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ECTS Course Overview

International Finance

* Exchange students do not have to consider this information when selecting suitable courses for an exchange stay.

Course Unit Code114-0522/02
Number of ECTS Credits Allocated4 ECTS credits
Type of Course Unit *Choice-compulsory
Level of Course Unit *First Cycle, Second Cycle
Year of Study *
Semester when the Course Unit is deliveredWinter Semester
Mode of DeliveryFace-to-face
Language of InstructionEnglish
Prerequisites and Co-Requisites Course succeeds to compulsory courses of previous semester
Name of Lecturer(s)Personal IDName
HLA31Ing. Karel Hlaváček, Ph.D.
LIB009doc. Dr. Ing. Jan Libich
MEL044doc. Ing. Aleš Melecký, Ph.D.
This course deepens knowledge gained in basic courses of economics and finance
of themes of financial relations, which take place among the subjects of
international markets. The central themes of the course are selected topics
from the international finance. These topics cover particularly foreign
exchange markets, global markets of debt financial instruments, financial
management of multinational corporations, financial crisis, determination and
forecasting of exchange rates.
Learning Outcomes of the Course Unit
- To interpret topics of international finance, its theoretical backgrounds and real events.
- To explain impacts of exchange rate risk in company and discuss possibilities of measuring and managing exposures.
- To design possible ways of financing through instruments that are offered in the international financial markets.
- To argue advantages and disadvantages of various forms of international investments.
- To evaluate process of financial crises - its causes, symptoms and consequences - including possibilities of their forecasting.

Course Contents
1. Introduction to foreign exchange markets.
- Exchange rates and quotation.
- Function and structure of forex markets.
- Interbank forex market.
- spot and forward transactions

2. Forward and swaps.
- Evolution of forward transactions.
- Forwards.
- Swaps.
- Comparison with other currency derivates (fututres, options).

3. Foreign exchange risk and exposure.
- Characteristics of FX risk and exposure.
- Transaction exposure.
- Translation exposure.

4. Globalisation of financial markets and international banking.
- Development of financial markets.
- New forms of international financing.
- Recent trends in development of international financial system.

5. Eurocurrency markets and eurocredits.
- Development of Eurocurrency instruments.
- Forms of eurocredits.
- Euronotes markets.

6. Eurobonds.
- Eurobond market.
- Types of eurobonds.
- Subjects of Eurobond markets.

7. Organisation of Eurobond issues.
- Procedures of an Eurobond issue.
- Costs of Eurobond issues .
- Global bonds.

8. International share markets.
- Share issues at foreign markets.
- Foreign share markets.
- Global shares.

9. International portfolio investments.
- International investments and risk diversification.
- Foreign investments and CAPM.
- Selection of international portfolio.

10. Foreign direct investments.
- International capital budgeting.
- Country risk analysis .
- International taxation.

11. Models of exchange rate determination.
- Assets market model.
- Determination in long run.
- Modern theories of exchange rate determination.

12. Exchange rates management.
- Exchange rate regimes.
- Theoretical approaches to exchange rates managing.
- Currency interventions and their effectiveness.

13. Financial crises.
- Characteristics of financial crises.
- Analysis of financial crises.
- Forecasting models.

14. Balance of payments.
- Balance of payments‘categories.
- Adjusting of the balance of payments.
- Sustainability of current account deficits.

Recommended or Required Reading
Required Reading:
EITEMAN, D. K., STONEHILL, A. I., MOFFETT, M. H. Multinational Business Finance. 14th ed., Harlow: Pearson Education Limited, 2016. ISBN 978-0133879872.
SHAPIRO, A.C. Multinational Financial Management. 10th ed., Wiley, 2013. ISBN 978-1118572382.
KRUGMAN, P.R, OBSTFELD, M., MELITZ, M.J. International Economics: Theory and Policy, Global Edition. Harlow: Pearson Education Limited, 2018. ISBN: 978-1-292-21487-0.
DURČÁKOVÁ, J. a MANDEL, M. Mezinárodní finance a devizový trh. Praha: Management Press, 2016. ISBN 9788072612871.
POLOUČEK, S. a kol. Peníze, banky, finanční trhy. 1. vyd. Praha: C.H.Beck, 2009. ISBN 978-80-7400-152-9.

Recommended Reading:
SOLNIK, B. a .McLEAVY, D. Global investments. 6th ed. Boston: Pearson Prentice Hall, 2009. The Prentice Hall series in finance. ISBN 978-0-321-55212-9.
MELECKY, M. Choosing the currency structure for sovereign debt: A review of current approaches. World Bank Policy Research Working Paper, No. 4246. 2007. Washington: The World Bank.
Chapter 17 (Global Financial Crisis of 2008 and Beyond) in STONECASH, R., LIBICH, J., GANS, J, KING, S, BYFORD, M., and MANKIW, G. Principles of Macroeconomics: Australian Edition. 6th edition, South Melbourne: Cengage Learning Australia, 2014. ISBN 9780170248518, 536pp.
DURČÁKOVÁ, J. a MANDEL, M. Mezinárodní finance. 4. vyd. Praha: Management Press, 2010. ISBN 978-80-7261-221-5.
Planned learning activities and teaching methods
Lectures, Individual consultations
Assesment methods and criteria
Tasks are not Defined