6 points, SCA Band 2, 0.125 EFTSL
Undergraduate - Unit
Refer to the specific census and withdrawal dates for the semester(s) in which this unit is offered.
- First semester 2017 (Day)
- Second semester 2017 (Day)
Topics covered in this unit include the international financial system and the various types of exchange rate systems that exist around the world. Also included is the theory of the determination of exchange rates, as well as an analysis of the extent to which these theories hold in practice. A major topic area is the measurement and management of firms' foreign exchange rate risk, including theory relating to the importance of hedging against exchange risks, and the complexities involved in assessing and managing exchange rate risks in a globally connected world. In discussing the management of foreign currency transactions, the use of hedging tools such as currency futures, options and swaps is covered. The final topic is international portfolio management.
The learning goals associated with this unit are:
- analyse and evaluate the benefits and disadvantages of the various exchange rate systems
- critically appraise the extent to which the theories of exchange rate determination explain exchange rate movements in today's globalised economy
- explain the various tools and approaches for firms in hedging transaction exchange exposure, and recommend the most appropriate approach to hedging in a variety of economic and firm-specific circumstances
- analyse the extent to which firms are exposed to economic or operating exchange risk, evaluate their systems in place to manage it, and recommend alternative approaches
- appraise the benefits of international portfolio investment vis-a-vis domestic-only diversification
- apply critical thinking, problem solving and presentation skills to individual and/or group activities dealing with international finance and demonstrate in an individual summative assessment task the acquisition of a comprehensive understanding of the topics covered by BFC3240.
Within semester assessment: 40% + Examination: 60%
Minimum total expected workload to achieve the learning outcomes for this unit is 144 hours per semester typically comprising a mixture of scheduled learning activities and independent study. Independent study may include associated readings, assessment and preparation for scheduled activities. The unit requires on average three/four hours of scheduled activities per week. Scheduled activities may include a combination of teacher directed learning, peer directed learning and online engagement.
See also Unit timetable information
AFC2140 or BFC2140