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JOHN CABOT UNIVERSITY
COURSE CODE: "FIN 330"
COURSE NAME: "International Finance"
SEMESTER & YEAR:
Spring Semester 2012
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SYLLABUS
INSTRUCTOR:
Antonelli Alessandro
EMAIL: [email protected]
HOURS:
MW 13:00-14:15
TOTAL NO. OF CONTACT HOURS:
45
CREDITS:
PREREQUISITES:
Prerequisite: FIN 301
OFFICE HOURS:
10:30-11.00 and by appointment
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COURSE DESCRIPTION:
This course is designed to give students a wide and sound conceptual framework for analysing key financial decisions that are appropriate for multinational firms. It focuses on the study of corporate policies in the fields of risk management, investment and financing, being planned and being conducted under different political, government and market constraints, and in different currency denominations. The course also gives students the opportunity to examine a broad variety of examples, mini-case studies and special reports, related to decisions by multinational firms and showing the use of financial concepts, theories and practices to assess the contemporary global financial environment, identify threats and opportunities, execute strategies, measure and manage corporate governance and exposure to risk.
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SUMMARY OF COURSE CONTENT:
The International Financial Environment.
Exchange Rate Behaviour.
Exchange Rate Risk Management.
Long-Term Asset And Liability Management.
Short-Term Asset And Liability Management.
International Banking And International Finance Outlook, Main Trends.
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LEARNING OUTCOMES:
By the end of this course, you will have done, or be able to:
Understand why firms and nations seek out and benefit from international business activities.
Comprehend the links between countries and the causes of the international flow of funds.
Understand how international money markets, international credit markets, international bond markets and international stock markets serve
multinational corporations.
Dissect the basic factors that affect currency values and the nature of central bank intervention in foreign exchange markets.
Identify the key equilibrium relationships among inflation rates, interest rates and exchange rates.
Analyse the main techniques and the main foreign exchange and derivative markets used by multinational corporations to measure and manage their
currency risks.
Examine the management of long-term assets and liabilities, including motives for direct foreign investment, multinational capital budgeting, country risk
analysis, and capital structure decisions.
Examine the management of short-term assets and liabilities, including trade financing, other short-term financing, and international cash management.
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TEXTBOOK:
| Book Title | Author | Publisher | ISBN number | Library Call Number | Comments | Format | Local Bookstore | Online Purchase |
| International Financial Management | Jeff Madura and Roland Fox | South-Western Cengage Learning | 9781408032299 | | | | | |
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REQUIRED RESERVED READING:
RECOMMENDED RESERVED READING:
| Book Title | Author | Publisher | ISBN number | Library Call Number | Comments |
| Handouts and additional abstracts will be provided during the course. | . | | . | | |
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GRADING POLICY
-ASSESSMENT METHODS:
| Assignment | Guidelines | Weight |
| a) Exam 1; b) Exam 2 c) Exam 3; d) Class participation and presentations | Three exams, 85% as follows: first exam 22.5%; second exam 22.5%; third exam 40%. These exams will consist of essay-type questions, graphic analysis, as well as some problems that require quantitative analysis, in which the student is asked to explain and/or solve with accuracy and clarity issues of a particular topic covered by the syllabus. <br />
Class participation and cases presentation (15%): the class participation grade will reflect the student’s preparation of the assigned material, her or his ability to follow the flow of class discussion, and her or his interventions during class. Class discussion will focus on mini-cases and exercises that will be assigned from time to time by the professor. Students should be prepared to offer an oral summary of the written assignments and the key facts to the class, as well as to present their views regarding the possible questions. Students will also be required to prepare written summaries of their analyses. Repeated unjustified absences will negatively affect the class participation grade. <br /> | a) 22.5%; b) 22.5%; c) 40%; d) 15% |
-ASSESSMENT CRITERIA:
At the end of the term, students with 95-100 points will receive an A; 90-94 an A-. An “A” grade is reserved for students who consistently submit outstanding work and
have shown to fully understand the concepts covered, the various quantitative tools presented and their applications.
Students who receive 87-89 points will receive a B+; 84-86 a B; 80-83 a B-. A “B” grade is reserved for students who show a highly competent level of performance, and
whose work does not suffer from any major errors or omissions.
Students who receive 77-79 points will receive a C+; 74-76 a C; 70-73 a C-. A “C” grade is reserved for students who show an acceptable level of performance, with
answers that are clear but limited, with some minor omissions and inaccuracies but no major errors.
Students who receive 67-69 points will receive a D+; 64-66 a D; 60-63 a D-. A “D” grade is reserved to below average students whose work will typically lack a coherent
grasp of the problems and issues raised in the question, omit important information, include irrelevant points and generally be too brief or even incomplete.
Students who receive fewer than 60 points will fail.
-ATTENDANCE REQUIREMENTS:
The University attendance policy is described in the catalogue. Persistent absence or tardiness usually precludes satisfactory performance in the course, and jeopardizes that part of the grade that is based on class presentation and participation. Students are expected to arrive to class on time; students are responsible for all material covered by the syllabus and/or discussed in class, whether or not they are actually present in class. Please refer to the university catalog for the attendance and absence policy.
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ACADEMIC HONESTY
As stated in the university catalog, any student who commits an act of academic
dishonesty will receive a failing grade on the work in which the dishonesty occurred.
In addition, acts of academic dishonesty, irrespective of the weight of the assignment,
may result in the student receiving a failing grade in the course. Instances of
academic dishonesty will be reported to the Dean of Academic Affairs. A student
who is reported twice for academic dishonesty is subject to summary dismissal from
the University. In such a case, the Academic Council will then make a recommendation
to the President, who will make the final decision.
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STUDENTS WITH LEARNING OR OTHER DISABILITIES
John Cabot University does not discriminate on the basis of disability or handicap.
Students with approved accommodations must inform their professors at the beginning
of the term. Please see the website for the complete policy.
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SCHEDULE
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PART I - THE INTERNATIONAL FINANCIAL ENVIRONMENT
1/16/2012 Chapter 1, Multinational financial management, an overview
1/18/2012 Chapter 2, International flow of funds
Prepare (*) Critical debate: Should an MNC reduce its ethical standards to compete internationally?
(*) Read the materials carefully, with a view to:
a) answering the questions in the text;
b) following the class presentation assigned from time by time to one of the students;
c) getting involved in class discussion. Critical debate exercises: a controversial issue is introduced, along
with opposing arguments, and students are asked to determine which argument is correct and explain why.
1/23/2012 Chapter 2, International flow of funds, cont.
Critical debates: 1) Trade and human rights; 2) International finance and accountability
1/25/2012 Chapter 3, International financial markets
Critical debate: Should firms that go public engage in international offerings?
1/30/2012 Chapter 3, International financial markets, cont.
Critical debate: Stock markets are inefficient
2/1/2012 Chapter 4, Exchange rate determination
Critical debate: How can persistently weak currencies be stabilized?
2/3/2012 Make up for Monday, April 9 - Chapter 5, Currency derivatives
2/6/2012 Chapter 5, Currency derivatives, cont.
Critical debate: Hedging
2/8/2012 Case studies and exercises
Program review exam 1
2/13/2012 Exam 1 (Part I: Ch 1, 2, 3, 4, 5)
PART II – EXCHANGE RATE BEHAVIOUR
2/15/2012 Chapter 6, Exchange rate history and the role of government
Critical debate: 1) To join or not to join; 2) The gold standard
2/20/2012 Chapter 7, International arbitrage and interest rate parity
Critical debate: Should arbitrage be more regulated?
2/22/2012 Chapter 8, Relationship among inflation, interest rates, and exchange rates
Critical debate: Does PPP eliminate concerns about long-term exchange rate risk?
PART III – EXCHANGE RATE RISK MANAGEMENT
2/27/2012 Chapter 9, Forecasting exchange rates
Critical debate: What should an MNC use to forecast when budgeting?
2/29/2012 Chapters 10, Measuring exposure to exchange rate fluctuations
Critical debate: Should investors care about an MNC’s translation exposure?
3/5/2012 Chapter 11 , Managing transaction exposure
Critical debate: Should MNCs hedge?
3/7/2012 Chapter 12, Managing economic exposure and translation exposure
Critical debate: Should an MNC reduce expected profits by hedging as in the Mannerton example
in order to limit losses in less likely scenarios?
Program review exam 2
3/12/2012 Exam 2 (Part II and III: Ch 6, 7, 8, 9, 10, 11, 12)
PART IV - LONG-TERM ASSET AND LIABILITY MANAGEMENT
3/14/2012 Chapter 13, Foreign direct investment
Class discussion: Trends and perspectives of international mergers and acquisitions
Critical debate: Should MNCs avoid foreign direct investment in countries with liberal child labor laws?
3/16/2012 Make up for Wednesday, April 25 - Chapter 14, Multinational capital budgeting
3/26/2012 Chapter 14, Multinational capital budgeting, cont.
Critical debate: Should MNCs use net present value techniques to value foreign projects?
3/28/2012 Chapter 15, Country risk analysis
Critical debate: Does country risk analysis make other forms of risks meaningless?
4/2/2012 Chapter 16, Long-term financing
Critical debate: Are swaps deceiving the market?
PART V - SHORT-TERM ASSET AND LIABILITY MANAGEMENT
4/4/2012 Chapter 17, Financing international trade
Critical debate: Do government agencies promoting exports benefit the recipient country?
4/11/2012 Chapter 18, Short-term financing
Critical debate: Do MNCs increase their risk when borrowing foreign currencies?
4/16/2012 Chapter 19, International cash management
Critical debate: Should an MNC’s subsidiary operate their own cash management policies?
4/18/2012 Case studies and class discussion:
International banking and international finance outlook, main trends
4/23/2012 Last Day of Class – Program review exam 3
Exam 3 (Part IV and V: Ch 13, 14, 15, 16, 17, 18, 19): See university schedule for date/time of this final examination.
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