ECON3236 International Finance

6 points
(see Timetable)
Semester 1UWA (Perth)Face to face
Details for undergraduate courses
  • Level 3 option in the Economics; Professional Economics; Finance major sequences
  • Category A broadening unit for Bachelor of Commerce students where relevant according to the broadening requirements for each student
  • Level 3 elective
This unit is concerned with the operation and role of international financial markets from a macroeconomic standpoint. Topics include foreign exchange markets, international capital and money markets, international derivatives markets; models of the exchange rate; the role of foreign exchange derivatives in the management of foreign-exchange risk.
Students are able to (1) recognise the structure of international financial markets; (2) understand the Australian balance of payments and its relationship to international finance (IF); (3) understand the foreign exchange (FX) market and the concepts of nominal, real and effective exchange rates; (4) grasp the distinction between fixed and flexible exchange rates as well as the main advantages and disadvantages of each; (5) recognise the theories of exchange rate determination including the demand–supply model, purchasing-power parity, the various interest rate parity conditions and the monetary model; (6) grasp the methods by which the exchange rate may be forecast and the relative merits of these methods; and (7) understand the notion of FX risk, the various sources of FX risk as well as the methods by which this risk may be hedged.
Assessment information is provided in the unit outline.

Supplementary assessment is not available in this unit except in the case of a bachelor's pass degree student who has obtained a mark of 45 to 49 overall and is currently enrolled in this unit, and it is the only remaining unit that the student must pass in order to complete their course.
Unit Coordinator(s)
Professor Nic Groenewold
Unit rules
ECON2234 Macroeconomics: Policy and Applications
any Level 2 Finance unit; for pre-2012 courses: none
ECON2236 International Finance
Contact hours
lectures/tutorials/seminars/workshops: up to 3 hours per week
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