25752 - International Finance

Learning outcomes

At the completion of the course, students will have a thorough knowledge of concepts and analytical techniques in financial management, and they will be able to apply them to nowadays international market transactions. This includes the ability to understand the governance of multinational companies, and their investing, financing, and risk management decisions, in a perspective of maximising the value to their shareholders.

Course contents

This course examines how exchange rates are determined, how different currency regimes function, and how multinational firms make investment and financing decisions in a global context. Students will connect theoretical models to real-world scenarios and develop the skills needed to analyze policy choices, manage foreign exchange risk, and evaluate cross-border financial strategies.

The course will cover five main thematic blocs.

1. Foundations of International Finance introduces the unique nature and scope of international financial decisions, the institutional environment and payment systems, and core frameworks - such as, the balance of payments and exchange rate determination, including trade elasticities and the J-curve effects (Module 1).
2. The Currency Markets bloc covers the functioning of spot and forward markets, pricing relationships such as covered interest parity, and practical uses of forwards and other basic derivatives for managing currency exposure (Module 1).
3. Measuring and Managing Exchange Rate Exposure develops the tools needed to identify, quantify, and hedge transaction, operating, and translation exposures, including regression methods and Value-at-Risk (Module 1).
4. International Funding and Capital Structure: how multinational firms access international funding, focusing on bond and equity markets, alternative financing for start-ups, capital structure and project evaluation, and the role of global financial institutions (Module 2).
5. International Investment, Risk and Geopolitical Challenges: analysis of international investment and risk, including foreign direct investment and joint ventures, international taxation and OECD reforms, country and political risk, integrated project evaluation, and the impact of sanctions and trade tariffs on global finance (Module 2).

Readings/Bibliography

Primary Textbooks:

• Sercu, P. (2009). International Finance. Princeton University Press.
• Levi, M. D. (2009). International Finance (5th ed.). Routledge.
• Chinn, M. D., & Irwin, D. A. (2025). International Finance. Cambridge Books. 

Additional Resources:

• Lecture slides & practices exercises.
• Question bank for exam preparation.
• Booklet materials.

Teaching methods

Theoretical Sessions:
Each lecture introduces core concepts, models, and frameworks based on the textbook and scholarly research.

Traditional Tutorials:
Computations and model implementation to get prepared for the written exam.

Empirical Sessions:
Students will apply theory to real data using financial data tools: e.g., analyzing historical returns, CAPM estimations (e.g., Excel/STATA).

Assessment methods

Overall, there will be one single exam covering both modules, which share the same evaluation criteria. Students may sit the exam in two partial assessments or take the final exam directly during the canonical exam sessions scheduled for January-February, June-July, and September.

Particularly, the student can undertake a:

• First Midterm (50%): an intermediate written assessment held after the end of the first module. It refers to the first block, on International Finance, and accounts for 50% of the final grade.
• Second Midterm (50%): a written assessment held at the end of the second module, covering the second half of the course. It accounts for the remaining 50% of the final grade.

Alternatively, they may undertake the

• Final Exam (100%): students who prefer not to sit the two midterm exams may take the final exam directly, in which case it covers the entire course and determines the full grade. The exam is a written assessment that includes both multiple-choice and open-ended questions, covering theoretical concepts as well as practical exercises. The multiple-choice section consists of 11 questions worth 2 points each. The open-ended section includes 3 questions worth 3 points each. The exam duration is 60 minutes.

On top of this assessment, the students may take 4 bonus points based on the performance linked to:

• Team Work Assignment: students will work in teams to apply the methodologies learned during the course and will present the results of their research to both instructors at the end of the course. The team work assignment awards a maximum of 1 to 3 points, added on top of the final course evaluation. No bloc quizzes will be held this year.
  
  
• Class Participation and Contribution: a one-point bonus on top of the final evaluation may be awarded for active participation in the discussion of the literature during case-based sessions. The bonus is not granted on the basis of mere attendance.

The final grade is measured on a 31-point scale; achieving the maximum score of 31 grants the student the cum laude honor.

Assessment Grid:

• (a) less than 18: insufficient
• (b) 18–23: sufficient
• (c) 24–27: average/good
• (d) 28–30: very good
• (e) 30 cum laude: excellent/outstanding

Teaching tools

To support learning, the course will make use of various resources, including:

• Teaching slides covering key theories, models, and examples.

• Financial news and press release websites for up-to-date market developments.

• Specialized financial websites and databases for empirical data and real-world applications.

• Research articles from top leading outlets.

Links to further information

https://www.unibo.it/it/studiare/insegnamenti-competenze-trasversali-moocs/insegnamenti/insegnamento/2026/516020

Office hours

See the website of Giovanni Cardillo

See the website of Giacomo Andreani