International Finance and Risk Management


Konstantin Kontor
Konstantin Kontor is Director and professor of finance and strategy at AIBEc.
In 2000 – 2009 Mr. Kontor also served as visiting professor of financial strategy at the Stockholm School of Economics in Riga, where he taught courses in finance, strategy, and M&A for BA and EMBA students.

Purpose of this Course
The main goal of this course is to provide the students with a basic understanding of the principles of international finance (economics of the international environment, purchasing power parity, and sources of risk in the international financial markets.) We will also discuss the theoretical background on which the practices of operation of the international financial markets are based.

Another goal of the course is to expose the students to the Western standards, approaches, and terminology used in the international capital markets and financial institutions worldwide.

The final goal is to discuss the real methodologies of financial decision-making and financial analysis. The course is heavily case-based. It also covers issues from the Western financial history.

Course Materials
  • Selected chapters from the textbook: Alan С. Shapiro. Multinational Financial Management, Allyn and Bacon.
    • Notes, articles, and cases from the course package.

      Grading
      Grading of this course will be based on assignments, examinations and class participation.

      Because the course is heavily case-based attendance is mandatory. Failure to attend 40% of classes leads to immediate failure in the course and loss of credit.

      During the course the students will have to submit 4 homeworks, 2 midterm case write-ups, and take the final examination. Failure to take the final or to hand in any of the midterm case reports is tantamount to failure in the course.

      The course will be graded in accordance with the following schedule:

      Class participation ____________ 10%
      Homeworks ___________________ 20%
      Midterm Case I ________________ 15%
      Midterm Case II ________________ 15%
      Final __________________________ 40%
      Total _________________________ 100%

      Course Topics
      1. Introduction: The scope of international finance. International monetary systems
      2. International parity relationships
      3. The nature of international risk exposure
      4. International risk exposure – Cases (I)
      5. International risk exposure – Cases (II)
      6. Reasons for hedging international risk exposure
      7. Hedging instruments (I): currency options and futures
      8. Hedging instruments (II): currency swaps
      9. Capital budgeting in the international environment
      10. Cost of capital across countries

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