...International Finance: A Course Overview Mihir A. Desai* Harvard University and NBER ABSTRACT This paper describes the International Finance course at Harvard Business School for instructors considering adopting the associated material. The paper begins by arguing that the forces of globalization have fundamentally changed the scope and activities of firms thereby altering the practice of finance within these firms. As a consequence of an increasing reliance on tightly-integrated foreign operations, a parallel world of finance has been opened within every multinational firm and this world has, heretofore, been overlooked. The course materials are designed to address the many aspects of financial decision making within global firms prompted by these changes that are not addressed in traditional materials. The paper provides an overview of the structure of the course and its seven modules with particular emphasis on the three modules that constitute the core of the course. The paper also describes an analytical framework that has been developed through the creation of the course materials to guide critical financial decisions on financing, investment, risk management and incentive management within a multinational firm. This framework emphasizes the need to reconcile conflicting forces in order for multinational firms to gain competitive advantage from their internal capital markets. The paper concludes with a discussion of the course's pedagogical approach and detailed descriptions of...
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...fixed income ,FX and commodities markets and advising and intermediating for institutional investors in those markets. (2) Corporate Finance and public finance (often referred to as investment banking) advising corporations and governments on their financing needs, including the underwriting of securities, on their merger and acquisition activities, or on their restructuring. Securities and capital markets divisions Clients are usually * Institutional investors, corporates or public entities, not private clients; * Mutual funds asset managers; * Pension Fund asset managers; * The insurance companies; * Private Banks; * Hedge Funds; * The treasury departments of large banks or large companies. Capital markets divisions * Equity division: equity research, equity sales, equity trading on cash, flow derivatives and structured products * FIRC or FICC (Fixed Income, currencies and derivatives): * Fixed income cash products, interest and credit derivatives, structured products; * FX: all currency transactions, from plain vanilla spot currency trades to sophisticated derivatives; * Commodities. Investment banking divisions * M&A (Mergers and acquisitions); * Advising on and underwriting securities issues; * Advising on restructurings. Clients are usually government/public bodies, corporates (quoted and...
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...Global Financial Management FIN630 AIU Abstract This paper will have a comparative advantage of Vernon's product life-cycle theory of FDI. It will discuss green field investments over cross-border acquisitions and political risk of capital budgeting process of foreign investment projects. It will also discuss forward versus backward internalization and currency exchange risk into the capital budgeting process of foreign investment. Global Financial Management Vernon’s Product Life-Cycle Theory Raymond Vernon proposed his Product Life Cycle (PLC) theory in the mid 1960’s, based on product development and international trend observations of the US role at the time. The PLC theory stated that new products would first be developed and introduced in the US. Advanced markets, such as Europe and Japan, had their demand grow which caused the US to export the new product until the demand levels in the foreign country required the production in the advanced markets. Cost factors become significant as the product reached a maturity phase in the life cycle which warrants the production at the most efficient location. That results in advanced markets exporting the product back to the US. The product is produced in plants located in developing countries because these countries hold a relatively low cost production advantage, as competition further increased in the global market place. The product would once again be exported back to the US (Hill, 2009). Firms will commence...
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...List of Research Papers Related to Financial System Date | Title | Jun. 19, 2014 | Portfolio Rebalancing Following the Bank of Japan's Government Bond Purchases: A Fact Finding Analysis Using the Flow of Funds Accounts Statistics | Jun. 19, 2014 | Portfolio Rebalancing Following the Bank of Japan's Government Bond Purchases: Empirical Analysis Using Data on Bank Loans and Investment Flows | Apr. 23, 2014 | Financial System Report (April 2014) | Apr. 23, 2014 | New Financial Activity Indexes: Early Warning System for Financial Imbalances in Japan | Mar. 31, 2014 | Survey on Core Deposit Modeling in Japan: Toward Enhancing Asset Liability Management | Feb. 7, 2014 | Estimation of Firms' Default Rates in terms of Intangible Assets | Jan. 17, 2014 | Benchmarking of Unconditional VaR and ES Calculation Methods: A Comparative Simulation Analysis with Truncated Stable Distribution | Oct. 23, 2013 | Financial System Report (October 2013) | Sep. 24, 2013 | Risk Aggregation by a Copula with a Stressed Condition | Jul. 26, 2013 | Financial Results of Japan's Banks for Fiscal 2012 | May 2, 2013 | Identifying Conventional and Unconventional Monetary Policy Shocks: A Latent Threshold Approach | Apr. 17, 2013 | Financial System Report (April 2013) | Mar. 25, 2013 | Banks' Stockholdings and the Correlation between Bonds and Stocks: A Portfolio Theoretic Approach | Mar. 19, 2013 | What is the Major Determinant of Credit Flows through Cross-Border Banking...
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...BRAC University Journal, vol. V, no. 2, 2008, pp. 81-91 FOREIGN EXCHANGE RISK MANAGEMENT PRACTICES - A STUDY IN INDIAN SCENARIO Sathya Swaroop Debasish Department of Business Management Fakir Mohan University Vyasa Vihar, Balasore - 756019 Orissa, INDIA ABSTRACT Indian economy in the post-liberalisation era has witnessed increasing awareness of the need for introduction of various risk management products to enable hedging against market risk in a cost effective way. This industry-wide, cross-sectional study concentrates on recent foreign exchange risk management practices and derivatives product usage by large non-banking Indian-based firms. The study is exploratory in nature and aims at an understanding the risk appetite and FERM (Foreign Exchange Risk Management) practices of Indian corporate enterprises. This study focusses on the activity of end-users of financial derivatives and is confined to 501 non-banking corporate enterprises. A combination of simple random and judgement sampling was used for selecting the corporate enterprises and the major statistical tools used were Correlation and Factor analysis. The study finds wide usage of derivative products for risk management and the prime reason of hedging is reduction in volatility of cash flows. VAR (Value-at-Risk) technique was found to be the preferred method of risk evaluation by maximum number of Indian corporate. Further, in terms of the external techniques for risk hedging, the preference...
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...Curriculum Source References The following references were used in the CFA Institute-produced publications Quantitative Methods for Investment Analysis, Analysis of Equity Investments: Valuation, and Managing Investment Portfolios: A Dynamic Process. Ackerman, Carl, Richard McEnally, and David Ravenscraft. 1999. “The Performance of Hedge Funds: Risk, Return, and Incentives.” Journal of Finance. Vol. 54, No. 3: 833–874. ACLI Survey. 2003. The American Council of Life Insurers. Agarwal, Vikas and Narayan Naik. 2000. “Performance Evaluation of Hedge Funds with OptionBased and Buy-and-Hold Strategies.” Working Paper, London Business School. Ali, Paul Usman and Martin Gold. 2002. “An Appraisal of Socially Responsible Investments and Implications for Trustees and Other Investment Fiduciaries.” Working Paper, University of Melbourne. Almgren, Robert and Neil Chriss. 2000/2001. “Optimal Execution of Portfolio Transactions.” Journal of Risk. Vol. 3: 5–39. Altman, Edward I. 1968. “Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy.” Journal of Finance. Vol. 23: 589–699. Altman, Edward I. and Vellore M. Kishore. 1996. “Almost Everything You Wanted to Know about Recoveries on Defaulted Bonds.” Financial Analysts Journal. Vol. 52, No. 6: 57−63. Altman, Edward I., R. Haldeman, and P. Narayanan. 1977. “Zeta Analysis: A New Model to Identify Bankruptcy Risk of Corporations.” Journal of Banking and Finance. Vol. 1: 29−54. Ambachtsheer, Keith, Ronald Capelle, and...
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... chapter1 When Egypt fell under the rule of a Greek dynasty, the Ptolemies (332‐30 BC), the numerous scattered government granaries were transformed into a network of grain banks Greek and Roman link The Greeks coined money and developed a system of credit. The Roman Empire had a highly developed banking system, and its bankers accepted deposits of money, made loans, and purchased mortgages History of International Banking Collapsing Roman Empire in AD 476 was a major set back and banking declined in Europe. Italians are the first to have organised international banking due to the increase of trade in the 13th‐ century. The moneychangers of the Italian states developed facilities for exchanging local and foreign currency. As trade is growing, merchants demanded other services, such as lending money, and gradually bank services were expanded. Banking in the modern sense of the word can be traced to medieval and early Renaissance Italy, to the rich cities in the north such as Florence, Venice and Genoa. First reported international banks were established in Genoa, Milan, Venice and Florence in 12th Century According to the Encarta encyclopaedia the first bank to offer most of the basic banking functions known today was the Bank of Barcelona in Spain. This was founded by merchants in 1401. This bank held deposits, exchanged currency, and carried out lending operations. It also is believed to have introduced the bank check. Three other early banks, each managed by...
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...48% of global equity market as a whole. Therefore, extensive amount of studies have been conducted in order to identify the driving force behind the home bias. Based on the findings of the empirical studies, it reveals that the determinant of home bias can be conclude as high transaction cost and information asymmetric. One of the factor the cause the arisen of home bias is due to the high transaction cost. Transaction costs have been appeared in a few research papers but most of them have been ended with different conclusion. The research conducted by Domowitz, Glen, and Madhavan (1998) have classified the transaction cost into three components that is commission, fee and “market impact” cost. Market impact cost is defined as the expense incurred to the trader when trading a security. The cost often leads to a fluctuation in the market that will affect the market liquidity when the security is invested. However, some research argues that transaction costs are unlikely to explain the puzzle of home bias. In the research investigate by Tesar and...
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...3247960261 Accounting Capstone: Senior Seminar in Accounting ACC 499 005016 Winter Semester 2008 Submitted to Professor Tee Thein March 16, 2008 Dedication and Acknowledgement I would like to take this time to thank my husband, George, for all his support over this last ten weeks. For graciously doing the laundry, vacuuming, dusting, grocery shopping, meal preparing, and dishes so I had time complete the needed research for my paper. I appreciate the sacrifices you made to support me in my efforts of obtaining a Bachelors Degree in Accounting. Table of Contents Page Abstract 5 Chapter 1: Introduction 6 1.1 Background 6 1.2 Problem 7 1.3 Purpose 7 1.4 Scope 8 Chapter 2: Review of Literature 9 Chapter 3: Methodologies 12 3.1 Perspective 12 3.2 Research Procedure 12 Chapter 4: Development of Accounting Principles 17 4.1 History of Accounting Differences 17 4.1.1 Ancient Recordkeeping 17 4.1.2 Double-Entry Accounting 19 4.1.3 Beyond the Industrial Revolution 19 4.2 Influences on Accounting Standards 20 4.2.1 Culture 21 4.2.2 Legal System...
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...ABSTRACT Risk Management is the application of proactive strategy to plan, lead, organize, and control the wide variety of risks that are rushed into the fabric of an organization„s daily and long-term functioning. Like it or not, risk has a say in the achievement of our goals and in the overall success of an organization. Present paper is to make an attempt to identify the risks faced by the banking industry and the process of risk management. This paper also examined the different techniques adopted by banking industry for risk management. To achieve the objectives of the study data has been collected from secondary sources i.e., from Books, journals and online publications, identified various risks faced by the banks, developed the process of risk management and analyzed different risk management techniques. Finally it can be concluded that the banks should take risk more consciously, anticipates adverse changes and hedges accordingly, it becomes a source of competitive advantage, and efficient management of the banking industry. KEYWORDS: Risk Management, Banking Sector, Credit risk, Market risk, Operating Risk, Gab Analysis, Value at Risk (VatR) _____________________________________________________________________________________ INTRODUCTION Risk is defined as anything that can create hindrances in the way of achievement of certain objectives. It can be because of either internal factors or external factors, depending upon the type of risk that exists...
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...Course Paper Evaluation for Undergraduate Students |For teachers | | | | |Academic Year : 2012–2013 Semester: 1st [√ ] 2nd[ ] |Course Type : | | |Course Title __China’s foreign trade _ |Compulsory[ ] Optional[√] | | |Submission Date __Dec 5, 2012_ ____ | | | | |Mode of examination : | | | |Essay | |For Students |School International School Major IET | | |Name 謝玉麟 Student No. 2010054425 Mainland Student [ ] Non-mainland Student [√] | | |Essay topic Understanding China’s trade surplus | |Evaluations | ...
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...academic essays. The system embeds comments into your paper and suggests possible changes in grammar and style. Please evaluate each comment carefully to ensure that the suggested change is appropriate for your paper, but remember that your instructor's preferences for style and format prevail. You will also need to review your own citations and references since WritePoint capability in this area is limited. NOTE: WritePoint comments are computer-generated writing and grammar suggestions inviting the consideration and analysis of the writer; they are not infallible statements of right/wrong, and they should not be used as grading elements. Also, at present, WritePoint cannot detect quotations or block-quotes, so comments in those areas should be ignored. Please see the other helpful writing resources in the Tutorials and Guides section of the Center for Writing Excellence. Thank you for using WritePoint. The IASB and FASB have collaborated for the past 10 years. This collaboration was a goal toward convergence of U.S. generally accepted accounting principles (GAAP). The convergence project began with the two organizations conducting a joint meeting in Norwalk, Connecticut, on September 18, 2002. The goal for creating the convergence project was for the “development of high-quality compatible accounting standards that can be used for both domestic and cross-border financial reporting. They also promised to use their...
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...crises have been pervasive phenomena throughout history. Bordo et al. (2001) find that their frequency in recent decades has been double that of the Bretton Woods Period (1945-1971) and the Gold Standard Era (1880-1993), comparable only to the Great Depression. Nevertheless, the financial crisis that started in the summer of 2007 came as a great surprise to most people. What initially was seen as difficulties in the US subprime mortgage market, rapidly escalated and spilled over to financial markets all over the world. The crisis has changed the financial landscape worldwide and its costs are yet to be evaluated. The purpose of this paper is to concisely survey the literature on financial crises. Despite its severity and its ample effects, the current crisis is similar to past crises in many dimensions. In a recent series of papers, Reinhart and Rogoff (2008a, 2008b, 2009) document the effects of banking crises using an extensive data set of high and middle-to-low income countries. They find that systemic banking crises are typically preceded by credit booms and asset price bubbles. This is consistent with Herring and Wachter (2003) who show that many financial crises are the result of bubbles in real estate markets. In addition, Reinhart and Rogoff find that crises result, on average, in a 35% real drop in housing prices spread over a period of 6 years. Equity prices fall 55% over 3 ½ years. Output falls by 9% over two years, while unemployment rises 7% over a...
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...Othman Yeop Abdullah Graduate School of Business Graduate Universiti Utara Malaysia BDFM 7053 GLOBAL ECONOMIC THEORY AND ISSUES UUM-Rezzen KL Third Semester May Session 2013/2014 Prof Dr. K. Kuperan Viswanathan SHORT PAPER #1 INTERDEPENDENCE OF WORLD FINANCIAL MARKETS AND FOREIGN EXCHANGE FLUCTUATIONS Submitted by: ZAHARIN BIN ALI MATRIC No. 95906 June 14, 2014 Short Paper #1 Page |2 1. INTRODUCTION With the increase in advancements in transportation and communications made possible by technology, the world has seen exponential growths in economic ties among all nations. In the last few decades, globalization has resulted in a rapid surge in the interchanging of goods and services reaching across further and faster beyond national borders, whilst increasing the interconnectedness of different markets and cultures. These economic ties come in the forms of international trade, foreign direct investment and monetary integration, made possible with the complementary increase in the interdependence of international financial markets. With further liberalization and deregulation, financial market interdependence grew in momentum alongside the worldwide capital mobilization. This growing interconnectedness of all the world financial markets and the degree of their interdependence have themselves created a subject of substantial interest among economists. The recent global financial crisis has only elevated this interest further, as the impact of U.S. subprime...
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...COURSE SYLLABUS COURSE TITLE: MGT/448 Global Business Strategies LSB04BSM09 REQUIRED TEXT/MATERIAL: Books 1. The World Is Flat A Brief History of the Twenty-first Century (Friedman) 2. International Business: Competing in the Global Marketplace, 5/e (Hill) 3. The Lexus and the Olive Tree: Understanding Globalization (Friedman) 4. Managing Cultural Differences (Harris, Moran) 5. Global E-Commerce Strategies for Small Business, (Da Costa, Laffont, Tirole) Scholarly Articles 1. International Business: Environments and Operations, (Daniels, Radebaugh, Sullivan) Journal of Political Economy 2. International Real Business Cycles, (Backus, Kehoe and Kyland) Journal of Political Economy 3. Going global: Using information technology to advance the competitiveness of the virtual, (Boudreau, Loch, Robey, Straub) Academy of Management Executive 4. Working with Americans, (Thompson) The FLAME of Claremont Graduate University Websites: 1. Economist.com (The Economist Magazine) 2. FT.com (Financial Times Newspaper) 3. cia.gov/cia/publications/factbook (CIA world Fact Book) 4. loc.gov/rr/international/portals.html (Library of Congress Country Info) 5. windowontheworldinc.com/countryprofile/index.html (Tips for Global Business Etiquette 6. transparency.org (Transparency International) 7. scholar.google.com (Google for academic search) INSTRUCTOR: Taj Ahmad Eldridge, MBA, Ph.D Int’l Political Economics & World Politics candidate WELCOME: ...
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