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Steven R. Cox, Ph.D.

F494 – International Financial Management

Indiana University

Fall 2009

Dr. Steven Cox   (print friendly version)

Time

6:00 – 8:40, Wednesdays

Room

BS3015

Office Hours

8:40 – 9:15 (after class – IUPUI campus)

10:45 – 11:25 MW and 4:30 – 5:25 W (Kokomo campus)
and by appointment

Office

KO 174J 

Work Phone

(765) 455-9314

Mobile Phone

(317) 696-0571

Email

scox@iuk.edu 

Web Site

http://www.iuk.edu/~bussrc/

Required Text

Madura, International Financial Management, 9th Edition

 

Course Objectives
This course is designed to provide an understanding of the international environment in which firms and individuals operate and an introduction to international financial management. The course will include an overview of the international financial markets and the relationship between these markets. Students will learn the factors that influence exchange rates and how exchange rates affect trade, why countries adopt a particular exchange rate system and the implications of this decision, and how international arbitrage links prices, exchange rates and interest rates around the world. The course will examine how firms manage the risks of doing business internationally using financial instruments such as forward, futures, and options contracts. The course will examine international investment decisions, and how firms finance their projects in international capital markets. 

 

Grading 

Exam 1

100

Exam 2

100

Exam 3

100

Country Presentation

50

Study Group Peer Review

34

Attendance

16

Total Points

400

 

Grading Scale 

 96% - 100%

A+

90% - 96%

A

89% - 90%

A-

86% - 89%

B+

80% - 86%

B

79% - 80%

B-

76% - 79%

C+

70% - 76%

C

69% - 70%

C-

66% - 69%

D+

60% - 66%

D

59% - 60%

D-

Below 59%

F

 

 

 

 

Exams
Unexcused absences will result in zeros on exams. Exams will consist primarily of multiple-choice questions. The first exam is on September 30th. The second exam is on November 4th. The third exam is on December 16th.         

Country Paper and Presentation

Each assigned group of approximately four students will investigate the impact of the current recession on a country other than the United States. The investigation should include factors that made the country more or less vulnerable to the decline and the prognosis for recovery. Special emphasis should be placed on unemployment and production figures, the impact on the country’s currency, the actions taken by the country’s central bank, government incentive programs, prospects for inflation, etc. The result should be a 5 - 7 page paper and a 20-minute class presentation. The overall project is worth 50 points. The presentation will be worth 10 points. The layout, organization, spelling, grammar, and cohesiveness of the paper will be worth 20 points. The remaining 20 points will be allocated to the finance content.

 

Active Learning/Peer Review

The format of most class sessions will include a lecture/discussion of approximately 70 minutes. After that, we will have a break, a country presentation (when applicable) and we will break down into our groups to discuss, teach, and learn the topics of the day. Selected problems from the text will be used to guide the discussions. Conclusions may be shared with the class as a whole. At the end of the semester, group members will peer review other members of their learning group. This process is meant to encourage participation during our breakouts into active learning sessions. The peer review is worth a maximum of 34 points.

 

Attendance
Attendance is expected. Each of the sixteen classes is worth one point for full attendance (beginning through end). There are no exceptions to this scoring process. In each of the class meetings, signatures will be collected near the beginning and the end of class. Any student found to be signing for another student will be subject to the terms of the honor code (see below).

 

Additional Recommended/Required Reading

It is important that you keep up with current events in this course. Good sources for current events relevant to international finance are the The Wall Street Journal, The New York Times, the London Financial Times, Business Week, and The Economist.

 

Honor Code

Honoring academic integrity is a priority of the Kelley School of Business.  Students are expected to do their own work. Cheating will be punished with a failing grade and could result in dismissal from the Kelley School of Business. Plagiarism on papers has become a serious issue facing the integrity of the Kelley School of Business degree, and it will not be tolerated.

 

Expectations

Remember that you are enrolled in the Kelley School of Business, an internationally recognized business school. Each of you can succeed in this class if you devote time and energy to learning the material. This is not a class where you can learn (and pass) by simply showing up. You will need to read the chapters prior to coming to class to fully understand the material covered in class, and you will need to practice the assigned problems so that you become proficient in dealing with international finance issues.

 

I encourage questions and commentary in class. While my campus office hours are after class on Wednesdays, I also encourage e-mails and phone calls (use my mobile phone number provided above).       

 

If unusual circumstances cause you to arrive late, please take a seat quietly so you do not disturb the class. Do not leave the classroom during class except if you are feeling ill. We will have a break in the middle of the class. Turn off your portable electronic devices during class. If you are taking notes with a laptop your attention should be fully focused on the class. Finally, do not talk while other people are talking. This is disrespectful to your fellow students.

 

Course Schedule

 

Chapter

Topics and Presentations 

Date

1

Multinational Financial Management

Aug 26

2

International Flow of Funds

Sep 2

3

International Financial Markets

Country Presentation 1

Sep 9

4

Exchange Rate Determination

Country Presentation 2

Sep 16

5

Currency Derivatives

Sep 23

 

Exam 1

Sep 30

6

Government Influence of Exchange Rates

 

Oct 7

7

International Arbitrage and Interest Rate Parity

 

Oct 14

8

Relationships among Inflation, Interest Rates, and Exchange Rates 

Country Presentation 3

Oct 21

 

Country Presentations 4 - 7

Oct 28

 

Exam 2

Nov 4

10

Measuring Exposure to Exchange Rate Fluctuations

Country Presentation 8

Nov 11

11

Managing Transaction Exposure

Country Presentation 9

Nov 18

12

13

Managing Economic Exposure and Translation Exposure

Direct Foreign Investment

Country Presentation 10

Dec 2

14

16

Multinational Capital Budgeting

Country Risk Analysis

Country Presentation 11

Dec 9

 

Exam 3

Dec 16