Finance 316: International Finance

Instructor: Anthony Yanxiang Gu Office: 115D South Hall

Telephone: 5368 (O) Email: gu@geneseo.edu

Office Hours: ...M.W., and by appointment.

COURSE LEARNING OBJECTIVES:

Explain the key components of the balance of payments and the factors that impact them.
Describe the characteristics of the international financial markets
Understand the determinants of exchange rates and measurements
Understand the basic currency hedging instruments and how to manage transaction exposure
Understand the concepts of arbitrage, Interest Rate Parity, Purchasing Power Parity and the International Fisher Effect
Explain the basic techniques for forecasting exchange rates

RELATIONSHIP TO THE SCHOOL OF BUSINESS EDUCATIONAL OBJECTIVES

This course provides a thorough grounding in the principles, tools, and best practices of international finance.
This course emphasizes critical thinking and international financial decision making.
This course will develop competence in written communication skills through case studies and projects.
Students are prepared to make the transition from academics to the business world through the use of real world (group) case studies.

RELATIONSHIP TO THE SCHOOL OF BUSINESS PROGRAMS AND COURSE SEQUENCE:

This is a required course for all Accounting majors. It builds on material from Accounting 102 and 103, Econ 202 and MGMT 311. It is related to MGMT 313 Security Valuation and Analysis, MGMT 370 International Business, and MGMT 390 Strategic Management.

Prerequisites: MGMT 311

Required Material:

1) Madura, Jeff International Financial Management, 11th Edition, South-Western Publishing Company, 2010.

2) The Wall Street Journal

Website Exploration:

Websites will be provided for you to explore, which will help you learn more. Your recommendation of relevant websites is appreciated.

Elements of the Grade:                                                  Points

Exam 1                                                                                  85

Exam 2                                                                                  85

Final                                                                                     100

Case 1 & presentation (75) Case 2 (55)                      130

Quizzes (Best 5 of 6, 12 points each)                              60

Class Participation & Instructor prerogative                   40

Total                                                                                      500

Grading Structure:

A 93-100              A- 90-92               B+ 87-89               B 83-86               B- 80-82               C+ 77-79

C 73-76               C- 70-72               D 60-69                 E < 60                  Normal rounding rules applied

Exam Dates:

Exam 1 Chapters 1-5                                                        February 20

Exam 2 Chapters 6-9, 11                                                 March 13

Final Exam All the Chapters                                            May 7 or 11, 8:00-11:00a.m.

 

Make-up exams will be given only in the case of a documented medical or other emergency.

 

Quizzes:

Six quizzes will be given during the semester. The quizzes are designed to ensure that students stay up-to-date with the material. Upcoming quizzes will be announced at least one class period in advance. There will be no make-up quizzes.

NOTE: All information in this syllabus and course schedule is tentative and subject to change. Adjustments may be made as the course progresses to ensure adequate coverage of topics.

Homework:

Homework will be assigned but not collected. It is important that you do the homework. The understanding of homework is critical to good examination performance. The benefits of class time will depend on the quality of your preparation prior to class. You may not always be able to complete the homework problems, but go as far as you can so you know your improvements and can ask questions in class.

Class Participation:

Students are expected to come to class prepared to participate. Your ability to raise interesting and stimulating questions and issues is greatly appreciated. Assignments will be given which involve analysis and class discussion. Class participation will be a variable factored in the final grade. You need to report your class participation each week.

Library Instruction: Late February TBA

Material to be covered:

Chapter                                                                                                                 Homework

1 Multinational Financial Management                                                           2,8,20

 

2 International Flow of Funds                                                                           4,5,7,8,13

 

3 International Financial Markets                                                                     2,3,7,8,12,18,20

 

4 Exchange Rate Determination                                                                      1,2,3,4,5,12,15

 

5 Currency Derivatives                                                                                        12,13,14,15,16,18

 

11 Managing Transaction Exposure                                                                9,10,18,26

 

6 Government Influence on Exchange Rates                                                 2,8,11,16,20

 

7 International Arbitrage and Interest Rate Parity                                           2,5,8,10,11

 

8 Relationships between Inflation, Interest

Rates, and Exchange Rages                                                                             5,9,10,23,24

 

9 Forecasting Exchange Rates                                                                         6,7,8,15

 

10 Measuring Exposure to Exchange Rate Fluctuations                             2,6,9,14,21,27

12 Managing Economic Exposure & Translation Exposure                        1,2,4,8,12

 

13 Direct Foreign Investment

 

16 Country Risk Analysis

 

19 Financing International Trade                                                                      1,4,5,6,8

CASE STUDIES:

These are group assignments involving research on current topics. Each group is required to choose and complete 2 case studies from the textbook and present one of them. Presentations are expected to start on February 6. No group should present a topic that is already presented. You are encouraged to choose topics and arrange presentation date with me as early as possible. The ones in earlier chapters may be easier while the ones in later chapters may be more exciting. Format and neatness will count. Make sure all assignments are clearly labeled. Submit your presented work a week after presentation in a pocket folder. The other one is due on April 29. Make sure the names of all group members who are to receive credit appear on the outside of the folder.

 

 

GENERAL NOTES

The case studies are group assignments. You are encouraged to form teams early, 4 in each, elect a team leader and coordinate your time and work. Make sure all assignments are clearly labeled. The grading will focus on both contest and mechanics. Thirty percent of the grade will be based on writing mechanics. The remainder of the grade will focus on how well the paper is written, your analysis of the topic and how well you synthesize the various reports and articles with classroom learning. Format and neatness will count. Creativity is strongly encouraged. Use spreadsheets to assist analysis. Submit each assignment in a pocket folder. Make sure the names of all group members who are to receive credit appear on the outside of the folder. No late submission will be accepted.

 

Please abide by the following formatting rules.

 

1. Use line spacing of 1.5, a 12-point font size and 1 inch margins

2. Number all pages. Staple them.

3. Your name and section time should be on the cover page.

4. Follow all normally accepted rules for footnotes (endnotes are also okay) and

bibliography. You may conserve paper by placing the footnotes (endnotes) and the

bibliography on the same page.

 

You also need to analyze current conditions and look into the future. You may find more information from relevant websites (IMF, The World Bank, the country). You will find the case studies interesting and challenging. It is also exciting and rewarding. Please see me if you have questions.

 

Accommodations:

"SUNY Geneseo will make reasonable accommodations for persons with documented physical, emotional or learning disabilities. Students should consult with the Director in the Office of Disability Services (Tabitha Buggie-Hunt, 105D Erwin, tbuggieh@Geneseo.edu) and their individual faculty regarding any needed accommodations as early as possible in the semester."

Library Instruction: major countries¡¯ economic and financial statistics, forecasts, particularly exchange rates.

Markets for foreign exchange futures, forwards and options, CBOT, CBOE, CME, quotes.