Course Overview
This course provides a solid foundation in financial risk management in a multinational setting. In a world where global capital flows and trade are increasingly integrated with day to day business operations it is essential for finance professionals to understand and manage financial risk. The course defines and discusses management of economic and operational risks in a corporate setting. Students are introduced to modern financial risk management techniques. The course explains how a range of modern risk management tools such as money market hedges, futures contracts, options contracts, insurance risk transfer techniques, currency and interest rate swaps are used in hedging and mitigating multinational corporate risks. The student is given an appreciation of economic and operating risks faced by business in a modern global setting, and is provided with a range of tools and strategies that can be used to manage and mitigate such risks.
- Not offered this term
- This course is not offered this term. Notify me to receive email notifications when the course opens for registration next term.
Learning Outcomes
Upon successful completion, the student will be able to:
- Understand how fluctuating exchange rates systematically affect the value of an international business by impacting cash flows and the domestic currency value of assets and liabilities.
- Recognize and differentiate between economic exposures, transaction exposures and financial translation exposures.
- Evaluate and recommend basic strategies for the management and mitigation of foreign exchange volatility on an entity’s operating structure and competitive position.
- Understand the forces in play that determine foreign currency exchange rates and be able to forecast expected exchange rates.
- Assess economic risks and be able to develop basic hedging and operating strategies to manage and mitigate this risk.
- Assess operational risks in a systematic fashion and develop hedging or operating strategies that reduce or control the impact of foreign exchange volatility on corporate cash flows.
- Identify transaction risks as they emerge in daily operations and decision making and be able to develop or recommend hedging or financial strategies to limit or mitigate these transaction risks.
- Discuss how multinational companies develop and implement multi step procedures for managing and hedging global foreign exchange risk.
- Explain how currency futures, currency options, forward exchange rates, currency and interest rate swaps can be used effectively to manage economic exposures, transaction exposures and translation exposures for companies.
- Evaluate and choose amongst hedging alternatives in order to recommend the most appropriate financial risk management tools in a given corporate situation.
Effective as of Winter 2011
Programs and courses are subject to change without notice. Find out more about BCIT course cancellations.