan University has firm rules governing academic misconduct and there are substantial penalties that can be applied to students who are found in breach of these rules. Academic misconduct includes, but is not limited to:

  • plagiarism;
  • unauthorised collaboration;
  • cheating in examinations;
  • theft of other students' work;

Additionally, any material submitted for assessment purposes must be work that has not been submitted previously, by any person, for any other unit at ECU or elsewhere.

The ECU rules and policies governing all academic activities, including misconduct, can be accessed through the ECU website.

MBA6125|1|2