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Macroeconomics (with International Finance)

Code Cours
2324-RIZOMM-ECON-EN-4001
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Établissement
Faculté de Gestion, Economie & Sciences Masters
Langue d'enseignement
FR, EN
Ce cours apparaît dans les formation(s) suivante(s)
Master International Management - Crédits ECTS:
Période
S2

Présentation

Prérequis

English speaking, basics of economics/finance.

Objectifs

The aims of the course include:



Providing an overview of the international monetary system, foreign exchange market, international parity conditions and foreign exchange exposure.


The objective is to provide a framework for foreign exchange rate determination and its impact on multinational firms.



LEARNING OUTCOMES- At the end of the course, students will:



  • have a comprehensive understanding of the structure and functions of the international monetary system (IMS) and foreign exchange (FX) market.

  • have an in-depth understanding of international parity conditions and foreign exchange rate determination.

  • have an overview of the main instruments that could be used to hedge foreign exchange exposure.



Présentation

Chapter I: International Finance



  • The International Monetary Institutions

  • The Balance Of Payment (BOP)

  • Evolution of IMS

  • The Triffin Paradox


Chapter II: The Foreign Exchange Market



  • Key features

  • Currency Pairs and quotes

  • Bid & Ask spread

  • Cross currency rate


Chapter III: International Parity Relationship



  • Interest Rate Parity

  • Absolute Purchasing Power Parity (PPP)

  • Relative PPP

  • International Fisher Effect

  • Forward Expectation Parity

  • Uncovered Interest Rate Arbitrage


Chapter IV: Forex Risk Hedging



  • Interest Rate Swap

  • Currency Swaps

  • Risk of using Swap

  • Different Types Of Options (Call vs. Put; American vs. European)

  • Currency Options Markets

  • Basic Option-Pricing Relationships


Chapter V: Management of FX Exposure



  • Define Currency Exposure and Motivation Why Hedge FX Risk

  • Three Types of FX Exposure

  • Manage transaction exposure internally

  • Choice of the invoice currency

  • Lead/lag strategy

  • Exposure netting

  • Risk sharing

Modalités

Modalités d'enseignement

Teaching methods include:

  • Lectures: 10
  • Personal work: 15
  • OVERALL STUDENT WORKLOAD: 15

Assessment

Continuous assessment

  • Homework: 1h duration, 5 total, 30%
  • Class Participation: 10%
  • Final Exam: 2h duration, 1 total, 60%

TOTAL: 100,00

Évaluation

Ressources

Bibliographie

<ul> </ul> <b> </b>|| <ul> </ul> <b> </b><i> </i>|| <ul> <li>Advanced Macroeconomics 2 edition – Sanjay Rode (2015).</li> <li>Principles of Macroeconomics – Steven Greenlaw &amp; David Shapiro (2011).</li> </ul> All documents are provided by the professor and updated on a yearly basis.||