The main goal of this seminar is to enable the participants to understand the how international financial markets work with a special emphasis on foreign exchange rate exposure and risk management. The participants will learn how international financial markets are structured, how they operate and what role they play in overall globalized marketplace. Several theories of exchange rate determination will be discussed. The last portion of the seminar will concentrate on applying tools of risk management in managing exchange rate risk.
Financial Market Overview
- Market structure, market participants, cross-rates and arbitrage, spot and forward markets
Exchange Rate Determination
- International parity conditions (interest rate parity, purchasing power parity, international Fisher effect, uncovered interest rate parity, and foreign exchange unbiased expectations)
Foreign Exchange Risk Management
- Determining the foreign exchange exposure (translation, transaction, and economic)
- Hedging using currency forward
Total Seminar Hours: 9
Marko Svetina, Ph.D., joined the University of San Diego in the fall of 2008, after obtaining his Ph.D. in Finance from Arizona State University. At USD, he teaches graduate and undergraduate Corporate Finance and Investments courses. His research interests include the role of private equity in mergers and acquisitions, the impact of local clienteles on the precision of analyst forecasts, accelerated share buybacks, and performance and competition of exchange traded funds (ETFs).