For many years, most companies have been dealing with the challenge of having to grow their business on an international basis through export sales (international trade) or direct foreign investments (subsidiaries, JVs, etc). In the last decade, this strategy has become even more important as the world economy has become a true global market place for consumer and industrial goods as well as financial products and services.
In the course Current Issues in Finance, we mix theory, examples and practical case studies to truly understand what to do when confronted with difficult financial decisions at the corporate level. The course is split in two parts:
  1. Behavioral finance
By the end of the part on behavioral finance, students should be able to assess the impact of psychology on individual choice behavior when making financial decisions, and the subsequent implications for investment finance and corporate finance. Behavioral Finance has successfully addressed several observed anomalies, that is, empirical facts that cannot be explained using traditional Finance theories. The lectures give an introduction to Behavioral Finance starting with a brief overview of the classical paradigms for decision making under risk (expect utility theory) and the implications for portfolio selection and asset pricing.
  1. Stock market efficiency and anomalies
In this component, we address important questions related to market efficiency. We first discuss the definition of market efficiency. We then investigate in detail various market anomalies (January/December effects, Friday effect, post earnings announcement drift etc.) and discuss some psychological biases and limits of real economic agents (investors, managers, analysts,…) that might generate those anomalies.
The course provides the student with practical tools that can be used to fulfill the tasks of a manager. These tasks include (i) financing (funding, financial investments), (ii), risk management (especially hedging, that is, risk reduction), and (iii) help in decision making by offering valuation of commercial or investment proposals.