UNIVERSITY OF MANITOBA I. H. ASPER SCHOOL OF BUSINESS DEPARTMENT OF ACCOUNTING AND FINANCE FIN 3450 INTERNATIONAL FINANCE Term 2, 2015/16

Size: px

Start display at page:

Download "UNIVERSITY OF MANITOBA I. H. ASPER SCHOOL OF BUSINESS DEPARTMENT OF ACCOUNTING AND FINANCE FIN 3450 INTERNATIONAL FINANCE Term 2, 2015/16"

Sheryl Tyler
6 years ago
Views:

1 UNIVERSITY OF MANITOBA I. H. ASPER SCHOOL OF BUSINESS DEPARTMENT OF ACCOUNTING AND FINANCE FIN 3450 INTERNATIONAL FINANCE Term 2, 2015/16 Professor: Alok Dua Office: 376 Drake Centre Telephone: Office hours: M/W pm or by appointment COURSE OBJECTIVE AND DESCRIPTION: The objective of this course is to explore various aspects Multinational Financial Management and to gain some understanding of how multinational corporations make financial decisions. The course is intended to provide the student with the theoretical and analytical tools needed to make sound business decisions in an international setting. The topical areas covered in this course include international money and capital markets, foreign exchange markets, exchange rate behaviour, exchange rate risk management, and asset and liability management. PREREQUISITE: Corporation Finance (FIN 2200) C+. COURSE MATERIALS: Text: David K. Eitman, Arthur I. Stonehill and Michael H. Moffett, Multinational Business Finance (14 th Ed.) Pearson Prentice Hall; ISBN : 13: Calculator: programmable scientific or financial model preferred. Suggested Reading: The Financial Post Wall Street Journal Business Week Economist COURSE REQUIREMENTS: Given the scope and nature of this course, your diligent preparation for this class is critical in achieving the course objective. It is mandatory, therefore, that you arrive in class well prepared to lead a discussion or to answer any specific question pertaining to the material assigned for that class. There will brief mini-case discussions in many classes, time permitting.

2 NOTES: 1. In order to relate the course material to the current international business environment, the lectures may extend beyond text material to cover current topics and advanced research in international financial management. Participation Attendance and class participation will be extremely beneficial towards keeping abreast with the class-work, and to make a positive impression on your instructor and your peers, while earning points towards your grade. Please endeavour to display your name card at all times to facilitate identification. Participation means making a substantive contribution in a fair number of classes during the term. I define a substantive contribution as any contribution that pushes the understanding of the class forward. You could argue your point of view during a case discussion, ask a relevant question, suggest an alternative viewpoint, and/or redirect our attention to another topic which had not been adequately covered. You do not have to be a top participant in every class, nor do you have to have the right answer when you do participate. Do not be afraid to speak up simply because you think your ideas might be challenged; this is the place for such challenges so long as they are made politely. Please focus on what was said, and do not attack the speaker. The Participation Grade is meant to be a stimulant to discussion, not a deterrent. I judge Participation for each session on a scale of 0 to 4. A 0 indicates no contribution, and you can earn a 0 by being silent or absent (more information on this topic later). I expect you to attend every class, but being here is not the same thing as Participation. If your contribution only consists of introducing facts, it is probably worth a 1. When you combine miscellaneous case facts into new data, you will qualify for a 2 and when you begin to make inferences you will probably earn a 3. A 4 is an outstanding contribution, recognized by everyone present. GRADING AND EXAMINATIONS: Grading: Mid-term 1 15% Mid-term 2 15% Class Participation 12.5% In class group exercise 12.5% Final Exam 45% Total 100% The final grade will depend upon the specified weighting scheme and the overall performance of the class.

3 A rough guideline that is helpful even though the grades may be curved is given below. Cumulative Marks Grade GPA A A B B C C D 1.0 Below 50 F 0.0 Students are not allowed to miss an examination unless a valid medical excuse is provided. Students with valid medical excuses must complete and submit the Medical Absenteeism Form. Both the student and the attending physician must sign this document otherwise the excuse will be deemed invalid. There will be no make-up Mid-term examination. Students who miss a component and have a valid medical excuse will have the weight of that component added to the final examination. Students who miss a component without a valid medical excuse will receive a mark of 0% on that component. Formula sheets will not be provided for the mid-term or final examination. Instead, students are permitted to bring in one 8.5 by 11 inch sheet of paper on which they can write ONLY FORMULAE (can also have graphs) on one side only. You should begin preparing your formula sheet immediately. Formula sheets must be hand-written (one side permitted). NO word-processed or photocopied material is allowed on your formula sheet. Improper formula sheets will be confiscated; offending students will be allowed to complete the exam without any formula sheet. After the exam, offending students will be referred to the Dean s office on a violation of academic integrity. Note: The final exam is cumulative.

4 No classes on Oct 12 and Nov 11 ( holidays) TENTATIVE COURSE SCHEDULE: It is the student s responsibility to read the assigned material prior to the relevant class. Date(s) Topic/Description Assigned Reading Jan 7, 12, Multinational financial management Chapter 1 14 Jan 19, 21, 26 Financial goals and corporate governance Ch 4 The international monetary system Chapter 2 The balance of payments Chapter 3 Jan 28 The foreign exchange market Chapter 5 Feb 2, 4 Foreign currency derivatives Chapter 7 Feb 9 International parity conditions Chapter 6 Feb 11 Foreign exchange rate determination bring your books Chapter 9 Feb 11 Interest rate risk and swaps ch 8 write and submit a 2 page summary on the chapter ( self study) This exercise is worth 2% of the course from your Class participation No class Feb 16, 18 Feb 23 Feb 25, Mar 1, 3 Mar 3 Mid Term 1 based on Ch 1 to Ch 9; ch 8 not included Transaction and operating exposure on Mar 1 we will have in class group exercise on Hedging and exposure, Please bring your books Chapters 10, 12 Submit A two page summery of Ch 11 This exercise is worth 2% of the course from your Class participation Mar 8 Global cost and availability of capital Chapter 13 Mar 10 Sourcing equity and Debt globally Chapter 14 Mar 15 Financial structure and international debt Mar 17 Mid Term 2 based on 10, 12, 13, 14 Mar 22 FDI theory and political risk Chapter 17 Mar 24, 29 Multinational tax management Chapter 15 Mar 31 Apr 5 Multinational capital budgeting Chapter 18 Apr 7 International Trade Finance + Working Capital Chapter 16 Management TBA Final Examination (3 hours) Comprehensive

5 AACSB Assurance of Learning Goals and Objectives. The Asper School of Business is proudly accredited by AACSB. Accreditation requires a process of continuous improvement of the School and our students. Part of student improvement is ensuring that students graduate with the knowledge and skills they need to succeed in their careers. To do so, the Asper School has set the learning goals and objectives listed below for the Undergraduate Program. The checked goal(s) and objective(s) will be addressed in this course and done so by means of the items listed next to the checkmark. Goals and Objectives Addressed Goals and Objective in the Undergraduate Program in this Course 1 Quantitative Reasoning A. Determine which quantitative analysis technique is appropriate for solving a specific problem. B. Use the appropriate quantitative method in a technically correct way to solve a business problem. C. Analyze quantitative output and arrive at a conclusion. 2 Written Communication A. Use correct English grammar and mechanics in their written Course Item(s) Relevant to these Goals and Objectives Almost all chapters Final exam + in class assignment + class participation work. B. Communicate in a coherent and logical manner C. Present ideas in a clear and organized fashion. 3 Ethical Thinking A. Identify ethical issues in a problem or case situation B. Identify the stakeholders in the situation. Ch 1, 2, 17 C. Analyze the consequences of alternatives from an ethical Ch 4, 15, 17 standpoint. D. Discuss the ethical implications of the decision. Ch 4, 15, 17 4 Core Business Knowledge Entire course Academic Integrity It is critical to the reputation of the Faculty of Management and of our degrees that everyone associated with our faculty behaves with the highest academic integrity. As the faculty that helps create business and government leaders, we have a special obligation to ensure that our ethical standards are beyond reproach. Any dishonesty in our academic transactions violates this trust. The University of Manitoba General Calendar addresses the issue of academic dishonesty under the heading "Plagiarism and Cheating". Specifically, acts of academic dishonesty include, but are not limited to: - using the exact words of a published or unpublished author without quotation marks and without referencing the source of these words - duplicating a table, graph or diagram, in whole or in part, without referencing the source

6 - paraphrasing the conceptual framework, research design, interpretation, or any other ideas of another person, whether written or verbal (e.g., personal communications, ideas from a verbal presentation) without referencing the source - copying the answers of another student in any test, examination, or take-home assignment - providing answers to another student in any test, examination, or take-home assignment - taking any unauthorized materials into an examination or term test (crib notes) - impersonating another student or allowing another person to impersonate oneself for the purpose of submitting academic work or writing any test or examination - stealing or mutilating library materials - accessing tests prior to the time and date of the sitting - changing name or answer(s) on a test after that test has been graded and returned - submitting the same paper or portions thereof for more than one assignment, without discussions with the instructors involved. Group Projects and Group Work Many courses in the Faculty of Management require group projects. Students should be aware that group projects are subject to the same rules regarding academic dishonesty. Because of the unique nature of group projects, all group members should exercise special care to insure that the group project does not violate the policy on Academic Integrity. Should a violation occur, group members are jointly accountable unless the violation can be attributed to a specific individual(s). Some courses, while not requiring group projects, encourage students to work together in groups (or at least do not prohibit it) before submitting individual assignments. Students are encouraged to discuss this issue as it relates to academic integrity with their instructor to avoid violating this policy. In the Faculty of Management all suspected cases of academic dishonesty are passed to the Dean's office in order to ensure consistency of treatment.

FIN 571 International Business Finance

FIN 571 International Business Finance I. Course Description The scope and content of international finance have been fast evolving due to the deregulation of financial markets, product innovations, and