The World Bank/Republic of Turkey Treasury Department

Finance Training Course
Professor Ian Giddy
The Stern School of Business
New York University

Objectives of this module

The objective of this course module is to provide those who participate in the global financial markets with the basic tools and language of the markets for managing interest rate and currency risk. The module delves into the theory and workings of the international money and capital markets, with a heavy emphasis on the foreign exchange and Euromarkets and the derivative swap and option markets. The module aims to enable participants to evaluate and structure hybrid financial instruments for borrowing and investing purposes.

The basis is certain fundamental theoretical principles of finance and international money, such as bond valuation, fixed versus floating excahnge rates and interest rate parity. Yet the learning method is thoroughly applied, with numerous situational problems and brief puzzles for participants to work on.

Required Text:

Ian Giddy, Global Financial Markets, selected chapters.
Excerpts from Dufey and Giddy, The International Money Market, 2nd ed., and from Walmsley, The New Financial Instruments.

Additional recommended books:

1. Julian Walmsley, The New Financial Instruments (New York: Wiley, 1988)
2. Julian Walmsley, Global Investing (London: Macmillan, 1991)
3. Clifford Smith, Charles Smithson and Sykes Wilford, Managing Financial Risk (Ballinger, 1990)

World Bank Seminar on Finance in Turkey
Republic of Turkey INTERNATIONAL FINANCE MODULE Professor Ian Giddy
Mon a.m. 1 Foreign Exchange & Eurocurrency Markets GFM Ch 2 Aunt Helen; GFM Ch.2 Problem 4; Tea in England


 p.m. 2 Foreign Exchange Instruments 

GFM Ch 7

GFM Ch.7 Problems 1,2,3; Banca Commerciale Italiana
 Tues a.m. 3 Interest Rate Forwards, FRAs and Swaps IMM Ch 3 GFM Ch.13 Questions 7,8; Kleinwort's Bulldog Hedge


 p.m. 4 Currency Swaps GFM Ch 13 Kiwi Magic


a.m. 5 Swap Valuation, Reversal and Trading 

GFM Ch 13

The Aussie Unswap; GFM Ch.13 Problem 18




6 Using Swaps in the Management of Assets and Liabilities 

Swaps and Synthetic Securities, Including Synthetic FRNs 

Walmsley, Ch 13

GFM Ch.13 Problem 21;  

Mr Kang Visits Carolina



a.m. 7 Currency Options: Pricing and Hedging 

GFM Ch 8

GFM Ch 8 Problems 3,6


 p.m. 8 Currency Options: Uses and Abuses 

A Roadmap for the Use of Forwards, Futures, Options and Swaps 

Walmsley, Ch 13

ICI Proposes; GFM Ch.8 Problems 11,12
 Fri a.m. 9 Evaluating and Structuring Hybrid Financial Instruments GFM Ch 17 Den Danske; BIG


 p.m. 10 Innovations in the International Capital Markets GFM Ch 16 

Review and Recap

Digging Under Tombstones
 Sat     Course Examination  
      Examination Postmortem  

Ian H. Giddy, Professor of Finance
New York University Stern School of Business
44 West 4th Street, New York 10012
Tel 212 998-0332 Fax 212 995-4233 

Go to Giddy's Web Portal Contact Ian Giddy at