MASTER IN INTERNATIONAL FINANCE. Academic Stay at The London School of Economics. Academic Stay at The Wharton School

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1 MASTER IN INTERNATIONAL FINANCE Academic Stay at The Wharton School Academic Stay at The London School of Economics Academic Stay at The Chinese University of Hong Kong 1

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3 MASTER IN INTERNATIONAL FINANCE 3

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5 Welcome to the IEB, a Higher Education Institution affiliated with two iconic universities, Complutense University and Rey Juan Carlos University, and sponsored by the Bolsa de Madrid (Madrid Stock Exchange). The IEB was created in 1989 with the launch of the first Spanish Master in Stock Exchanges and Financial Markets. Having trained since then a large number of undergraduate and post-graduate students as well as professionals, the IEB has gained the indisputable position of leading Financial Education Center in Spain and the Spanish speaking world. Our Institution has been entrusted with preparing and training managers and other professionals from the main Spanish and Global companies operating worldwide in the field of International Finance. Our faculty of experienced professors covers a wide variety of subjects in the economic, legal and financial fields. Our students receive their academically demanding training and personalized attention with the aim also to inspire a professional attitude based on solid moral principles. All of this enables the rapid insertion of our graduates into the work place, and the brilliant professional development of those who pass through our lecture rooms, consolidating daily the prestige of our institution. Anybody aiming to acquire the highest level of economic, legal and financial training will find at the IEB all the human and technical resources required to satisfy their intellectual needs. Best regards Welcome Álvaro Martínez-Echevarría y García de Dueñas IEB Director 5

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7 1. Objectives 2. Structure 3. Methodology 4. Students 5. Qualification 6. Syllabus 7. Faculty 8. Facilities and Services 8.1. Technology and IT 8.2. Library and Study room 8.3. Treasury Desk 8.4. On-line Simulator 8.5. Career Development Department 9. Admission 10. Schedule 11. The London School of Economics Academic Stay 12. The Wharton School Academic Stay 13. The Chinese University of Hong Kong Academic Stay 14. Tuition Fees, Financial Aid and Scholarships 15. Rectorate and Academic Board Index 7

8 OBJECTIVES 1 Our raison d être The globalization set in motion during the last century is consolidating in this 21st century. Social affairs, the world of culture, politics and the economy are breaking national boundaries and jumping vertiginously from one continent to another. The world of finance is not exempt from the globalization we are experiencing; indeed, financial markets are probably one of the catalysts of this movement and those who work in or with them can vouch for the international and global nature of their work environment. Any professional who looks for achievement and great success in the financial world should, therefore, not only have technical skills, but also a set of skills that can be applied internationally. The IEB, as leader in financial education in Spain and the Ibero-American region, offers this Master in International Finance to those individuals aiming to become international financial leaders in their respective fields. More specifically, the objectives of the Master s degree are: To give students a broad and professional knowledge of all areas of finance from top business schools. To offer through examples of how to apply the theoretical concepts to the day-to-day financial world, and through exercises, case studies, and real-time trading on an online portfolio simulation platform, a practical and up-to-date point of view for the topics covered in the course. To prepare students to the working environment through the use of Bloomberg as a primary teaching tool and numerous presentations throughout the degree. To encourage personal development and teamwork through in class team case studies and presentations. To offer a challenging and rewarding training programme for current and future international finance professionals 8

9 STRUCTURE 2 International Excellence The majority of the programme is taught at IEB s headquarters in Madrid, a city considered to be one of the key financial centers in Europe. The Spanish capital, as well as having its own enormous intrinsic strength and vitality, has the advantage of being Europe s gateway to the Ibero- American world. Today, many of these emerging economies are playing an important role in the International Financial Markets. In addition, students in the Master in International Finance follow part of their study plan in three of the most prestigious business schools in the world of finance: the London School of Economics (United Kingdom), the Wharton School (USA) and the Chinese University of Hong Kong (China). The Academic stays in these three world references in financial education and research not only provide the highest standard of teaching and content but also give an insight into key financial centers, such as London, New York, Philadelphia and Hong Kong- cities that are worldwide references in international financial leadership. Celina Sonnie USA The Master is a fully English-based programme and, as such, all lectures, class discussions, presentations, student-faculty communications, and documentation are in English. This is important as English is the main language used in the financial world. The Master in International Finance is the best and most complete The opportunity to study here at IEB has been a very rewarding and valuable experience. It is a combination of the caliber of the professors, students and interactive class sessions and case studies. The professors are highly knowledgeable and experts in their field. I have also been fortunate to develop strong friendships with classmates while studying which I will continue to value in the future. I have thoroughly enjoyed learning more in depth about the financial markets as well as the business culture of Spain. Finance Programme in Spain. The Programme includes in depth coverage of all fields of finance relevant to today s financial world. The subjects range from corporate finance and treasury to all financial markets. It also includes important subjects today, such as risk management, regulation and ethics. By covering all fields of finance, students are then able to choose their preferred area, in which they can then specialize and develop a professional financial career. 9

10 METHODOLOGY 3 The Best Way of Learning The methodology followed is highly practical, based on rigorous and upto-date contents. Throughout the Master, students are offered examples of how to apply the theoretical concepts seen in class to the day- to-day financial world. In addition, for each study module, students have to carry out exercises, case studies and a group case presentation relating to the material covered. Therefore, the theoretical classes will alternate with practical ones in which the students will also use the appropriate IT tools. IEB s IT room and treasury desk, very similar to those found in any brokerage firm, allows students to put into practice their theoretical knowledge through the use of Bloomberg and real-time trading on IEB s online portfolio simulation trading platform. Bloomberg is also proactively used by the teachers in class to show examples of the concepts taught. Another factor that contributes to the practical nature of the Master is the fact that most of the professors are themselves highly respected financial Salma Benabdallah MOROCCO professionals in their area of expertise. Moreover, the Master aims to promote personal development and teamwork through group exercises, case studies and presentations. Finally, the technical knowledge required from the students will also be tested throughout the Master via exams, exercises, case studies and Throughout the Master we were taught how to use Bloomberg. It has been a key tool to develop skills and knowledge in order to gain a better understanding of financial markets and provided us with access to an unlimited amount of information to carry out our assignments. research papers. All students are required to complete a compulsory Final Project, which they will be presenting in front of a jury panel, and in which they are expected to put into practice all the knowledge acquired throughout the programme. 10

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12 STUDENTS 4 The Heart of our Institution The Master is aimed at undergraduate students from all fields of study with a good level of English, as well as professionals with no more than four years working experience in finance or looking to change from their current field of work to the world of finance. Juan José Sanchís SPAIN All candidates go through several interviews with the members of the Admissions Committee, as well as carrying out several online tests, before joining the programme. The Master starts with a foundation course covering areas such as accounting, excel and Bloomberg in order to refresh and level student s knowledge in these areas before starting the first term s corresponding modules. Master in International Finance students come from all over the world This Master provides a wide and powerful financial knowledge which fuelled my professional career since the very first day. The full time approach submerges the alumni into a hard work high intelligence environment preparing yourself for the real finance world. and all types of academic background. They reflect the very international nature of the Programme. Students will have access to a network of exalumni now working and based all over the world. It will also allow them to acquire an international profile through, amongst other things, the academic stays, and to gain the opportunity to work abroad. 12

13 QUALIFICATION 5 An Outstanding Degree The qualification obtained at the end of the programme is the Master in International Finance Degree. It is issued by the Academic Board of the IEB, sponsored by the Bolsa de Madrid (Madrid Stock Exchange). A diploma will also be issued by IEB s Partners for each academic stay. The London School of Economics The Wharton School The Chinese University of Hong Kong The IEB, in collaboration with CFA Spain, includes within this Master the preparation for the CFA Level I. 13

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15 6 SYLLABUS A Leading Programme 15

16 Module I FOUNDATION COURSE 1.1. Introduction to Financial Markets 1.2. Introduction to Corporate Finance 1.3. Bloomberg Basics 1.4. Introduction to Excel 1.5. Principles of Financial Statement Analysis Module II QUANTITATIVE METHODS APPLIED TO FINANCE 2.1. Financial Maths Time Value of Money Discounted Cash Flow Applications Financial Mathematics in Excel 2.2. Statistics Univariate frequency distributions Measures of Central Tendency and Variability Bi-dimensional frequency distributions Probability and Statistical Inference Introduction to the R Software Exercises and Practical Examples 2.3. Statistics Applied to Finance Financial Market Returns The Markowitz Model 2.4. Econometrics Introduction Simple and Multiple Linear Regression Univariate Time Series Models Non Linear Univariate Time Series Analysis: Modelling Volatility and Correlation Exercises and Practical Examples with E-Views Introduction to Simulation Methods Module III ECONOMICS 3.1. Economics Key Country Economic Indicators Fiscal Policy Money and the Determination of Interest Rates The Banking System and the Money Supply Process Monetary Policy International Trade and Migration The World Economy - World Economic Outlook The role of International Organizations Economics Case Study 16

17 Module IV CORPORATE I 4.1. Accounting Review International Financial Reporting Standards - IFRS Accounting information into Financial information Financial Statements 4.2. Capital Budgeting Project Evaluation and Selection Methods Cash Flow Estimation Sensitivity and Real Options Analysis International Capital Budgeting Capital Budgeting Cases 4.3. Capital Structure Capital Structure Theory Optimal Capital Structure Capital Structure in Practice 4.4. Cost of Capital The Cost of Capital Weighted Average Cost of Capital (WACC) Capital Structure case 4.5. Creative Accounting Methods Financial Shenanigans Accounting Scandals / Enron 4.6. Fundamental Analysis Concept & Purpose Techniques and Tools The Dupont Model Economic Value Added 4.7. International Financial Reporting Standards (IFRS) The Balance Sheet The Income Statement The Cash Flow Statement Other IFRS Topics Ana Sofía Duarte PORTUGAL Having analyzed different Masters related to securities markets I have finally chosen the IEB since their study plans are highly attractive and very thorough. In the IEB not only did I acquire theoretical knowledge but I was delighted by the wide variety of practical cases which the teachers sent us each week and which greatly enlightened me, as thanks to these cases I realized the importance of interiorizing this theoretical knowledge in this world where everything is result driven. 17

18 Module V CORPORATE II 5.1. Banking Relationships Concept and Introduction To The Management of a Banking Relationship Banking Relationship Versus Product Relationship Client Segmentation Commercial Strategy: planning the agenda and commercial activity 5.2. Behavioral Finance Understanding Behavioral Finance Behavioral Finance in the real world Common Biases and its Implications for Asset Management 5.3. Credit Risk Credit Basics Causes of Credit Risk Issues Measuring Credit Risk 5.4. Credit Risk Analysis Credit Risk Definition The Indenture and Covenants Default Triggers Credit Ratings Credit Risk Analysis 5.5. Corporate Valuation Valuation Methodologies Classification The Difference between Value and Price Synergy Analysis and Impact on EPS The Dividend Discount Models Discounted Cash Flow Valuation Sum of the Parts Methodology Case studies 5.6. Financial Forecasting and Planning Short Term Planning The Master Budget Long Term Planning Master Budget and Long Term Planning Cases 5.7. Working Capital Management Operating and Cash Cycles Cash, Inventory, Receivables, and Liability Management International Working Capital Management issues Working Capital Management case studies Module VI CORPORATE III 6.1. Basic Finance Syndications The Syndicated Loan Market The Syndication Process and Strategies Loan Documentation, Special Clauses, and Pricing Factors The Bond Issuance Process: MTN Programs, Covered Bonds 18

19 6.2. Business International Law Different Legal Systems and Differences in Contract Law Property Rights Protection of Intellectual Property Product Safety and Product Liability The Multilateral Investment Guarantee Agency Settlement of Disputes 6.3.Corporate Governance Fundamentals of Corporate Governance International Evolution Principles and Topics of Corporate Governance 6.4. Corporate Restructuring Framework Financial Restructuring: decision and management Types of Restructuring Restructuring Case Studies 6.5. Mergers & Acquisitions The M&A Process M&A Basic Tools and tasks The Due-Diligence Checklist The Controlled Auction M&A Deal Structuring Simulation Pitching Session exercise 19

20 6.6. Mergers & Acquisitions Legal Aspects Structuring an M&A Deal: main considerations Types of Process for Selling/Acquiring a Business Due Diligence Main M&A Documentation 6.7. Takeovers Public vs. Private Takeovers: definitions and main differences EU Directives and EU Regulations Defensive Strategies against Hostile Takeovers Recent Cases of Hostile Takeovers 6.8. Private Equity Type of Transactions Private Equity Players Venture Capital Expansion Capital Leveraged Transactions Case Study 20

21 6.9. Project Finance Introduction and Rationale of Project Financing Project Finance Modeling & Feasibility Study Deal Structuring: key aspects Future of Project Financing Case Study: Approach to PF Modeling (Excel) Securitization Origin and Aftermath of the Financial Crisis Definition of Securitization and Types of Securitized Instruments The Securitization Process Credit Enhancements and Main Risks Trade Finance Basic Concepts International Trade Payments Instruments Sources of Finance Other Trade Financing Methods Structured Trade Finance Export Credit Agencies (ECA) Export Credit Financing Module VII FINANCE I 7.1. Money Markets Money Market Rates Money Market Instruments Market Making Simulation 7.2. Foreign Exchange Economics & FX Spot & Crosses Forwards & Swaps Emerging Markets & Non-Deliverable Forwards Spot FX Trading Games 7.3. Equity Markets The Equity Markets Operating in the Market Supervision and Market Bad Practices Case Study 7.4. Fixed Income Products Types of Bonds Spot and Forward Rates Sensitivity of Bond Prices Practical Session with Excel Yield Curve and Yield Curve Risk Valuing Bonds with Embedded Options Actively Trading Fixed Income 7.5. Introduction to Derivatives Futures and Forwards Options Swaps 7.6. FX Derivatives FX Options: Definitions, Terminology, Uses, and Pricing Cross Currency Forwards Currency Futures Business Hedging Cases 21

22 7.7. Equity Derivatives Definition and Classification Contracts for Differences Other Ttypes of Equity Derivatives 7.8. Fixed Income Derivatives Types of Fixed Income Derivatives Pricing & Valuation Portfolio Hedging 7.9. Credit Derivatives Credit Default Swaps Definitions Pricing and Uses of CDS and CDS Indices Other Credit Derivatives Exotic Options Definition and Classification Principles of Valuation Types of Exotic Options Technical Analysis Introduction to Technical Analysis Key Chart Patterns Quantitative Technical Indicators Portfolio Management Portfolio Management Theory Types of Clients and Funds The Portfolio Management Process Fixed Income Fund Management Equity Fund Management Derivatives in Fund Management Performance Measurement Performance Measurement and Performance Attribution Risk Adjusted Performance Measures Value at Risk Performance Attribution case study Module VIII FINANCE II 8.1. Geopolitical Risk and Financial Markets Geopolitical Frameworks for Financial Markets Nature of Geopolitical Risk Alternative Approaches to Geopolitical Risk Modelling Geopolitical Risk Management: Business Diplomacy 8.2. Hedge Funds What is an Alternative Asset Class? Types of Alternative Investment Strategies Establishing a Hedge Fund Investment Program Characteristics of Hedge Funds (Returns, risks, net asset value) Introduction to Convertible Arbitrage 8.3. Regulation Banking regulation Capital Credit Rating Agencies: Implications in the Financial Crisis Crisis Management Regulatory Framework for Derivative Contracts EU Financial Stability Mechanisms 22

23 8.4. Risk Management The Nature of Risk Risk Management Failures The Risk Management Process Enterprise Risk Management Practical Cases 8.5. Structured Products Definition, Types and Pros & Cons of Structured Products Risks and Downsides Real Case & Role Play 8.6. Taxation Introduction to International Taxation Tax issues in M&A Transactions and Business Restructuring Tax Aspects in the Frame of Related Entities Asset Finance Schemes & Practical Case 8.7. Wealth Management World Wealth Distribution The Investor and Investor Profile Role Play Exercises interviews with prospect clients Private Banking Business Models Services Proposals & Investment Products 23

24 Module IX SKILLS 9.1. Advanced Excel Advanced Excel Data Analysis Introducing Macros and Visual Basic for Applications Financial Modeling 9.2. Ethics Business Ethics Theory Corporate Social Responsibility & Stakeholders Guiding Principles of Business Ethics Managing Business Ethics & Whistleblowers Ethics of Banking 9.3. International Negotiation Skills I The Negotiation Steps Types of Negotiations Finding your Negotiators Profile The Cultural Adaptation Cultural Intelligence 9.4. International Negotiation Skills II The Negotiation Method People, Problems and Processes Salary Negotiations Case Study Negotiation Skills Workshop Communicating, Persuading, Influencing and Negotiating 9.5. Presentation Skills The Presenter s Profile Preparation Phases Stage Fright, Communication and Attitude Audience, Questions and Management of Difficult People and Situations Feedback Session: Observation and Group/Individual Feedback Jae Wha Jeong KOREA What I would highlight about this Master is the hard work. It is based on daily challenges in which we face new circumstances and have to deal with them. It reflects real life in which we must work hard and face different problems, not just academic, but also dealing and working with other people, or even handling new IT programs that are fundamental in finance, such as Bloomberg, Excel, R-Studio, Eviews and even a real life investing portfolio simulator. I think the main objective of this Master is to prepare us for the real financial world. 24

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26 THE LONDON SCHOOL OF ECONOMICS SESSIONS 1. INTERNATIONAL FINANCIAL REGULATION 1.1. International Financial Regulations: Objectives and current regulatory systems 1.2. The International Financial Institutions and their Role in Financial Regulation 1.3. Regulatory Structures in individual Countries. The European Union 1.4. The debate on Regulatory Structure and Need for Reform 2. FINANCIAL RISKS 2.1. Global financial risk: Definition and consequence of liquidity risk 2.2. Securitization and CDO 2.3. Liquidity and Capital 2.4. Risk modelling 2.5. Volatility versus risk 2.6. Different models 3. EMERGING MARKETS AND THE GLOBAL ECONOMY 3.1. Economic might of Emerging markets: The key players 3.2. G7 vs. BRICs; China vs. OECD (less US and Japan) 3.3. Volatility & Growth 3.4. The BRICs and World GDP (PPP) 3.5. Long-run growth potential and outlook 26

27 4. RISKS AND REWARDS OF DOING BUSINESS IN EMERGING MARKETS 4.1. The Risks 4.2. The Rewards 5. PRIVATE EQUITY 5.1. Private Equity as an Asset Class 5.2. Running a Private Equity Firm 5.3. Acquiring Portfolio Companies 5.4. Case Studies 6. MERGERS AND ACQUISITIONS 6.1. Current M&A Backdrop 6.2. The Global M&A Market 6.3. Main Challenges Ahead 7. FUNDAMENTAL TO ABS AND CORPORATE FIXED INCOME: WHAT HAS CHANGED? 7.1. Subprime and CDOs 7.2. Major changes in mortgage markets and multiplying effects 7.3. Resettings in subprime mortgages 7.4. Ratings agencies, ratings, implications, and credit warnings 8. THE HEDGE FUND INDUSTRY 8.1. Definition, characteristics, types, and evolution 8.2. The hedge fund food chain 8.3. Strategies and Performance measurement 8.4. Hedge Funds: current views and outloook 27

28 THE WHARTON SCHOOL SESSIONS 1. VISION OF THE FUTURE FOR FINANCIAL SERVICES 1.1. The new face of the Financial Services Industry 1.2. Implications of the global financial crisis 1.3. Systematic risks during and after the crisis 1.4. Coordination across countries: recent experience and outlook 1.5. Use of Leverage in the new Economic World 1.6. The Future of Capitalism 2. VENTURE CAPITAL AND PRIVATE EQUITY 2.1. Overview of the private equity industry 2.2. Main private equity players 2.3. Structure of private equity funds 2.4. Performance of private equity funds 2.5. Future of the industry 3. PRIVATE BANKING: ASSET ALLOCATION AND WEALTH MANAGEMENT 3.1. High net worth individuals 3.2. Asset Allocation 3.3. The power of diversification 3.4. Practical application using software packages to: Estimation of the efficient frontier Monte Carlo simulation Omar Fahmy EGYPT The program structure is excellent as it covers various topics in finance which makes it both very interesting and demanding. The diversity of its students as well as the high quality of its tutors are a huge added value. The program helps open up a wide range of opportunities in the future. 28

29 4. USING FINANCIAL INFORMATION INTELLIGENTLY 4.1. Financial Performance Evaluation Framework 4.2. Deepening the understanding of the three key financial statements 4.3. Role of outside regulatory bodies 4.4. Use of financial information to assess how the business is managed 4.5. Questions Financial Statements cannot answer 5. INTERNATIONAL CASH MANAGEMENT 5.1. Introduction to international cash Management 5.2. International Payment Systems and Instruments 5.3. Organizing a Global Treasury 5.4. Managing a Global Treasury 5.5. Selecting a partner bank 6. INSTITUTIONAL VISITS IN NEW YORK CITY 29

30 THE CHINESE UNIVERSITY OF HONG KONG SESSIONS 1. CHINA S ECONOMY IN THE NEXT DECADE: CHALLENGES AND OPPORTUNITIES 1.1. What challenges is China likely to face over the next 5-10 years? 1.2. What will China need to do over the next five years? 1.3. What will China look like in the next decade? 2. CURRENT ISSUES IN BANKING 2.1. Recent developments in the Chinese banking sector 2.2. Regulatory stance and initiatives of the Bank of China and the China Bank Regulatory Commission 2.3. Current strategies adopted by Chinese banks 2.4. The history of foreign banks in China 2.5. Case discussions 3. SHADOW BANKING 3.1. Definition and background of shadow banking in China 3.2. Bank wealth management products in China(WMP) 3.3. Scenario analysis 3.4. Government measures 4. INVESTMENT BANKING LANDSCAPE IN ASIA 4.1. Fragmentation of Asia s IBD market 4.2. Asian IB product ranges 4.3. Use of M&A and JV for market entry into Asian countries 4.4. Case studies of selected Asian ECM, DCM and M&A deals 5. COMPARISON OF CHINA S EQUITY MARKETS: HONG KONG, SHANGHAI & SHENZHEN 5.1. Structure, characteristics and equity valuations relevant to the three markets: Hong Kong, Shanghai and Shenzhen 5.2. Overview of issuers and investors: Hong Kong versus Shenzhen 5.3. Types of Chinese issuers listed on the Hong Kong Exchange (HKEx) 5.4. Case Study of the major listed securities on the HKEx: 5.5. Major developments in HK s equity markets and in Shanghai s equity markets 6. ASIA S FINANCIAL SECTOR 6.1. A retrospective view: the Asian financial crisis 6.2. Main characteristics of the current financial sector in Asia 6.3. Shortcomings and challenges 6.4. China: The giant going through a big change. 30

31 7. PROJECT FINANCE AND INFRASTRUCTURE INVESTMENT IN ASIA 7.1. General overview 7.2. The special case of China 7.3. The local government financing vehicles (LGFV s): major threats 7.4. Australia and India, two successful examples 7.5. The future of Project Finance in the region 8. EMERGING ASIA: Economic Reality and Outlook of 12 Asian Economies: China, Hong Kong, Taiwan, Macao, Korea, India, Singapore, Indonesia, Thailand, Malaysia, Philippines And Vietnam 8.1. Definition and significance of Emerging Asia 8.2. Economic position of Emerging Asia in the world 8.3. Economic structure within Emerging Asia 8.4. Strengths and weaknesses of Emerging Asian economies 8.5. Trade and investment ties among Emerging Asian economies 8.6. Review of the Emerging Asian economies 8.7. Outlook for the Emerging Asian economies 9. MORE THAN 30 YEARS DOING BUSINESS IN CHINA 9.1. Characteristics of emerging markets (Pros & Cons) 9.2. Strategic challenges 9.3. Outlook for China 9.4. Strategic Issues in China today 31

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33 7 FACULTY An Experienced Team 33

34 Sofía Cedeño López USA All of the professors of the Master are highly qualified both professionally and academically. They are high level professionals from the financial sector (directors of securities and brokerage firms, and financial institutions, financial analysts, treasury desk managers, portfolio managers, etc) and they all have hands on experience in their areas of expertise. The experience during the Masters in International Finance in the IEB has been really enriching. This Masters programme has increased my self-confidence and improved my leadership and teamwork skills. Also, this has helped me obtain a global vision of finance that enhances my understanding of the markets, the economy, the banking system and the stock market s movements. IEB is without doubt a good business school with long standing, reputation and Prestige, ideal for someone who desires to continue their academic training, and to obtain a first-class Masters. All of the professors are also highly qualified academically, many of them hold postgraduate or professional degrees (Masters, Doctorates, CFA, FRM, CAIA, EFA, etc) issued by prestigious universities and / or institutions from around the world. Furthermore, their teaching capacity and ability to transmit knowledge efficiently has been largely proven over the years. 34