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FINA 4320.001.2162 INTERNATIONAL FINANCE
Spring 2016
Mesa Building 3227
MW 12:30 - 1:45 P.M.
Instructor: Dr. Shuming Bai
Office:
MB 2250
Telephone: (432) 552-2194
Email:
[email protected] ; Lecture Notes and Announcements are on Blackboard.
Office Hours: M 2:00 - 5:30 p.m., W 4:00 – 5:30 p.m. and by appointment
Course Description
Course Catalog Description:
This course is intended for students who have passed FINA 3320 Principles of Finance. It
extends principles of finance to international corporations in the rapid globalization of the
economy. Specifically, this course study comprehensively three broad topics: (1) international
financial environment, including International Monetary System; (2) currency exchange
mechanisms in theory and practice; and (3) currency risk management, including interest rate
and currency derivatives. The goal of the course is to provide today’s financial mangers with the
fundamental concepts and the tools necessary to be effective global managers.
Course Objectives / Student Learning Outcomes:
This course introduces students to the international aspects of corporate finance. Topics include,
but are not limited to, foreign exchange rate systems, balance of payments, international parity
conditions, international monetary organizations, currency derivatives, exchange rate risk
management, international financial markets, and global financing. After studying the course,
students will be able to
(1) evaluate foreign exchange rate systems
(2) compare and contrast key economic theories that underlie the foundation of foreign
exchange risk management, including IRP, PPP, and IFE theories)
(3) compute foreign exchange (FOREX) rates and analyze the role of FOREX markets in
international operations
(4) manage foreign exchange risks by utilizing the various forms of financial instruments
(5) identify long- and short-term asset and liability management of multinational corporation
(6) practice hands-on experience on trading forex spot and futures using trading software
Course Prerequisites:
FINA 3320 Principles of Finance
Assessment that Student Learning Outcome Competencies Are Met:
(1) Problems and Applications
(2) Cases
(3) Exams
Computer Integrations
(1) Students will access financial information from the internet to solve financial problem
(2) Students are encouraged to use the online practice quizzes and supplemental resources
available from the text’s publisher (http://academic.cengage.com/finance/madura).
FINA4320_IF_SP16_Dr.Bai
Course Requirements and Procedures:
A. Required Materials:
1. Madura, Jeff, International Financial Management, Abridged 12th ed., 2016, South-Western
Cengage Learning. ISBN-13: 9781305117228. You will also need a calculator.
2. Subscribe “Stocktrak” (www.stocktrak.com). Do not subscribe it until we meet in class with
more details.
Recommended materials:
Current issues of financial magazines and publications are strongly recommended, such as the
Financial Times (http://www.ft.com/home/us) and Wall Street Journal
(http://online.wsj.com/public/us), Fortune, Business Week, Bloomberg.com; marketwatch.com.
Grading:
Grades will be based upon your performance on the class assignments/activities/exams
using the following weights:
Course Activity
Percentage of Total Grade
Exam I
20%
Exam II
20
Cumulative Final Exam
30
Homework/Quizzes
10
Forex Trading Simulation
10
Harvard Bus. School Case
7
Current Event Write-ups
3
Total
100%
Grading Scale:
A
90 and above
B
80 to 89
C
70 to 79
D
60 to 69
F
Below 60
Relevant Dates: First day of class: 1/19; Census: 2/3; Last day to drop: 4/1; Last Class day: 5/5.
FINA4320_IF_SP16_Dr.Bai
Tentative Course Schedule:
The dates and chapters are tentative and may be changed with verbal notice during assigned class time, as needed.
It is the student’s responsibility to attend class and keep up with any changes and announcements.
Week
Topic
Reading
Wk 1
Syllabus; Multinational Financial Management
Ch1
Wk 2
International Flow of Funds (Balance of Payments)
Ch2
Wk 3
International Financial Markets
Ch2
Basic trading terminology and tools (not in book)
Ch3
Wk 4
Review Ch1-4 for Exam 1 (important – Do Not skip this class)
WK5
Exam I , Monday
Ch1-3
Exchange rate determination
Ch4
Conduct your first trade – watch trading videos
Wk 6
Exchange Rate Determination Currency Derivatives
Ch5
Wk 7
Government Influence on Exchange Rates
Ch6
Wk 8
Trading 1 Report due
International Arbitrage and Interest Rate Parity
Ch7
How to Trade Futures (not in book); Conduct Trade 2
Exam 2, Wednesday
Ch4-5
Spring Break !!!
Wk9
Trading 2 Report;
Ch7
Ch7 cont’d
Wk 10 Relationships among Inflation, Interest Rates, and Exchange Rates
Ch8
Wk 11 Measuring Exposure to Exchange Rate Fluctuations
Ch10
Wk 12 Managing Transaction Exposure
Ch11
Wk 13 Group Case due
Ch7,8,10,11
Practice on Trading 3
Ch8, 10-12
Wk14
Managing Economic and Translation Exposures
Ch12
Forecasting Exchange Rates
Ch9
Wk 15 Trading 3 Report due
Ch9 Ch1-12
Ch9 cont’d and FX trading techniques* (outside material)
Review for the Final (Important – Do not skip this class)
Student group presentation case or trading
Wk 16 Cumulative Final Exam, Per University Calendar
Ch1-12
FINA4320_IF_SP16_Dr.Bai
FINA4320_IF_SP16_Dr.Bai