International Financial Management is a subject, a part of the Financial Management Specialty, and a core subject in the Undergraduate Degree Course in Business Administration and Management and in the Undergraduate Degree in Finance and Insurance.

The main objective is that the students achieve a suitable level of understanding of international financial management in the short term. The students first become familiar with negotiation in the currency markets and then examine the exchange rate risk and other international risks, as well as possible forms of coverage for them.

Specific Competencies of the subject:

 Knowledge:

o Mastery of the specific characteristics and operations in the currency markets.

o Mastery of the basic factors that determine the exchange rate and others that determine the exchange rate (both spot and forward).

o Knowledge of the concept of exchange rate risk, its repercussions on businesses, and methods to measure and cover it.

 Skills:

o Ability to analyze the situation of the exchange rate markets.

o Ability to observe, detect and analyze the exchange rate risk of a company or organization.

 Other skills:

o Ability to understand, interpret and analyze the data provided by international financial information sources.

o Ability to detect exchange rate risk, analyze and communicate the result of the analysis in a clear and comprehensible way.



Cross-cutting skills that will be worked on in the subject:

• Autonomous learning.

• Written communication.

TOPIC 1. THE INTERNATIONAL FINANCIAL SYSTEM

1.1. Introduction

1.2. The concept of currency

1.3. The international financial system

1.4. Globalization, the Euro and the financial management of companies



TOPIC 2. THE SPOT MARKET

2.1. Introduction

2.2. Currencies and exchange markets

2.3. Participants in the spot market

2.4. Market organization and expression of exchange rate

2.4.1. Organization of the exchange rate market

2.4.2. Negotiation of currencies and exchange rates

2.4.3. Parity, monetary intervention and exchange rate control

2.4. Arbitration in the currency spot market



TOPIC 3. THE DETERMINATION OF THE SPOT EXCHANGE RATE

3.1. Introduction

3.2. Determination of the spot exchange rate: influencing factors

3.3. Basic relationships of the spot exchange rate

3.3.1. Parity of purchasing power

3.3.1.1. Approach

3.3.1.2. Repercussions on business management

3.3.2. Parity not covered by the interest rate

3.3.2.1. Approach

3.3.2.2. Repercussions on business management

3.4. Approaches and models to determine the exchange rate





TOPIC 4. THE SPOT EXCHANGE MARKET

4.1. Introduction

4.2. Function and operation

4.3. Arbitration in the spot currency market and parity covered by the interest rate

4.4. The forward exchange rate as a predictor of the future spot exchange rate



TOPIC 5. EXCHANGE RATE RISK AND HOW TO MEASURE IT

5.1. Introduction

5.2. The exchange rate risk and exposure to it

5.2.1. Concept and some forms of measurement

5.2.2. Exposure to the exchange rate risk. The principle of coverage

5.2.3. Company exchange rate risk

5.3. Accounting approach

5.4. Transaction exposure

5.4.1. Concept

5.4.2. Exposure and transaction risk. Measurement

5.5. Economic exposure

5.5.1. Concept, components and factors

5.5.2. Measurement



2. Mercado de cambios y gestión empresarial

a) Clases de mercados de divisas. El mercado de cambios

b) Organización del mercado y expresión del tipo de cambio

c) Determinación del tipo de cambio: relaciones básicas y repercusiones sobre la gestión empresarial

4. El riesgo de cambio y su medición

a) Riesgo de cambio y exposición

b) Medición del riesgo de cambio: aproximación contable, exposición de transacción y exposición económica

5. La gestión del riesgo de cambio: técnicas de cobertura

a) Un modelo general para la gestión del riesgo de cambio

b) La alternativa de no cobertura

c) La cobertura externa: mercados al contado y a plazo, futuros y opciones sobre divisas, swaps, seguro de riego de cambio

d) La cobertura interna: autocobertura, adelantos y retrasos de cobros/pagos

The assessment system will consist of two parts: 1) continuous assessment that will include the performance of various activities, and 2) a final exam. Through the activities carried out during continuous assessment, a maximum of 3 points can be obtained, therefore the maximum points that can be obtained in the exam is 7.

• Final Assessment System
• Tools and qualification percentages:
  • Written test to be taken (%): 70
  • Realization of Practical Work (exercises, cases or problems) (%): 5
  • Individual works (%): 15
  • Team projects (problem solving, project design)) (%): 5
  • Exhibition of works, readings ... (%): 5

The assessment system will consist of two parts: 1) continuous assessment that will include the performance of various activities, and 2) a final exam. Through the activities carried out during continuous assessment, a maximum of 3 points can be obtained, therefore the maximum points that can be obtained in the exam is 7.

The assessment system will consist of two parts: 1) continuous assessment that will include the performance of various activities, and 2) a final exam. Through the activities carried out during continuous assessment, a maximum of 3 points can be obtained, therefore the maximum points that can be obtained in the exam is 7.

Teaching material provided by the teaching staff (theoretical concepts, exercises and cases)

Basic bibliography

GONZÁLEZ, S. (2000): El sistema monetario internacional y el mercado de divisas. Pirámide, Madrid .



LEVI, M.D. (2000): Finanzas internacionales. McGrawHill, México.



KRUGMAN, PAUL R. (2012): Economía Internacional "Teoría y política". Pearson Educacion.

In-depth bibliography

BRUN, X.; ELVIRA, O. y PUIG, X. (2008): Mercado de renta variable y mercado de divisas. Profit, Barcelona.
COSTA, L. y FONT, M. (2003): Las divisas en la estrategia internacional de la empresa. Icex, Madrid.
REUTERS (2004): Curso sobre mercados monetarios y de divisas. Ediciones Deusto, Barcelona.
SHAPIRO, AC. (2006): Multinational financial management. John Wiley & Sons, Londres.

Journals

Análisis Financiero Internacional
Cuadernos de Gestión
Moneda y Crédito
Perspectivas del Sistema Financiero
Finanzas y Desarrollo
Estrategia Financiera
Informe sobre la estabilidad financiera mundial
Perspectivas de la Economía Mundial

Web addresses

http://www.forextrading.com
www.goforex.net
http://www.finanzas.com/divisas
http://es.exchange-rates.org
www.planetaforex.com
http://www.divisasforex.com
http://www.fxstreet.com
http://www.ozforex.com.au
http://www.forexpros.es
http://www.xtb.es
http://www.euroforex.es/