JCU Logo
JOHN CABOT UNIVERSITY

COURSE CODE: "FIN 330"
COURSE NAME: "International Finance"
SEMESTER & YEAR: Summer Session I 2012
SYLLABUS

INSTRUCTOR: Shaffer David
EMAIL: [email protected]
 HOURS: MTWTH 9:00-11:00
TOTAL NO. OF CONTACT HOURS: 45
CREDITS:
PREREQUISITES: Prerequisite: FIN 301
OFFICE HOURS: MTWTh by appointment
COURSE DESCRIPTION:
This course provides students with a framework in which to make financial decisions in an international context.  The material is unique in that multinational corporations (MNCs) face risks, opportunities, and institutions that purely domestic firms do not face.  Exposure to global risks and opportunities arise as a result of MNCs sourcing financial, physical, and human capital in different countries around the world, as well as encountering competitors and customers from outside their borders.  This course will help students understand, anticipate, and manage in an increasingly complex international environment.
SUMMARY OF COURSE CONTENT:
This course examines the structure and operation of the foreign exchange markets, international money and capital markets, derivatives markets, as well as financial instruments traded within these markets.  The course will examine the determination of exchange rates, the role of central banks in foreign exchange markets, and economic policies and their effect on exchange.  The ultimate goal is to consider decision-making from the perspective of an MNC within the context of these markets, including how to manage various risk exposures.
LEARNING OUTCOMES:

Possess A High Level of Familiarity with the International Financial Markets

  • Understand why firms and nations seek out and benefit from international trade.
  • Analyze and identify factors causing exchange rates to change.
  • Identify the linkages between international financial prices.
  • Understand the costs and benefits associated with different monetary arrangements.
  • Understand international financial events and put them into relevant context.

Identify and Manage the Risks Associated with Being a Multinational Firm

  • Identify and measure political risk associated with an individual nation.
  • Measure the impact of exchange rate movements on the cash flows of a firm.
  • Understand the basic mechanics of forwards, futures, and options.
  • Implement a variety of different strategies to hedge exchange rate risk.

Identify and Exploit Opportunities Associated with Being a Multinational Firm

  • Assess foreign investments and the potential value they can create for the MNC.
  • Seek out various forms of financing in an international scope.
  • Identify the benefits of international equity investing not available to purely domestic investors.
  • Measure the benefits of international equity investing in terms of risk and total return.
TEXTBOOK:
Book TitleAuthorPublisherISBN numberLibrary Call NumberCommentsFormatLocal BookstoreOnline Purchase
Foundations of Multinational Financial Management, 6th EditionAlan C. Shapiro and Atulya Sarin 978-0-470-12895-4     
REQUIRED RESERVED READING:
NONE

RECOMMENDED RESERVED READING:
NONE
GRADING POLICY
-ASSESSMENT METHODS:
AssignmentGuidelinesWeight
5 weekly quizzes30 minute quizzes will be administered at the beginning of each Thursday class except for the final quiz which will be given during the final Friday of the Summer 1 semester.  Each quiz is worth 15% of your total grade.75%
Group Project<span style="font-size: 12pt; line-height: 115%; font-family: garamond,serif;">A group currency project will be assigned whereby students track and analyzing a country&rsquo;s currency over a period of time.&nbsp; Students will be required to gather relevant economic and financial data and perform an analysis to explain the exchange rate behavior observed.&nbsp; The project instructions will be given out in class.&nbsp; <br /> </span>25%

-ASSESSMENT CRITERIA:
A:  Work of this quality directly addresses the question or problem raised and provides a coherent argument displaying an extensive knowledge of relevant information or content. This type of work demonstrates the ability to critically evaluate concepts and theory and has an element of novelty and originality. There is clear evidence of a significant amount of reading beyond that required for the course.

B:  This is highly competent level of performance and directly addresses the question or problem raised.  There is a demonstration of some ability to critically evaluate theory and concepts and relate them to practice. Discussions reflect the student’s own arguments and are not simply a repetition of standard lecture and reference material. The work does not suffer from any major errors or omissions and provides evidence of reading beyond the required assignments.

C:  This is an acceptable level of performance and provides answers that are clear but limited, reflecting the information offered in the lectures and reference readings.

D:  This level of performances demonstrates that the student lacks a coherent grasp of the material.  Important information is omitted and irrelevant points included.  In effect, the student has barely done enough to persuade the instructor that s/he should not fail.

F: This work fails to show any knowledge or understanding of the issues raised in the question. Most of the material in the answer is irrelevant.

The grade cutoffs used in this class will be:

A    94 - 100
A-   90 - 93
B+  87 - 89
B    83 - 86
B-   80 - 82
C+  77 - 79
C    73 - 76
C-   70 - 72
D+ 67 - 69
D    63 - 66
D-   60 - 62
F     Below 60
-ATTENDANCE REQUIREMENTS:
Attendance will not be explicitly factored into a student’s grade.  However, invariably attendance is directly related to student performance.  This is especially true given the nature of the material in this course.
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.
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.
SCHEDULE

The following is the outline for the course.  You will be notified in class if the schedule is changed.

Chapter 1:  Introduction: Multinational Enterprise and Multinational Financial Management
--Questions:  4, 8, 10
--Internet Exercises:  1, 2

Chapter 2:  The Determination of Exchange Rates
--Questions:  3abcdef, 7ab, 9ab
--Problems:  1abc, 3ab, 4ab, 6ab 

Chapter 3:  The International Monetary System 
--Questions:  3, 4, 5ab, 7abc, 8, 9
--Problems:  1ab, 2abc, 3abc, 4

Chapter 6:  The Foreign Exchange Market 
--Questions:  1abcde
--Problems:  1, 2ab, 3, 4ab, 5abc, 6abcde, 7ab

Chapter 4:  Parity Conditions in International Finance and Currency Forecasting 
--Questions:  1abc, 3, 5, 6, 7abcd
--Problems:  1ab, 2ab, 3, 8ab, 10abcd, 13abc, 14abc

Chapter 5:  The Balance of Payments and International Economic Linkages 
--Questions:  1, 2abc, 6
--Problems:  1abcdefg, 3abcde, 4abcdefg

Chapter 7:  Currency and Futures and Options Markets 
--Questions:  4abc, 5
--Problems:  1, 2, 3, 4ab, 5, 7abcd, 8abcd

Chapter 8:  Swaps and Interest Rate Derivatives
--Questions:  1, 2, 4
--Problems:  1abcd, 2abc, 3abc, 4abcd, Example on p. 213 of your text

Special Chapter:  Credit Default Swaps (see PowerPoint slides)
--Problems:  Be able to work examples from PowerPoint slides

Chapter 9:  Measuring and Managing Translation and Transaction Exposure 
--Questions:  5, 6, 9, 13
--Problems:  4abc, 7abc, 8abcd, 9abcde

Chapter 11:  Country Risk Analysis 
--Questions:  1, 2, 3
--Problems:  5

Chapter 13:  International Portfolio Investment 
--Questions:  2, 3, 4, 7
--Problems:  1, 2, 3, 6ab, 8, 9abcdef

Chapter 15:  Financing Foreign Trade 
--Questions:  1, 2
--Problems:  1ab, 2abc, 7