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Controllers Guide to Multinational Financial Management - v12 (Course Id 855)

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Author : Jae K. Shim, Ph.D., CPA
Course Length : Pages: 186 ||| Review Questions: 72 ||| Final Exam Questions: 70
CPE Credits : 14.0
IRS Credits : 0
Price : $113.95
Passing Score : 70%
Course Type: NASBA QAS - Text - Technical - NASBA Registry
Primary Subject-Field Of Study:

Finance - Finance for Course Id 855

Description :

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 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. 

Usage Rank : 0
Release : 2022
Version : 1.0
Prerequisites : None.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : QAS Self Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 20-Feb-2023
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - Text - Technical - NASBA Registry - 855

Keywords : Finance, Controllers, Guide, Multinational, Financial, Management, v12, cpe, cpa, online course
Learning Objectives :

Chapter 1
Essence of Multinational Finance

After completing this section, you should be able to:
    1. Recognize some special features of a multinational corporation
    2. Distinguish the factors that complicate financial decision making in an international environment

Chapter 2
Currency Exchange Rate

After completing this section, you should be able to:
    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
Spot, Forward, and Futures Markets

After completing this section, you should be able to:
    1. Recognize definitions for spot and forward exchange rates.
    2. Recognize how the bid/ask rates are used in foreign exchanges.

Chapter 4
Currency Options

After completing this section, you should be able to:
    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
Floating Exchange Rates

After completing this section, you should be able to:
    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

After completing this section, you should be able to:
    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
Forward Exchange Rates

After completing this section, you should be able to:
    1. Identify the influence of interest rates on a countrys 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

After completing this section, you should be able to:
    1. Recognize the concept of purchasing power parity.
    2. Identify the concept underlying the Law of One Price.

Chapter 9
International Capital Market Equilibrium

After completing this section, you should be able to:
    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

After completing this section, you should be able to:
    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
Foreign Transaction Exposure Management

After completing this section, you should be able to:
    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
Foreign Translation Exposure Management

After completing this section, you should be able to:
    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
Foreign Operating Exposure Management

After completing this section, you should be able to:
    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

After completing this section, you should be able to:
    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

After completing this section, you should be able to:
    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
Global Financing

After completing this section, you should be able to:
    1. Recognize the attributes of international leasing.
    2. Identify the special reasons for using Eurobonds rather than domestic bonds.

Chapter 17
Political Risk Management

After completing this section, you should be able to:
    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

After completing this section, you should be able to:
    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

After completing this section, you should be able to:
    1. Define a Eurodollar.
    2. Recognize different types of multinational banking organizations.

Chapter 20
International Investing and Diversification

After completing this section, you should be able to:
    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.
Course Contents :

Chapter 1:    Essence of Multinational Finance

Learning Objectives

Importance of

International Financial Management

Benefits of International Finance

Multinational Companies

Foreign Competition

International Investors

Types of International Risks

Currency Risk

Political and Credit Risks

Conclusion

Chapter 1 Review Questions

Chapter 2:    Currency Exchange Rate

Learning Objectives

Exchange Rate Determination

Ratios of Currency Exchange

Direct and Indirect Quotation

Interrelated Sets of Prices

Foreign Exchange Market

Appreciation of the Dollar

Conclusion

Chapter 2 Review Questions

Chapter 3:    Spot, Forward, and Futures Markets

Learning Objectives

Fundamentals

Spot vs. Forward Foreign Exchange Trading

Bid and Offer Rates

Bid/Ask Spreads

Determinants of the Spread

Forward Contracts

Currency Futures Contracts

Contract Specifications

Trading Currency Futures

Conclusion

Chapter 3 Review Questions

Chapter 4:    Currency Options

Learning Objectives

Fundamentals

Nature of Options Contracts

Trading in Options Contracts

Call vs. Put Call Options

Currency Options vs. Current Futures

Determinants of Option Prices

Value of Call Options

Value of Put Options

Types of Foreign Currency Options Markets

Speculations in Options

Buyer of a Call

Writer of a Call

Buyer of a Put

Writer of a Put

Option Pricing and Valuation

Key Concepts

Pricing Sensitivity

Conclusion

Chapter 4 Review Questions

Chapter 5:    Floating Exchange Rates

Learning Objectives

Foreign Trade

Effect of Imports

Effect of Exports

Determination of Exchange Rate

International Borrowing and Lending

Effect of Borrowing

Effect of Lending

Balance of Payments

Conclusion

Chapter 5 Review Questions

Chapter 6:    Government Intervention in Currency Markets

Learning Objectives

Fundamentals

Direct Intervention

Indirect Intervention

Monetary Policy

Fiscal Policy

Jawboning

Multinational Arrangements

The Gold Standard

Bretton Woods

International Monetary Fund

European Monetary System


The Financial Crisis 2007-2010

Conclusion

Chapter 6 Review Questions

Chapter 7:    Forward Exchange Rates

Learning Objectives

Exchange Rate Speculation

Unbiased Predictors of Future Spot Rates

Impacts of Interest Rate

Interest Rate Arbitrage

Interest Rate Parity

Deviations from Interest Rate Parity

Conclusion

Chapter 7 Review Questions

Chapter 8:    Inflation Rates and Currency Values

Learning Objectives

Fundamentals

Law of One Price and Purchasing Power Parity

Law of One Price - Absolute PPP

Purchasing Power Parity

Deviations from 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

Needs to Forecast Exchange Rates

Forecasts Implied by the Parity Conditions

Interest Rate Parity Theory

Fisher Price Effect

Purchasing Power Parity

Forecasting Techniques

Fundamental Forecasting

Market Based Forecasting

Technical Forecasting

Mixed Forecasting

Fixed Exchange Rate System

A Framework for Evaluating Forecasts

Currency Forecasting Service

Efficient Markets Hypothesis

Conclusion

Chapter 10 Review Questions

Chapter 11:    Foreign Transaction Exposure Management

Learning Objectives

Fundamentals

Types of Foreign Exchange Exposure

Ways to Neutralize Exchange Risk

Nature of Transaction Exposure

Techniques to Manage Short-Term Transaction Exposure

Forward Contracts

Futures Contracts

Money Market Hedges

Use of Options

Cross Hedging

Techniques to Manage Long-Term Transaction Exposure

Parallel Loans

Currency Swaps

Credit Swaps

Conclusion

Chapter 11 Review Questions

Chapter 12:    Foreign Translation Exposure Mangement

Learning Objectives

Nature of Translation Exposure

Translation of Foreign Currency Financial Statements

Determination of the Functional Currency

Use of Translation Procedures

Use of Remeasurement Procedures

Techniques to Manage Translation Exposure

Conclusion

Chapter 12 Review Questions

Chapter 13:    Foreign Operating Exposure Management

Learning Objectives

Fundamentals

Nature of Operating Exposure

Causes of Operating Exposure

In Relation to Transaction and Translation Exposure

Techniques to Manage Operating Exposure

Matching Cash Flows

Global Diversification

Financing Strategies

Conclusion

Chapter 13 Review Questions

Chapter 14:    Exports and Imports Financing

Learning Objectives

International Credit Risk

Types of Letter of Credit

Letter of Credit Process

Functions

Documents Required

Banker's Acceptances

Summary

Alternatives to the Letter of Credit

Forfaiting

Government Guarantees and Insurance

Conclusion

Chapter 14 Review Questions

Chapter 15:    Working Capital Management

Learning Objectives

Cash Management

Remittances

Marketable Securities

Receivables and Payables

Factoring

Countertrade

Inventory Management

Advance Purchase and Stockpiling

Transfer Pricing

Free-trade Zones

Short-Term Borrowing

Euronotes and Euro Commercial Paper

Fronting Loans

Conclusion

Chapter 15 Review Questions

Chapter 16:    Global Financing

Learning Objectives

Medium-Term Financing

Leasing

Long-Term Debt Financing

Foreign Bonds

Eurobonds

Equity Financing

Benefits

Sources of Funds

Conclusion

Chapter 16 Review Questions

Chapter 17:    Political Risk Management

Learning Objectives

Impacts of Political Risks

Expropriation

Nationalization

Government Interference

Taxation

Political Risk Measures

Macro-Level Assessment

Subjective Methods

Quantitative Methods

Techniques to Manage Political Risk

Prior to Investing

During Operations

Subsequent to Seizure

Risk Responses

Conclusion

Chapter 17 Review Questions

Chapter 18:    Foreign Direct Investment

Learning Objectives:

Fundamentals

Theory of Comparative Advantage

Nature of Foreign Direct Investment

Methods of Direct Foreign Investment

Motives for Direct Foreign Investment

Political Motives

Economic Motives

Competitive Motives

International Capital Budgeting

Value of Foreign Currency Cash Flows

Net Present Value

Internal Rate of Return

Adjusted Present Value

Comprehensive Illustration

Conclusion

Chapter 18 Review Questions

Chapter 19:    International Banking

Learning Objectives:

Eurobanks and the Eurocurrency Markets

Multinational Banking Structures

Correspondent Banks

Affiliate Banks

Consortiums and Syndicates

Subsidiary Banks

Edge Act Corporations

International Banking Facilities

Foreign Branches

Resident Representatives and Banking Agencies

Central Banking System

International Monetary Fund

Development Banks

European Monetary Union

Conclusion

Chapter 19 Review Questions

Chapter 20:    International Investing and Diversification

Learning Objectives:

Advantages of International Investing

Broader Stock Selection

Higher Prospective Returns

Reduction of Risk

Limitations of International Investing

Currency Risk

Political Risk

Institutional Obstacles

Ways to Invest Globally

Foreign Securities

American Depositary Receipts

Closed-End Funds

Exchange-Traded Funds

Mutual Funds

International Bonds

Foreign Convertibles

International Money Markets

Shares of U.S.-Based Multinational Corporations

International Mutual and Index Funds

Types of International Funds

Sources of Information

Conclusion

Chapter 20 Review Questions

Appendix A: International Business Planning Checklist

Appendix B: Use of Derivatives

Appendix C: Use of Currency Swap

Appendix D: Risks Related to International Operations and Financial Results

Glossary

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