FM472 Half Unit
International Finance
This information is for the 2025/26 session.
Course Convenor
Dr Liliana Varela
Availability
This course is available on the CEMS Exchange, Global MSc in Management, Global MSc in Management (CEMS MIM), Global MSc in Management (MBA Exchange), MBA Exchange, MSc in Accounting and Finance, MSc in Financial History, MSc in Law and Finance and MSc in Management (1 Year Programme). This course is available with permission as an outside option to students on other programmes where regulations permit. This course uses controlled access as part of the course selection process.
The deadline to apply for this course is Tuesday 30 September 2025 at 12:00 (noon) UK time. You will be notified whether you have been offered a place by 12:00 (noon) on Friday 3 October 2025.
Priority is given to MSc Accounting and Finance, MSc Law and Finance, and MSc Financial History students, for whom this course is not capped. Any students on these three programmes who request a place by Tuesday 30 September 2025 at 12:00 (noon) UK time will be given one.
Second priority is then given to students on the other programmes listed in the Course Availability who meet the pre-requisite criteria. These students are likely to be given a place, but this is not guaranteed, and chances of gaining a place are increased if the course is selected by Tuesday 30 September 2025 at 12:00 (noon) UK.
Finally, outside option requests who meet the pre-requisite criteria will be considered if space remains. Students from the following programmes who have met the pre-requisites will not need permission from the course leader to take this course: MSc International Political Economy, Master of Public Administration (LSE-Sciences Po), MSc Economic History, MSc Political Science (Political Science and Political Economy), MSc Environment and Development, and MSc International Relations. Students from other programmes will need to request a place by contacting finance.teachingmanager@lse.ac.uk.
This course is not open to students from the following departments: Economics, Finance, Mathematics, and Statistics.
This course has a limited number of places (it is controlled access). In previous years we have been able to provide places for all students that apply but that may not continue to be the case.
Please contact finance.teachingmanager@lse.ac.uk with any queries.
In the past students on MSc Development Management, and MSc Economy, Risk and Society, and from the European Institute have enjoyed this course.
This course does not permit auditing students.
Requisites
Additional requisites:
Some background in economics and / or finance.
Course content
The objective of the course is to equip students with the relevant academic research, techniques and analytical skills to interpret current developments in the fast-changing area of international finance.
This course approaches such key issues and topics in international finance using the exchange and rate as a unifying theme. The foreign exchange market is the largest financial market, with a daily trading volume reaching $7.5 trillion in 2022. It is also a unique market where prices are determined not only by the fundamentals of this asset class but also by government and central bank interventions. Exchange rates are an open economy’s most important price as they can affect the relative value of an entire economy.
First, the course introduces the structure, trading and organisation of the foreign exchange rate market and international parity relationships. Second, the course presents main elements of international risk management such as financial instruments to hedge the currency risk (forward, future, and options) and management of foreign currency exposure. Third, the course presents theories and methods of exchange rate determination. Fourth, the course examines currency crises in developed and emerging markets. Finally, the course discusses current trends in the world economy.
The teaching approach combines theory, analyses of data and empirical examples. It also gives emphasis on fundamental concepts, principles, and analytical theories that are more robust to answer the most relevant questions within the area of international finance.
Teaching
30 hours of seminars in the Winter Term.
Indicative reading
Bekaert, G., & Hodrick, R. (2017). International Financial Management (3rd ed.). Cambridge: Cambridge University Press. doi:10.1017/9781316282274
Keith Pilbeam International Finance (Palgrave, 2023, 5th edition)
Further readings (optional): textbooks for students who want to explore FM472 topics beyond the lectures’ material. These readings are not part of the exam material.
- C. Eun, B. Resnick and T. Chuluun (2021), International Financial Management, 9th edition;
- Sercu, P (2020), International Finance, Princeton University Press ;
- P. Krugman, M. Obstfeld and M. Melitz (2018), International Finance, Pearson, 11th edition;
Handouts and Moodle
Slides presented during the lecture are posted on Moodle. Class assignments are also posted on Moodle the week before the relevant class. Guidelines to solutions for numerical questions are posted on Moodle after they are covered in class.
Assessment
Exam (90%), duration: 120 Minutes in the Spring exam period
Continuous assessment (10%)
• Exam (90%): The exam is a two-hour written examination, which includes both essay-type and numerical questions. Four instances of exams from past years will be provided on Moodle along with solutions.
• Continuous assessment (10%): Continuous assessment takes the form of in-class participation.
Key facts
Department: Finance
Course Study Period: Winter Term
Unit value: Half unit
FHEQ Level: Level 7
CEFR Level: Null
Total students 2024/25: 71
Average class size 2024/25: 71
Controlled access 2024/25: YesCourse selection videos
Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.
Personal development skills
- Team working
- Problem solving
- Communication
- Application of numeracy skills