Kursu reģistrs

Statuss(Aktīvs)

Course title	International Finance
Course code	EkonM007
Credit points (ECTS)	4
Total Hours in Course	108
Number of hours for lectures	20
Number of hours for seminars and practical classes	12
Number of hours for laboratory classes	0
Independent study hours	76
Date of course confirmation	19/12/2023
Responsible Unit	Institute of Economics and Finance

Course developers
Dr. oec., asoc. prof. Gunita Mazūre
Prior knowledge
Ekon5089, Macroeconomics Analysis
Replaced course
Ekon5042 [GEKO5042] International Finance
Course abstract
The course provides in-depth knowledge and detailed understanding of the theoretical and practical aspects of international finance. Students acquire knowledge about the principles of international payment flows, currency transactions and global financial markets operation, crowdfunding, P2P (peer-to-peer) lending platforms and other modern opportunities for investing and attracting financial resources. During the study course students acquire the theory of international monetary system, foreign exchange market operations, the activities of international financial institutions and derivatives as well as they master the ability to analyse the role of international monetary policy and financial institutions in shaping the international currency policy and assess the problems in the exchange rate and parity.
Learning outcomes and their assessment
Knowledge 1.Knowledge and understanding on the international financial environment and monetary system, exchange rate regimes, foreign exchange transactions and alternative ways for attracting financial resources – exam, independent task, discussions. 2.Knowledge and understanding on the operation of international financial institutions, derivatives and interbank foreign exchange markets in Latvia and in the world – exam, independent task, discussions. 3.Knowledge and understanding on the financial instruments of the European Union, the EU budget and protection of the EU financial interests – exam, group work, discussions. 4.Knowledge and understanding on the specifics of general government debt formation and the role of the balance of payments indicators in the reflection of international financial operations and management of the balance of payments – exam, independent task, discussions. Skills 1.Ability to perform foreign exchange calculations, analyse the monetary policy and the role of financial institutions in making foreign exchange policies, assess problems in the area of exchange rates and currency parity – exam, practical tasks. 2.Ability to reasonably discuss international financial aspects, alternative ways for attracting financial resources, draw economically feasible conclusions and provide proposals related to a problem examined – independent task, discussions. 3.Ability to review financial policy reports and the EU budget components, to do empirical research as well as analyse the balance of payments – practical tasks, discussions. 4.Ability to responsibly plan the completion of the assignments given – independent task. 5.Ability to engage in classwork and undertake responsibility for the analysis and results of the independent task as well as ability to present the results of independent task – independent task (presentation). Competence Ability to apply the acquired knowledge and practical skills to independently formulate and critically analyse aspects and problems of international finance in the economic and financial context – exam, independent task, presentations.
Course Content(Calendar)
Full-time studies: 1.International financial environment and economic relations (lectures – 2 h) The concept, essence and functions of the international financial environment. Basel Committee on Banking Supervision. Instant credit transfers. Electronic clearing and its process. 2.International monetary system, financial and currency elements (lectures – 2 h) Historical development of the international monetary system (Gold standard, Bretton Woods currency system, Jamaica monetary system, European Monetary System). Currency and financial elements of the international monetary system. 3.Foreign exchange market and its characteristics (lectures – 2 h) Basic principles of FOREX market operation. Fundamental and technical analysis of the foreign exchange market. Price trend formation and analysis methods. Common features and contradictions of trend models. 4.International parity, currency systems and exchange rate regimes (lectures – 2 h, practical work – 2 h) Basic principles of international parity. Interest rate parity. Principle of purchasing power parity. Fisher effect. Currencies, currency quotations and risk mitigation. Classification of the IMF exchange rate regimes. Factors influencing exchange rates. Normative theory and practical application of exchange rates. 5.Circulation of financial and non-financial assets in international markets and alternative means of raising funds (lectures – 3 h, practical work – 2 h) Monetary and non - monetary gold. Special Drawing Rights (SDR). Capital market and euro market. Digital currencies of central banks. Virtual and cryptocurrencies, their risks. Crowdfunding services: crowdfunding (Indiegogo, Kickstarter), peer-to-peer (Mintos, Twino etc.) loans and their platforms, real estate crowdfunding, equity crowdfunding. Venture capital funds. Private investors. 6.World market for financial derivatives or currency derivatives market (lectures – 2 h, practical work – 2 h) Historical origin, types and characteristics of financial derivatives. Over-the-counter financial forward contracts. Standardised financial derivatives (futures). Options. Monte Carlo imitation model. Swaps. IRS transactions. 7.International financial institutions, their activities and functions (lectures – 2 h, practical work – 1 h) Structure of the system of international institutions. International multifunctional organisations, trade and regional organisations. World Bank Group. International Monetary Fund. Bank for International Settlements. European Central Bank. European Bank for Reconstruction and Development. European Investment Bank. 8.European Union financial instruments, the EU budget and protection of the EU financial interests, the EU territorial cooperation programmes. Veto rights of the Member States in decisions on allocation of funds and resolution of conflict situations (lectures – 3 h, practical work – 3 h) 9.International capital mobility, capital management, payment flows and indebtedness (lectures – 2 h, practical work – 2 h) Forms and types of international credits. Balance of payments, its accounts and indicators. The role of balance of payments indicators in the reflection of international financial operations and balance of payments management. International investment position. Central government debt, external and internal debt of the government, debt structure and monitoring.
Requirements for awarding credit points
1.Use of the EU financial instruments in the Member States – independent work (presentation – 15%). 2.Alternative financing options, investor success stories – situation analysis (independent work – 15%). 3.Research on the selected study course topic, which includes practical aspects of the topic, conclusions and proposals – independent work (presentation –25%). 4.Activity in classes (5%). 5.Written exam – all topics (40%).
Description of the organization and tasks of students’ independent work
1)getting ready for the exam by studying both lecture materials and sources indicated in the list of literature; 2)study of the EU financial instruments – selection of one fund or programme, analysis of the rules for granting funds and the amount of funding (8-10 min presentation); 3)selection of one alternative financing option, venture fund or investor and study of the success of its operation (discussion or presentation at the student’s choice); 4)study of a freely chosen topic from the study course topics, which is researched in detail (criteria are indicated in e-studies) and presented (10 min) during the class time specified by the teacher.
Criteria for Evaluating Learning Outcomes
The grade of the course exam depends on the cumulative assessment of the exam and the independent works of the course, 10% corresponds to one point on the 10-point assessment scale. A student receives a successful grade for the exam test if at least 40% of the exam tasks are completed correctly. Presentations are assessed according to the established criteria. Re-defending of the presented works is not provided.
Compulsory reading
1.Rupeika-Apoga R., Zelgalve E. Finanšu tirgus un tā analīzes metodes. Rīga: LU Akadēmiskais apgāds, 2009, 117 lpp. 2.Avotiņš I., Zvirgzdiņa R. Valsts parāda vērtspapīru plūsmas vadības pilnveidošanas iespējas Latvijā, 2020, 254 lpp. 3.Vaidere I. Starptautiskās valūtas attiecības. Rīga: LU Akadēmiskais apgāds, 2015, 141 lpp. 4.Krugman P.R., Obstfeld M., Melitz M. International Finance: Theory and Policy, 11th edition, 2019, p. 466. 5.Nevo, D. & Kotlarsky, J. (2020). Crowdsourcing as strategic IS sourcing phenomenon: Critical review and insights for future research. The Journal of Strategic Information Systems. 29 (4). 6.Bekaert, G., Hodrick, R. International Financial Management. 3rd edition, Prentice Hall, 2014, p. 1002. 7.Eiteman, D.K, Stonehill A. I., Moffett M.H., Fundamentals of Multinational Finance. 4th Edition, Prentice Hall, 2012, p.544. 8.Eiteman, D.K, Stonehill A. I. & Moffett M.H. Multinational Business Finance. 14th Edition, Prentice Hall, 2016, p. 567.
Further reading
1.Zlobins A. (2020). Viņpus nulles zemākās robežas: zemu un negatīvu procentu likmju reālā un finansiālā ietekme eiro zonā. Latvijas Bankas pētījums 6/2020. Pieejams: https://datnes.latvijasbanka.lv/petijumi/p_6_2020_lv.pdf 2.Kirton J., Farnham S., Burligton, VT. International Finance. 2009, p. 555. 3.Levi M.D. International Finance. USA: Routledge, 5th Edition, 2009, p. 567. 4.Moffett M., Stonehill A., Eiteman D. Fundamentals of Multinational Finance. USA: Prentice Hall, 2011, p. 704. 5.Praude V. Finanšu instrumenti. I: ieguldījumi, darījumi, analīze. Rīga: Burtene, 2009, 446 lpp. 6.Praude V. Finanšu instrumenti. II: ieguldījumi, darījumi, analīze. Rīga: Burtene, 2010, 487 lpp. 7.Rupeika-Apoga R. Tirdzniecība ar valūtu kā uzņēmējdarbības veids. Rīga, 2006, 335 lpp. 8.Stehrer R., Stöllinger R., Hunya G., Hanzl-Weiss D., Holzner M., Reiter O. (2020). How EU funds tackle economic divide in the European Union. Brussels: Policy Department for Budgetary Affairs, p. 106 Pieejams: file:///C:/Users/sony/Downloads/QA0120575ENN.en.pdf
Periodicals and other sources
1.Bank for International Settlement: Foreign Exchange and Derivatives Reports, Annual Reports. Pieejams http://www.bis.org. 2.Financial Times / laikraksts. Financial Times. England based finance newspaper. London: The Financial Times Ltd. Pieejams: http://www.ft.com/home/europe. 3.Forbes / žurnāls. Rīga: SK Media. 4.International Monetary Fund / International Monetary Fund: Annual Reports, International Financial Statistics, Working Papers, World Economic Outlook. Pieejams: http://www.imf.org/external/index.htm. 5.Latvijas Banka / Latvijas Bankas publikācijas. Pieejams: https://www.bank.lv/par-mums/struktura/270-aktualitates/publikacijas 6.Eiropas Savienības budžets. Pieejams: https://european-union.europa.eu/institutions-law-budget/budget_lv 7.ES fondi. Pieejams: https://www.fm.gov.lv/lv/es-un-cits-atbalsts. 8.The Economist / nedēļas laikraksts. The Economist. London: Economist Newspaper Ltd. Pieejams: http://www.economist.com. 9.World Bank / World Bank: Annual Reports. Pieejams: https://www.worldbank.org/en/about/annual-report. 10.Starptautiskās finanšu un ekonomiskās attiecības: rakstu krājums. Rīga: Latvijas Nacionālā bibliotēka, 2019, 111 lpp.
Notes
Restricted elective study course for the specialisation direction “Financial Management and Accounting” of the academic Master study programme “Economics”