The course aims to provide students with basic knowledge, both theoretically and practically, on the working of macroeconomic policies in an open economy, the international monetary syst
Trang 1DESCRIPTION OF DETAILED OVERVIEW
OF INTERNATIONAL FINANCE SUBJECT
1 Subject’s name: International Finance
2 Number of subject units: 03
3 Objective of the subject:
The course is designed for undergraduate students at International Economics and Finance & Banking The course aims to provide students with basic knowledge, both theoretically and practically, on the working of macroeconomic policies in an open economy, the international monetary system, and the determination of the exchange rate
in the short-run and long-run The course aims to keep an appropriate balance between theoretical discussion and practical issues with particular attention given to Vietnam’s current economic and policy issues The subject also helps students to improve their English capabilities
4 Training Speciality:
In using the teaching and learning methods such as in-class discussions, homework, group assignment, students are required to develop and enhance their interpersonal skills and attributes among the levels of proficiency 1 (to be able to recall),
2 (to be able to understand and apply) and 3 (to be able to analyze and evaluate): teamwork, communications and communication in English
In completing the group assignment, discussions and presentation (but not limit to), students are able to identify the international financial issues; design the appropriate economic tools and models; assess the benefits and limitations of that tools and models in providing answers or solutions to questions or problems emerging from international financial activity
5 Qualification: Third-year students
6 Time Allocation: 60 periods, in which:
- Theory: 42 periods
- Exercise: 9 periods
- Discussion: 7 periods
- Test: 2 periods
7 Priority Condition:
Trang 2This subject will be delivered after the student fully attended to the following subjects: Monetary and Finance, The Theory of Security Market, Macroeconomics, International Economics
8 Brief of the subject:
- General knowledge on international finance
- Foreign exchange and content of the balance of payment
- Forex market and transactions on the FX market
- Direct and indirect foreign investment
- Official development assistance and Tariff
- The international union of Taxation
- Some international financial institutes and relationship with Vietnam
9 Student’s responsibilities:
- Attend to 100% classes
- Finish exercise, assignment
- Discuss in group
- Attend to the mid-term test and final exam
10 Material and Facilities:
- Compulsory documents:
+ International Finance Textbook in English and Vietnamese
+ Questions list and exercise of International Finance
- Reference documents:
+ International Investment Textbook, Academy of Finance
+Websites: www.mpi.gov.vn; www.mof.gov.vn; www.worldbank.org.vn; www.adb.org; …
11 Criteria for Student Assessment:
- Class attendance time as required by the regulations
- Learning Attitude
- Attend to mid-term test
- Form of exam: In writing and oral exam
Trang 3Content in detail N o of
Periods Chapter 1: AN OVERVIEW OF INTERNATIONAL FINANCE 3
This chapter is
designed to show
some main ideas of
international
finance, including
basic conditions for
international finance
to appear and exist;
characteristic of
international
finance; relationship
in this field as well
as roles and trends
of international
finance
After finishing
this chapter, the
student should
generally issues of
international finance
that would be
appear in the next
chapter This
chapter will be
discussed in 3
periods
1.1. CONCEPTS AND CHARACTERISTICS OF
INTERNATIONAL FINANCE
- The appearing and existing conditions of international finance
- Concepts of international finance
- Characteristics of international finance: Broad scope, risks, involving in difference currencies, being affected by the level of market imperfections, …
1.2. ROLES OF INTERNATIONAL FINANCE
- Exploit the external resources to finance for developing the economy
- Impulse the integration to the international economy
- Enhance the effectiveness of utilization of finance resources
INTERNATIONAL FINANCE
- In terms of monetary relations
- In terms of international financial activities 1.4. THE INFLUENCE OF MAJOR TRENDS OF
THE WORLD ECONOMY
- The emergence of globalized financial markets
- The emergence of the Euro as a global currency
- Trade liberalization and economic integration
- Privatization wave
Chapter 2: EXCHANGE RATE AND THE BALANCE OF PAYMENT 9
In this chapter,
students must
understand the
definition and the
2.1.1 Concept
- Common understanding of exchange rate
- Direct quotation and indirect quotation
Trang 4role of exchange
rate in market
economy Besides,
students must define
three methods to
calculate exchange
rate and its
advantages and
drawback of each as
well
Beside some
factors that affect to
exchange rate,
student also explain
the basically the
mechanism of each
factors which
creating the change
in exchange rate
The other objective
of this chapter is
that student can
understand basically
about balance of
components, role in
economy
2.1.2. Determination method of exchange rate
- Exchange rate determination under the gold standard of currencies
- Exchange rate determination under the Purchasing power parity
- Exchange rate determination under cross exchange rate approach
2.1.3. Factors affecting exchange rate
- The difference in inflation rate among currencies
- The fluctuation in supply and demand of foreign in the foreign exchange market
- The Government’s interference
- Public psychology
- The fluctuation in interest rate of currencies
- The international monetary speculation 2.1.4. Regimes of exchange rate
- Concept of exchange rate regime
- Types of exchange rate regime
o Based on the number of exchange rate types
o Based on the degree of flexibility of exchange rate applied
2.2. THE BALANCE OF PAYMENT 2.2.1 Concept and some implications
- Exchange transactions
- Resident and non-resident
- The reporting period
- Currency used to record in the BOP 2.2.2. Contents of balance of payment
- Current account
- Capital and financial account
- Overal balance
- Errors and omissions
- Official financing balance 2.2.3. Principles in recording the balance of payment
- Double-entry principle
- Change of ownership
- Market value 2.2.4. The surplus and deficit of the balance of
payments
Trang 5Chapter 3: INTERNATIONAL FINANCIAL MARKET 9
The need for
the international
financial market
arises in order to
ensure that funds
are transferred
efficiently from
surplus units to
deficits units over
the world
In this chapter,
student would
understand why and
international
financial market
exist and maintain
its roles Besides
understanding two
international
financial market,
namely international
international capital
market, students
would understand
transactions and its
mechanism in basic
in both markets
In this chapter,
students must finish
several transaction
in types of
exercises
3.1 ESTABLISHMENT OF THE INTERNATIONAL FINANCIAL MARKET
3.2 COMPONENTS OF THE INTERNATIONAL MARKET
3.3 THE INTERNATIONAL MANETARY MARKET 3.3.1 Eurocurrency market
- The origin of the Eurocurrency market
- The creation of Eurodollar deposits and loans 3.3.2 The foreign exchange market
- Definition of the foreign exchange market
- Characteristics of the foreign exchange market
- Market participants
- Transactions of the foreign exchange market
Spot transaction
- Definition
- The content of Spot transaction
o The Spot exchange rate
o Value date
o Steps on dealing
Forward transaction
- Definition
- Characteristics of a forward transaction
- Content of a forward transaction
o Commodity currency
o Maturity
o Forward exchange rate
o Calculating Forward exchange rate:
Method 1: Based on Swap point
Method 2: Based on interest rate parity
Foreign Exchange Swap
- Definition
- Characteristics
- Contents of the foreign exchange swap transaction and Formula to calculate swap exchange rate
Options
- Definition and characteristics
- Types of Options
- Exchange rate and Option premium
Trang 6- Loss/profit on Option and Diagram
Futures
- Definition
- Contents of futures transaction
o Types of currencies which the futures contract quotes
o The contract size
o The maturity date
o The margin account 3.4 THE INTERNATIONAL CAPITAL MARKET 3.4.1 Overview of the international capital market
- Classification of international capital market
o The international medium and long-term credit market
o The international security market
- Participants of international capital market
o Investment banks
o Brokerage firms
o Commercial banks
o Investors
o Centre banks
- Market transactions 3.4.2 The international bond market
- Market segments
o Foreign bonds market
o Eurobonds market
- Market instruments 3.4.3 The international equity market
- Market structure
- Market characteristics
- International equities
Chapter 4: INTERNATIONAL PAYMENT (reference)
Chapter 5: INTERNATIONAL INVESTMENT AND MULTINATIONAL
International
accelerated at a
breathtaking pace,
and shifts in the
flow of this
5.1 INTERNATIONAL INVESTMENT IN GENERAL
- Concepts and characteristics
- Categories of international investment
o Foreign direct investment
o Foreign indirect investment 5.2 FOREIGN DIRECT INVESTMENT
Trang 7investment are now
reshaping the global
economic
landscape Foreign
investors not only
bring fresh capital,
they also bring jobs,
technology,
competitive spirit
and ideas to new
foreign affiliates
also point to a
deeper level of
economic
integration among
nations It cannot be
played an important
role in the modern
economic
- Concept
- Characteristics
- Roles:
o For host country
o For recipient country 5.3 FOREIGN INDIRECT INVESTMENT 5.3.1 Concept
5.3.2 Characteristics of foreign indirect investment
- The investors do not directly supervise the use
of capital
- Financial investment in international financial market
5.3.3 International portfolio investment
- Concept
- Rate of return on security investment
- International portfolio investment in stock market
- International portfolio investment in bond market
5.3.4 International commercial credit
- Concepts
- Features
- Effective financing rate 5.4 MULTINATIONAL CORPORATE FINANCE 5.4.1 Concept and models of multinational corporation 5.4.2 Reasons for the growth of multinational corporate
- Availability of raw materials
- Protecting and exploiting reputations
- The product Line-cycle hypothesis
- Capital availability
- Strategic FDI
- Avoiding tariffs, quotas and other regulations 5.4.3 Special issues facing multinational corporations: Transfer pricing
- The measurement of transfer prices
- Considerations in transfer pricing
- The mechanism of transfer prices
Chapter 6: FOREIGN AID - GRANT, LOAN AND DEBT 6
Beside some
general
6.1 OVERVIEW OF FOREIGN AID - GRANT, LOAN AND DEBT
Trang 8understanding about
foreign ads, this
chapter will provide
students a fully
sight about foreign
aid: grant, loan and
debts; specializing
on ODA
Additionally,
after finishing this
chapter, students
also have a general
view of managing
foreign loan, debt
and debt crisis – a
commonly serious
topic todays
- Foreign aid - grant
- Foreign loan
- Concept of foreign loan
- Classification of foreign loan
- Advantages and disadvantages of foreign loan
- External debt (or Foreign debt) 6.2 OFFICIAL DEVELOPMENT ASSISTANCE (ODA)
- Concept of ODA
- Grant Element of ODA
- Classification of ODA
- Roles of ODA loan
o For donors
o For recipients
- The process of mobilization, management and use of ODA
6.3 MANAGEMENT OF FOREIGN LOAN, DEBT AND DEBT CRISIS
- Management of foreign loan and debt
o Concept of objectives of foreign loan and debt management
o Evaluation of a nation’s foreign debt level
o Contents of foreign loan and debt management
- External debt crisis (Foreign debt crisis)
o Causes of external debt crisis
o Solutions to prevent external debt crisis
o Foreign debt settlement through Paris Club and London Club
CHAPTER 7 THE INTERNATIONAL UNION OF TAXATION 6
Joining in WTO and
other international
financial and
economic
institutions, it has
been increasingly
understand about
7.1 INTERNATIONAL UNION OF TAX: GENERAL KNOWLEDGE
- Concept
o Principles and rules on imposing taxes on international economic relations
o Regulations on dealing with international economic relations
- Forms of the international union of taxation
Trang 9the international
union of tax
Therefore, in this
chapter, students
will be provided a
general view of
international union
of tax and tax union
Otherwise, it is also
necessary for
understand well
international union
for the avoidance of
double taxation
7.2 CUSTOM UNION
- Tariff
o Overview of tariff
o Types of tariffs
o Analyzing impacts of tariffs
o Roles of tariff
- Customs Union
o Roles of customs union
o Some customs unions that Vietnam participates in: Relations in tariff in the WTO ;Tariff issues in ASEAN
7.3 THE INTERNATIONAL UNION FOR THE AVOIDANCE OF DOUBLE TAXATION
- Concept of double taxation
- Types of double taxation
- Methods to avoid double taxation
- Conventions for the avoidance of double taxation
CHAPTER 8: MAJOR PROFESSIONAL ACTIVITIES OF SEVERAL
INTERNATIONAL FINANCIAL ORGANIZATIONS
3
IMF, WB and ADB
are three off many
financial institutions
Vietnam They are
helpful in pushing
Vietnam economy
developing
Therefore,
understanding about
these organizations
will create a basic
concept in how and
why Vietnam jumps
international
finance, and how
these institutions
operate in Vietnam
as well
8.1 THE ESTABLISHMENT, CLASSIFICATION AND ROLES OF INTERNATIONAL FINANCIAL ORGANIZATIONS
- The establishment of international financial organizations
- Classification of international financial organizations
o Based on the scope of activities
o Based on supporting targets
- The role of international financial organizations
o Combining monetary policies of member countries to bring stability to national and international monetary systems
o Providing supports for member countries
to develop their economies, especially the poorest and most under-developed countries
o Supporting developing member nations to strengthen economic-financial management capacity
8.2 THE INTERNATIONAL MONETARY FUND
Trang 10- Overview of the International Fund
- Financial resources of the IMF
- The process of IMF lending
8.3 THE WORLD BANK
- Overview of the World Bank
- The International Bank for Reconstruction and Development (IBRD)
- The International Development Association (IDA)
8.4 ASIAN DEVELOPMENT BANK (ADB)
- Overview of Asian Development Bank
- Financial Resources of ADB