International Finance: Theory into Practice

International Finance presents the corporate uses of international financial markets to upper undergraduate and graduate students of business finance and financial economics. Combining practical knowledge, up-to-date theories, and real-world applications, this textbook explores issues of valuation, funding, and risk management. International Finance shows how theoretical applications can be brought into managerial practice.

The text includes an extensive introduction followed by three main sections: currency markets; exchange risk, exposure, and risk management; and long-term international funding and direct investment. Each section begins with a short case study, and each of the sections’ chapters concludes with a CFO summary, examining how a hypothetical chief financial officer might apply topics to a managerial setting. The book also contains end-of-chapter questions to help students grasp the material presented.

Focusing on international markets and multinational corporate finance, International Finance is the go-to resource for students seeking a complete understanding of the field.

• Rigorous focus on international financial markets and corporate finance concepts
• An up-to-date and practice-oriented approach
• Strong real-world examples and applications
• Comprehensive look at valuation, funding, and risk management
• Introductory case studies and “CFO summaries,” and end-of-chapter quiz questions
• Solutions to the quiz questions are available online

Table of Contents

PART I Introduction and Motivation for International Finance
Chapter 1 Why Does the Existence of Borders Matter for Finance?
Chapter 2 International Finance: Institutional Background
PART II Currency Markets

Chapter 3 Spot Markets for Foreign Currency
Chapter 4 Understanding Forward Exchange Rates for Currency
Chapter 5 Using Forwards for International Financial Management
Chapter 6 The Market for Currency Futures
Chapter 7 Markets for Currency Swaps
Chapter 8 Currency Options (1): Concepts and Uses
Chapter 9 Currency Options (2): Hedging and Valuation
PART III

Chapter 10 Do We Know What Makes Forex Markets Tick?
Chapter 11 Do Forex Markets Themselves See What Is Coming?
Chapter 12 (When) Should a Firm Hedge Its Exchange Risk?
Chapter 13 Measuring Exposure to Exchange Rates
Chapter 14 Value-at-Risk: Quantifying Overall Net Market Risks
Chapter 15 Managing Credit Risk in International Trade
PART IV Long-Term International Funding and Direct Investment

Chapter 16 International Fixed-Income Markets
Chapter 17 Segmentation and Integration in the World’s Stock Exchanges
Chapter 18 Why—or When—Should We Cross List Our Shares?
Chapter 19 Setting the Cost of International Capital
Chapter 20 International Taxation of Foreign Investments
Chapter 21 Putting It All Together: International Capital Budgeting
Chapter 22 Negotiating a Joint-Venture Contract: The NPV Perspective