International Monetary Systems and Hedging

  • 7-weeks
  • 1.5 credits
  • Prerequisite: MBA Core

The purpose of this module is to prepare you to understand global monetary and financial phenomena. The selected topics are chosen for their practical relevance. We will study different monetary arrangements in the past and present, analyze the very nature of the foreign exchange market, explore forward market instruments, identify different kinds of exchange rate risks for firms and ways to hedge these risks. We will analyze exchange rate and interest policies and try to understand the causes and consequences of international currency crises.

Throughout this module you are encouraged to combine economic analysis with practical experience and application. The economics material is based on the basic reading assignment, see below, Powerpoint slides, and class notes. Class notes do not substitute, but rather complete the text book. I use them to present additional material, to offer more technical in-depth analysis, and to stress aspects that are crucial for the understanding of the topic. Practical applications will come primarily through a set of case studies, exercises (group assignments), and on the basis of classroom discussion of current events.

  1. Past and Present International Monetary Arrangements
  2. Balance of Payments and Country Risk
  3. The Foreign Exchange Market and
  4. Types of Exchange Rate Risk
  5. Parity Concepts and their Limitations
  6. Forward-Looking Market Instruments
  7. Translation Exposure
  8. Transaction and Economic Exposure

The required text is G593 custom CoursePack.