Controllers Guide to Multinational Financial Management - v10 (Course Id 855)

Finance - Finance for Course Id 855

This course is designed for managers working for multinational companies (MNCs) as well as accountants, CFOs, controllers, treasurers, and international investors.  In a modern economy, neither businesses nor individual investors can afford to be ignorant of the basic concepts of international finance. Changes in exchange rates and differences in national inflation and interest rates can affect the competitive position of businesses regardless of whether they are engaged in international operations.

For companies that are engaged in international business, national differences in banking, commercial laws, regulations, and political stability also complicate decision making. Today’s investors must also understand the effects of, and interactions among, exchange rates, inflation rates, and interest rates if they wish to maximize their returns and minimize their risks.

The study of multinational finance constitutes an essential component of a modern business education. The subject multinational finance is offered in a variety of titles including international finance, global finance, international financial management, or financial management of multinational corporations, etc. at both the undergraduate and graduate levels.

Controllers’ Guide to Multinational Financial Management provides a clear and concise introduction to international finance.  This course is written and compiled for working professionals engaged in the fields of international finance, global trade, foreign investments, and banking.  It may be used for both day-to-day practice and for technical research. This course is a practical reference of proven techniques, strategies, and approaches that are successfully used by professionals to diagnose multinational finance and banking problems. The course covers virtually all important topics dealing with multinational business finance, investments, financial planning, financial economics, and banking. This course will benefit accountants, practicing financial analysts, CFOs, controllers, financial managers, treasurers, money managers, fund managers, investment analysts, and professional bankers, who are engaged in multinational operations.

Controllers’ Guide to Multinational Financial Management will enlighten the practitioner by presenting the most current information, offer important directives, and explain the technical procedures involved in the aforementioned dynamic business disciplines. The course applies to large, medium, or small multinational companies. It will help you to make smart decisions in all areas of international finance and banking.

You’ll find ratios, formulas, examples, applications, exhibits, charts, and rules of thumb to help you analyze and evaluate any global finance-related situation. 

NASBA QAS - Text - Technical - NASBA Registry - 855

Chapter 1
The What and Why of Multinational Finance

1. Recognize some special features of a multinational corporation (MNC).
2. Distinguish the factors that complicate financial decision making in an international environment.

Chapter 2
Foreign Exchange Rate Determination and Foreign Exchange Market

1. Define an exchange rate.
2. Recognize the different conventions for exchange rate quotation.
3. Compute the rate of exchange for a foreign.
4. Identify the functions of foreign exchange markets.

Chapter 3
Currency Exchange: Spot, Forward, and Futures Markets

1. Recognize definitions for spot and forward exchange rates.
2. Recognize how the bid/ask rates are used in the foreign exchanges.

Chapter 4
Currency Options

1. Recognize the nature of an option contract.
2. Identify the purpose of hedging in the foreign currency market.
3. Recognize factors in value determination of currency options.
4. Identify different foreign currency contracts and their uses.

Chapter 5
Determining Floating Exchange Rates

1. Recognize how exchange rates occur in the international monetary system.
2. Recognize how international markets influence of foreign exchange prices.
3. Recognize the impact of economic policies on trade patterns and currency markets.
4. Identify factors affecting the value of the US dollar.

Chapter 6
Government Intervention in Currency Markets

1. Identify the characteristics of the current international monetary system.
2. Recognize some systems of international exchange rate regulations such as the Bretton Woods System and the European Monetary System.
3. Identify characteristics of special international currency reserves such as special drawing rights.
4. Recognize the causes of the Financial Crisis 2007-2010.

Chapter 7
Determining Forward Exchange Rates

1. Identify the influence of interest rates on a country’s currency.
2. Recognize the implications of the interest rate parity (IRP) theory.
3. Identify the influence of interest rates on forward and spot exchange rates.

Chapter 8
Inflation Rates and Currency Values

1. Recognize the concept of purchasing power parity.
2. Identify the concept underlying the Law of One Price.

Chapter 9
International Capital Market Equilibrium

1. Recognize the relationship between interest rates and future exchange rate changes.
2. Identify the concept of the Fisher Effect and the relationship between real interest rates in different countries.

Chapter 10
Forecasting and the Efficiency of International Markets

1. Recognize the relationship between exchange rates, interest rate, and inflation rate as it relates to the financial market efficiency.
2. Identify how the efficient market hypothesis is used to predict the foreign exchange rates.

Chapter 11
Managing Foreign Transaction Exposure

1. Recognize the nature of transaction exposure.
2. Recognize how hedging techniques can decrease uncertainty.
3. Identify strategies for eliminating some transaction exposure.
4. Identify the contracts that can be used to hedge risk.

Chapter 12
Managing Translation Exposure

1. Define translation exposure as it relates to foreign currency exposure.
2. Recognize the functional currency of the firm.
3. Identify different methods for translating financial statements.

Chapter 13
Managing Operating Exposure

1. Recognize operating (economic) exposure as it relates to multinational, import-export, and purely domestic operations.
2. Identify methods and objectives for a company to minimize operating exposure from changes in various exchange rates.
3. Recognize strategies for controlling the degree of operating exposure to exchange rate changes.

Chapter 14
Exports and Imports Financing

1. Recognize the main documents that are used in international trade.
2. Identify the purpose of quasi-government institutions that help businesses control credit risk, such as the Foreign Credit Insurance Association.

Chapter 15
Working Capital Management

1. Identify organizational structures used by multinational companies to reduce their need for bank lending to support international cash flow.
2. Recognize the principle behind practices such as multilateral netting.
3. Recognize international business practices such as countertrade.

Chapter 16
Financing Globally

1. Recognize the attributes of international leasing.
2. Identify the special reasons for using Eurobonds rather than domestic bonds.

Chapter 17
Managing Political Risk

1. Identify some basic techniques that can be used to measure the probability and quantify the magnitude of political risk.
2. Recognize methods for reducing political risk prior to making foreign investments.

Chapter 18
Foreign Direct Investment

1. Identify the factors that distinguish capital budgeting decisions regarding foreign investment.
2. Recognize methods for evaluating proposed direct foreign investments.
3. Recognize the most frequently used methods of analyzing international capital budgeting.

Chapter 19
International Banking

1. Define a Eurodollar.
2. Recognize different types of multinational banking organizations.

Chapter 20
International Investing and Diversification

1. Recognize the advantages and limitations of international investing and diversification.
2. Compute the total return of an international investment.
3. Identify instruments designed to facilitate international investment.

Chapter 8:    Inflation Rates and Currency Values

Learning Objectives:

Exchange Rates, Inflation Rates, and Foreign Competition

Law of One Price and Purchasing Power Parity

Conclusion

Chapter 8 Review Questions

Chapter 9:    International Capital Market Equilibrium

Learning Objectives:

Fisher Effect

International Fisher Effect

The International Parity Conditions and the Global Fisher Effect

Conclusion

Chapter 9 Review Questions

Chapter 10:    Forecasting and the Efficiency of International Markets

Learning Objectives:

Why Forecast Exchange Rates?

Forecasts Implied by the Parity Conditions

Forecasting under a Managed or Fixed Exchange Rate System

A Framework for Evaluating Forecasts

Conclusion

Chapter 10 Review Questions

Chapter 11:    Managing Foreign Transaction Exposure

Learning Objectives:

Types of Foreign Exchange Exposure

Ways to Neutralize Foreign Exchange Risk (Currency Risk)

Nature of Transaction Exposure

Managing Short-Term Transaction Exposure

Managing Long-Term Transaction Exposure

Conclusion

Chapter 11 Review Questions

Chapter 12:    Managing Translation Exposure

Learning Objectives:

Nature of Translation Exposure

Translation of Foreign Currency Financial Statements

Hedging Translation Exposure

Conclusion

Chapter 12 Review Questions

Chapter 13:    Managing Operating Exposure

Learning Objectives:

Understanding Operating Exposure

Operating Versus Transaction and Translation Exposure

Methods of Reducing Operating Exposure

Conclusion

Chapter 13 Review Questions

Chapter 14:    Exports and Imports Financing

Learning Objectives:

International Credit Risk

The Letter of Credit System

Alternatives to the Letter of Credit

Government Guarantees and Insurance

Conclusion

Chapter 14 Review Questions

Chapter 15:    Working Capital Management

Learning Objectives:

Cash Management

Receivables and Payables

Inventory Management

Short-Term Borrowing

Conclusion

Chapter 15 Review Questions

Chapter 16:    Financing Globally

Learning Objectives:

Medium-Term Financing

Leasing

Long-Term Debt Financing

Equity Financing

International Sources of Financing

Conclusion

Chapter 16 Review Questions

Chapter 17:    Managing Political Risk

Learning Objectives:

Nature and Consequences of Political Risk

Measuring Political Risk

Managing Political Risk

Methods for Dealing with Political Risk

Conclusion

Chapter 17 Review Questions

Chapter 18:    Foreign Direct Investment

Learning Objectives:

The Theory of Comparative Advantage

Motives for Direct Foreign Investment

Methods of Direct Foreign Investment

International Capital Budgeting

Case Study

Conclusion

Chapter 18 Review Questions

Chapter 19:    International Banking

Learning Objectives:

Eurobanks and the Eurocurrency Markets

Multinational Banking Organizations

Central Bank Activities

European Monetary Union

Conclusion

Chapter 19 Review Questions

Chapter 20:    International Investing and Diversification

Learning Objectives:

Advantages of International Investing

Risks in Investing Globally

The Ways to Invest Globally

Buying Foreign Bonds

Investing in International Money Markets

Buying Shares of U.S.-Based Multinational Corporations

Investing in International Mutual and Index Funds

Features of the Various Types of International Funds

How Do You Select Funds?

Sources of Information

Conclusion

Chapter 20 Review Questions

Appendix A: International Business Planning Checklist

Appendix B: Walmart International Business Risks

Appendix C: Walt Disney Risk Management Contracts

Appendix D: FedEx Quantitative and Qualitative Disclosure about Foreign Currency Risk

Glossary