ECW2721

Trade finance and foreign exchange

Dr Mita Bhattacharya

6 points · 3 hours per week · Prerequisite: ECW1710 or ECW1010

Objectives On completion of this subject a student should be able to understand the operation of foreign exchange markets and alternative exchange rate systems; appreciate the methods of managing foreign exchange risk and operating exposure; understand the mechanism for financing international trade; appreciate the roles of short and long term international financing.

Synopsis The importance of international finance; foreign exchange markets - spot, forward, futures and options markets; the determination of exchange rates; purchasing power parity and interest rate parity; hedging and speculating in foreign exchange markets, Eurodollars and Euro-currencies; aspects of short term and long term financing; operating exposure.

Assessment Major essay (1500 words): 20% · Tutorial exercises: 10% · Examination (2 hours): 70%

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