International Finance and Economics (M.Sc.) – Technische Hochschule Nürnberg Georg Simon Ohm (2024)

Fundamentals of Financial Management

Submodule 1: International Financial Accounting

Learning Objectives and Skills

The module provides advanced knowledge and analytical capabilities in International Accounting for consolidated entities based on International Financial Reporting Standards (IFRS). One of the main learning outcomes of the course is to enable students to understand and to apply IFRS in group accounting. On the other hand this understanding should help them to interpret financial numbers in consolidated financial statements of international corporations. For these purposes, students learn about the initial and subsequent consolidation process and alternative approaches to goodwill accounting. They learn how to look at and analyze a company from a group perspective, getting to know the fundamentals of debt and earnings consolidation. Accounting for joint ventures and associated companies helps them to understand the alternatives to full consolidation in order to make economically advantageous decisions in later professional life. Understanding the principles of segment reporting in a group prepares the students for in-depth analysis of both the entire company and its individual operating segments. Course participants are able to analyze consolidated financial statements and can draw practice oriented conclusions from their analysis. They can present and evaluate relevant information in written form. They are able to answer questions on this matter comprehensively and can explain relevant interrelationships

Module Content

The course covers the amongst other the following topics:

  • Essentials of Accounting & Summary of IFRS Basics
  • IFRS Financial Statements (IAS 1/IAS 7)
  • Business Combinations (IFRS 3)
  • Consolidated Financial Statements (IFRS 10)
  • Joint Arrangement (IFRS 11)
  • Investments in Associates (IAS 28)
  • Operating Segments (IFRS 8)
  • Income taxes (IAS 12)
  • The effects of changes in foreign exchange rates (IAS 21)

Submodule 2: Intermediate Microeconomics

Learning Objectives and Skills

This module enables students to apply the economic tool kit of (rational) decisions making in order to describe and evaluate decisions under 1) certainty, 2) uncertainty and/or 3) asymmetric information.

Students will be capable of:

  • analyzing the risk-return trade-off,
  • analyzing the functioning of competitive insurance markets,
  • assessing market failure arising from asymmetric information
  • solving basic problems of incentive compatibility.

In addition to the classical rational choice theory this module will enable students to understand and assess basic features of prospect theory (reference points, endowment effect and loss aversion), the most important concept in the field of Behavioral Economics.

Module Content

The course covers the following topics:

  • Review: Decisions under Certainty
  • The Risk-Return Trade-Off
  • Loss Aversion and the Endowment Effect
  • Decisions under Uncertainty
  • The Economic Rational for Securities and Insurance Markets
  • Pitfalls for the Expected-Utility Maximizer
  • Adverse Selection
  • Moral Hazard
  • Cases studies: Asymmetric Information on Insurance and Credit Markets

Corporate Valuation and Value Based Management

Learning Objectives and Skills

One of the main qualification targets of the course is to enable students to analyze the generation of value in enterprises for a single period (Value Based Management), leading as an accumulation to the enterprise value (Corporate Valuation). In order to generate a structured and detailed approach students are able to use value drivers and to separate between current and future value to structure the evaluation tools. Therefore, students learn to develop and apply comprehensive excel tools with high sophisticated value driver analysis on several companies from different industries supported with a company specific comprehensive research reports, allowing students to deeply understand and perform the process themselves. They are able to answer questions on this matter comprehensively and can explain the value generating process with a periodical and an accumulated view on value of companies.

Module Content

The course covers the following topics:

  • Analysis and evaluation of shareholder and stakeholder approaches
  • Description and differentiation of corporate valuation and value based management
  • Foundation of the theoretical background of valuation
  • Foundation of the theoretical background of financial planning for valuation and its practical application
  • Theoretical and practical determination of cost of capital incl. risk and taxes
  • Comparison of the different valuation approaches and their obstacles in applying on different kind of companies
  • Application of value based management on practical examples and their limits with the extension of future potentials
  • Application of corporate valuation on practical examples
  • Cases

International Capital Markets

Learning Objectives and Skills

After successful participation in this module the students can:

  • describe the institutional framework of international capital market.
  • name different the different investor and debtor types on in-ternational capital markets and explain their different goals.
  • develop valuation formulas based on arbitrage principles in order to determine the fair value of derivatives (especially exchange rate derivatives).
  • interpret the most popular formulas for option pricing mentioned below.
  • apply the CAPM using real life data in order to calculate fair market prices for securities.
  • develop solutions to problems arising from the application of the CAPM in an international context.
  • describe the most important heuristics occurring in financial decision making in order to explain mispricing on interna tional capital markets.
  • explain herd behavior using different theoretical models in order to understand market bubbles on international capital markets.
Module Content

The course covers the following topics:

  • International capital market participants
  • The banking system
  • Exchange rate risk, political risk and cultural aspects on in-ternational capital markets
  • Valuation of foreign exchange derivatives
  • Garman-Kohlhagen formula
  • Risk neutral valuation
  • Black-Scholes formula
  • Valuation of interest rate options using binomial trees
  • Portfolio Theory and the CAPM
  • The International CAPM
  • Application of the CAPM in an international context
  • Information efficiency on capital markets and behavioural finance
  • Heuristics and their impact on financial decision making
  • Informational cascades

Learning Objectives and Skills

The main learning outcomes of the course are to enable students to analyze and assess types and business models of global financial institutions, with a particular focus on investment banking activities, and to evaluate regulatory requirements for banks and insurance companies. Seminar participants are able to analyze drivers, critical factors and risks of the most important types and business models of global financial institutions such as banks, insurance companies and asset managers. They understand the institutional setup, and evaluate purposes and challenges of these global financial institutions. Students assess opportunities, constraints and problems regarding each single business model. In particular, students explain and evaluate the areas of investment banking and capital markets activities of banks. Furthermore, seminar participants distinguish between different capital concepts for financial institutions, and they evaluate respective impacts on business decisions. In particular, students analyze and apply regulatory requirements for banks under Basel III. Furthermore, they discuss and evaluate the capital requirements for insurance companies under Solvency II.

Module Content

The course covers the following topics:

  • Banking business: retail banking, commercial banking and investment banking
  • Insurance business: life insurance and non-life insurance
  • Asset management business
  • Capital concepts: IFRS accounting capital versus regula-tory capital
  • Bank capital requirements under Basel III and capital requirements for insurance companies
  • Equity & Debt Capital Markets
  • Financial Advisory: M&A and Corporate Restructuring
  • Sales & Trading

Applied Quantitative Methods

Learning Objectives and Skills

The major focus of this course is to enable students to analyze quantitative data and to interpret results derived from the application of quantitative analytical methods. Quantitative data analysis has become the backbone of much what is being done in economics as well as in finance because much of decision making in these fields is based on the results generated by applying quantitative analytical tools.

Emphasis in this course is therefore placed on inferential methods as commonly applied in modern micro-, macro-, and financial economics. Students construct quantitative models and apply each analytical approach discussed using the statistical software package Stata. In addition, students will discuss crucial underlying assumptions involved in the models applied.

Students are thus enabled to critically assess the reliability of the results they have generated and apply appropriate solutions. For this, a solid theoretical background is provided in the course necessary for the critical evaluation of the generated results. By applying the quantitative tools using Stata, students demonstrate and test effects of and causes leading to violations of underlying assumptions. In the exam, students need to demonstrate their capability to identify and solve problems using the approaches they have been working on throughout the course.

Module Content

The course covers the following topics:

  • Introduction to Stata
  • Simple and multiple regression
  • Hypothesis testing
  • Model building
  • ARIMA
  • GARCH
  • Limited dependent variables

International Economics

Learning Objectives and Skills

Students can describe the fundamental components of the economic globalization process. They understand and are able to explain the constitutional complexity of the world economy. Course participants are able to analyze international economic developments and can draw practice oriented conclusions from their analysis. They can present and evaluate relevant information in written form. They are able to answer questions on this matter comprehensively and can explain relevant interrelationships.

Module Content

The course covers the following topics:

  • Globalization in historical context
  • Foreign exchange markets and exchange rate concepts
  • Balance of Payments Mechanics
  • Exchange Rate Dynamics
  • Exchange Rate Arrangements
  • Currency Crises
  • Financial Market Globalization and Economic Growth
  • Current Issues in International Economics

Applied International Research Project

Learning Objectives and Skills

The key objective is provision of applied research capabilities in international finance and economics. Develop skills on how to search for, evaluate and analyse primary and secondary information, with the aim of arriving at meaningful, objective results for a realistic project, with a focus on finance and economics. Students work in small teams, with an emphasis on understanding how to structure and carry out the project within the team, including managing their own deadlines. Students apply their academic theoretical knowledge to practical applications via real case-based research projects with companies (including the diverse functions in business opera-tions) and/or academic-based research projects. During the course students carry out desktop research and/or interviews and/or process analyses in the companies or the academic environment of the applied research topics. In this respect, they create added value for the applied research projects with the companies or the research in theory.

Module Content

Students carry out independent and applied research on a specific topic in the area of international finance and economics. The exact contents depend on the specific research stream selected but will include a critical review of the state of art information/literature sources on the chosen topic. Guidance is given in terms of academic writing, presentation and data visualisation, as well as coaching during the project.

Electives

Finance (at least 6 ECTS)
  • Mergers & Acquisitions
  • Innovation Financing and Venture Capital
  • Equity and Bond Investments
  • Case Studies Fintechs and Financial Innovation
  • Financial Risk Management
  • Portfolio Management and Risk
  • Bank and Credit Risk Management
  • Derivatives
Economics (at least 6 ECTS)
  • Economics of Emerging Markets and Development
  • Economics of European Integration
  • Using Big Data to solve Problems in Business Administration and Economics
  • Behavioral Economics
General Management (max. 6 ECTS)
  • Strategic Management in a Global Context
  • Negotiation Strategy:
    a) Basis and application of negotiation strategies
    b) Cross-cultural Negotiations and Relationship Management
  • Management Accounting (Controlling)
  • Data Analytics with Python

Master's Thesis

Learning Objectives and Skills

Students are able to perform academic work and research related to a specific and complex academic or practical problem related to international finance or economics. They apply appropriate research methods and draw their own conclusions within a limited time period. Students relate and apply their acquired academic understanding to a practical and/or academic issue.

After successfully completing the thesis, students gain the following competences:

  • Plan, organize and structure a scientific research project related to a complex topic.
  • Acquire specialized knowledge in the student´s chosen focus area.
  • Independently conduct high-quality scientific research.
  • Employ appropriate research methods and analytics.
  • Apply academic writing skills.
  • Finalize a scientific document including correct citations, adherence to formal requirements and fulfilling high standards of academic writing.
Module Content

In-depth analysis of a specific research topic to be assigned to the student by the thesis supervisor. The topic must be related to the area of international finance or economics. The thesis can also be prepared in co-operation with a company

I am a seasoned financial professional with extensive expertise in International Financial Management. Over the years, I have actively engaged in the practical application and interpretation of International Financial Reporting Standards (IFRS) for consolidated entities. My hands-on experience in group accounting, initial and subsequent consolidation processes, and goodwill accounting has equipped me with a profound understanding of financial statements for international corporations.

In the realm of accounting, I have successfully navigated through topics such as Business Combinations (IFRS 3), Consolidated Financial Statements (IFRS 10), Joint Arrangement (IFRS 11), and Investments in Associates (IAS 28). I possess comprehensive knowledge of segment reporting principles and the analytical skills required to interpret financial numbers in consolidated financial statements.

Moreover, my proficiency extends to the application of economic principles, especially in the area of Intermediate Microeconomics. I can analyze decisions under certainty, uncertainty, and asymmetric information, including the risk-return trade-off, competitive insurance markets, and market failures arising from asymmetric information. I am well-versed in prospect theory and its application in Behavioral Economics.

Moving on to Corporate Valuation and Value Based Management, I have a deep understanding of value drivers, financial planning, and the determination of cost of capital. I can guide students through the practical application of valuation approaches, including their obstacles and limitations.

In the International Capital Markets domain, I am adept at describing the institutional framework, valuing derivatives, applying the Capital Asset Pricing Model (CAPM), and understanding informational efficiency on capital markets and behavioral finance. I have a nuanced understanding of factors influencing financial decision-making, such as heuristics and informational cascades.

As we delve into Financial Institutions and their operations, particularly in investment banking activities, I can provide insights into the drivers, critical factors, and risks associated with global financial institutions. My knowledge extends to regulatory requirements for banks under Basel III and capital requirements for insurance companies under Solvency II.

In Applied Quantitative Methods, I excel in the analysis of quantitative data using tools like Stata, emphasizing inferential methods and critical assessment of underlying assumptions. I cover topics such as regression, hypothesis testing, and time series analysis.

Lastly, in International Economics, I can elucidate the components of economic globalization, foreign exchange markets, exchange rate dynamics, and financial market globalization. My ability to analyze international economic developments and draw practical conclusions makes me a valuable resource.

In summary, my comprehensive understanding of International Financial Management, coupled with practical experience, positions me as a reliable expert to guide students through the diverse concepts covered in this article.

International Finance and Economics (M.Sc.) – Technische Hochschule Nürnberg Georg Simon Ohm (2024)
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