20253 - INTERNATIONAL FINANCIAL MARKETS
Department of Finance
GIUSEPPE CORVINO
Suggested background knowledge
Mission & Content Summary
MISSION
CONTENT SUMMARY
- The significance of economies of scale in international financial markets: the role of interest rates
- The necessity of operating internationally in today's financial markets
- What structuring a financial transaction entails today: some real-life examples
- World financial markets and institutions
- The importance of international regulation for businesses and how it originated and is applied
- The pursuit of international job profiles and what it takes to build a career in global finance institutions
- International banking
- International money markets
- International bond markets
- International equity markets
- Interest rates and currency swaps
- The role of insurance and reinsurance in international financial markets
- International portfolio management
The course will include guest lectures from:
- Antonio Rizzo, Financial Planning Manager at ENI SpA Finance, discussing ENI’s use of swaps to hedge FX interest rate risk
- Paolo Turchetti, member of the Spencer Stuart’s Financial Services Practice, sharing insights on the pursuit of international job profiles and what it takes to build a career in global financial institutions
- Alessandro Raspa, Managing Director at Apollo Global Management, highlighting the significance of economies of scale in international financial markets and the necessity of operating internationally in today's financial environment
- Luca Tres, Head of EMEA Strategic Risk and Capital Life Solutions at Guy Carpenter, discussing the role of insurance and reinsurance in international financial markets
Intended Learning Outcomes (ILO)
KNOWLEDGE AND UNDERSTANDING
- Describe international capital markets instruments and procedures
- Understand the significance of international regulation for businesses, as well as its origins and applications
- Recognise the attributes of international job profiles and what it takes to develop a career in global financial institutions
- Understand the factors affecting the performance of an investment portfolio
- comprising international assets
- Explain corporate investment decisions within a multinational corporation
- Explain the Balance of Payments of a country
- Identify FX market prices and potential arbitrage opportunities
- Describe and use international FX parities
- Identify sources of FX risks for a company
- Having a general overview of how a trading floor functions
APPLYING KNOWLEDGE AND UNDERSTANDING
- Evaluate prospects for a currency's appreciation/depreciation;
- Analyze and quantify exposure to FX risks;
- Evaluate and choose FX hedging tools;
- Compare financial alternatives for funding in international markets;
- Design an international investment portfolio;
- Design a strategy for international listing;
- Learning some basics about Bloomberg.
Teaching methods
- Lectures
- Guest speaker's talks (in class or in distance)
- Company visits
- Practical Exercises
- Individual works / Assignments
- Collaborative Works / Assignments
- Interaction/Gamification
- Competitions/Hackathons
DETAILS
The learning experience of this course includes, in addition to face-to-face lectures, the resolution of problem sets assigned throughout the course. These exercises will enable students to apply the analytical tools demonstrated during the course.
Moreover, students will discuss case studies throughout the course to evaluate the implications of specific corporate or investment decisions. Since the cases are
examination material, students should ensure they understand them as thoroughly as the textbook content.
Students will be encouraged to share their perspectives and insights.
Finally, some of the classes will centre around trading simulation.
A good chunk of the second part of the course will involve hands-on practice sessions in the Bloomberg lab. These sessions aim to expose the students to actual industry practice and equip them with tools that they may need in their future careers.
Assessment methods
Continuous assessment | Partial exams | General exam | |
---|---|---|---|
|
x | ||
|
x |
ATTENDING AND NOT ATTENDING STUDENTS
The lecture is a central learning source, and the textbook will generally be adhered to.
The most significant points from the assigned textbook chapter(s) will be presented; however, the instructors may not cover everything. They will emphasise certain aspects while neglecting others. Occasionally, they will introduce material in the lecture that is not included in the textbook and may exclude parts of it. This additional content is provided because it is believed to be crucial for helping you grasp the subject. Everything on the lecture slides is relevant to the exam, and the slides will be made available before the class.
Before any test or exam, the relevant sections of the textbook, slides, and guest lecture will be clarified.
The grade combines the student’s performance on the final exam and during the class period.
For the first part (Professors Corvino and guest speakers), the score is determined by taking the maximum of the following:
- A combination of your grades on two intermediate tests (each weighted at 15% of the total grade) and the final exam (weighted at 70%), and
- A score based solely on the final exam (weighted at 100%).
In other words, the scheme that is most advantageous to you will determine your grade.
For the second part of the Course (Prof. Cimino), the score is determined as a combination of your grade on a trading competition (weight of 15%) plus pitching a
trading idea (weight of 15%) plus class participation (weight of 10%) plus the final exam (weight of 60%).
The final exam is written and based on (i) solving problems similar to the end-of-chapter problems from the textbook and other problems discussed in class and (ii) interpretation of the theory.
The final grade will be the mathematical average rounded to the nearest integer of the grades obtained in the first and second parts.
Teaching materials
ATTENDING AND NOT ATTENDING STUDENTS
Selected excerpts (see the previous “Assessment methods” section) from Eun, C. S., B. G. Resnik, and T. Chuluun, International Financial Management, McGraw Hill. The most recent edition is the tenth; however, older editions (within reason) can be equally effective for examination preparation.
Lecture slides, supplementary readings, exercises, and blog discussions available on BlackBoard.