International Trade Finance
Curriculum guideline
Material will be presented within a lecture/discussion environment.
1. Trade risks and risk assessment
- International trade practices
- Product risks
- Commercial risks (purchaser risks)
- Adverse business risks
- Political risks
- Currency risks
- Financial risks
2. Methods of payment
3. Bonds, guarantees and standby letters of credit
4. Currency risk management
- Currency risk
- The currency markets
- The spot trade
- Currency exposure
- Hedging currency risks
- Practical currency management
5. Export credit insurance
6. Trade finance
- Finance alternatives
- Pre-shipment finance
- Supplier credits
- Refinancing of supplier credits
- Buyer credits
- The international money market
7. Structured trade finance
- International leasing
- Lines of credit and local currency finance
- Project finance and joint venture
8. Terms of payment
9. Capital budgeting
- Cash flows estimation
- Other factors to consider: exchange rate fluctuations, inflation, financing arrangements, etc.
- Adjusting project assessment for risk (sensitivity analysis)
At the end of the course, the successful student should be able to:
- demonstrate understanding of the foundations of international trade and finance (transaction facilitation, risk management, financing, information sharing);
- evaluate the purchaser-related and the country-related risks (e.g. political and economic risks), and find possible ways to minimize or avoid them;
- evaluate the foreign-exchange risks;
- search for alternatives to finance international trades in the proper timeframe (short-, medium- and long-terms);
- prepare a trade project, identify its positive and negative cash flows, project the cash flow statements and evaluate the feasibility of the project from the financial perspective; and
- analyze financial statements, prepared using different accounting standards in accordance with the regulatory body for a specific country.
| 1. Term Examinations (2-3) | 30-45% |
| 2. Final Examination | 30% |
| 3. Assignments (6-8) | 15-20% |
| 4. Project | 10-20% |
| Total: | 100% |
Note: Students must achieve a grade of at least 50% of the combined examinations to pass the course.
GRATH, Anders. The Handbook of International Trade and Finance. Kogan Page, latest edition.
MADURA, Jeff. International Corporate Finance, Cengage Learning, latest edition.
MOFFETT, M. H.; STONEHILL, A. I., FITEMAN, D. K. Fundamentals of Multinational Finance, Pearson, latest edition.
Or any alternative textbook approved by the Business Department.
Nil
Nil
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