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Identify and contrast the major markets that facilitate international business. Describe relationships between exchange rates and economic variables, and explain the forces that influence these relationships.

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Prep reading
Students are expected to preview the readings under each module and
post their understandings, thoughts related news, and/or applications on the
concepts listed under each module (Module One-Four; minimum half-page, single space per concept).
The attachment is the required book。
Module One – Introduction
to the International Financial Environment & the Determination of Exchange
Rates
Readings:
Chapter 1-3
Identify
and contrast the major markets that facilitate international business. Describe
relationships between exchange rates and economic variables, and explain the
forces that influence these relationships. Our focus will be on international
trade, financial system, monetary policy, and capital flows.
Prep Concepts: Functions of money; Monetary
policy; Floating exchange rate.
Case 1a: The EURO (understanding about its
history, uniqueness, role, strength, challenges, and future)
Reference: https://www.economist.com/leaders/2019/01/03/the-euro-still-needs-fixing
Case 1b: The trend of legal tender? (Bitcoin,
legal tender, and El Salvador)
Reference: https://www.thestreet.com/phildavis/news/bitcoin-will-soon-be-legal-tender-in-el-salvador-heres-what-that-means
Module Two –International Money Market, Bond Market and Equity
Market:
Reading: Chapter 11-13; International financial markets, Madura, 2014
http://mays.tamu.edu/center-for-international-business-studies/wp-content/uploads/sites/14/2015/05/Chapter-03.pdf; Covid-19 impacts https://www2.deloitte.com/us/en/insights/economy/covid-19/banking-and-capital-markets-impact-covid-19.html
Building on the understandings of time value of money, pricing of
bonds and stocks, an overview of global capital market will be discussed to
help students to understand how capital could be moved efficiently across
national borders to meet demand in other parts of the world.
Prep Concepts: Time value of
money; Foreign bond; Yield to maturity
Module Three – Foreign Exchange Transactions and Risk Management: Reading:
Chapter 5-7; https://www.theseus.fi/bitstream/handle/10024/104281/Vitalie+Antoci+-+Transaction+Exposure.pdf?sequence=1
Introduce
three primary types of derivative contracts: Forwards vs Futures vs Options to
equip students with the understandings about how these contracts work and thus
used as hedging tools. Then we will dialogue on the foreign exchange risk
management for multinational corporations and how to use money market and
derivative market to manage the risk.
Prep Concepts: Futures; Options; Hedge
in Finance
Case 2: Propose and present on the detailed
strategies for any MNC of choice of risk hedging (Your choice: either foreign
exchange risk or oil risk).
Reference: https://www.wsj.com/articles/companies-warn-currency-swings-will-weigh-on-earnings-1533115800
https://www.bloomberg.com/news/articles/2021-11-05/airlines-are-hedging-against-higher-oil-prices-again
Module Four- International
Taxation and Capital Budgeting
Readings:
Chapter 16-19, and 21
Based
on the solid understanding of international tax planning, discuss financing
decisions with international bonds, equity and hybrids; cost of capital.
Synthesize and evaluate options for the management of long-term assets and
liabilities, including motives for direct foreign investment, multinational
capital budgeting, country risk, analysis, and capital structure decisions. Prep Concepts: Capital budgeting; Net
present value; CAPM(capital asset pricing model)
Case 3: Please provide a detailed discussion on
why BMW chose Hungary over Slovakia to build its new plant in 2018 AND updates.
Reference: https://www.reuters.com/article/us-bmw-production-factory/bmw-to-build-1-billion-euro-car-factory-in-hungary-idUSKBN1KL12X
Case 4:
Research a cross-listed company and discuss the pros, cons, and rationales. Reference:
https://www.financierworldwide.com/innovative-approaches-to-cross-listings#.XOchNNh7nIU

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