ECX2721

Trade finance and foreign exchange

Dr Mita Bhattacharya

6 points · 3 hours per week · First/second semester · Caulfield, Peninsula · Prerequisite ECX1710

Objectives On completion of this subject a student should be able to understand and explain the concept of payments among nations and macroeconomic policies to adjust balance of payments disequilibrium; operation of foreign exchange markets and alternative exchange rate systems; methods of managing foreign exchange risk and operating exposure; mechanisms for financing international trade; roles of euromarket, medium and short term international financing; multinational corporations in international trade; international monetary system.

Synopsis The globalisation of business has enhanced the importance of international trade and finance. This subject provides an understanding of international economics and finance with emphasis on foreign exchange markets and focuses on the topics of international finance; the balance of payments accounts; the effect of macroeconomic policies on trade balance; foreign exchange markets - spot, forward, futures and options markets; the determination of exchange rates; parity conditions; hedging and speculating in foreign exchange markets and exposure, foreign investment; euromarket; aspects of short-term and medium-term financing and international monetary system.

Assessment Major report (3000 words): 25% · Tutorial exercises: 15% · Examination (2 hours): 60%

Prescribed texts

To be advised

Back to the 1999 Business and Economics Handbook