PHILADELPHIA UNIVERSITY
SYLLABUS
FINC 318
INTERNATIONAL FINANCE AND DEVELOPMENT
Spring 2012
Instructor
: Dr. D.K. Malhotra
Office
: 102 Tuttleman
Office Phone
: 215 951-2813
E-mail
:
Malhotrad@philau.edu
Office Hours
: 10:00 am – 11:30 am Mondays and Wednesdays or by appointment.
Web Address
:
http://faculty.philau.edu/MalhotraD
Required Text:
International Financial Management
by Jeff Madura, 11th Edition Cengage Learning,
ISBN-10: 0538482966 ISBN-13:
9780538482967.
Additional Recommended Readings:
The Wall Street Journal,
Euromoney
Business Week
The Economist
Far Eastern Economic Review
Course Description:
This is an advanced course in international finance, which explores
interrelations between the economic theory of growth/development and financial
applications in emerging countries. This course will also examine the
international financial system. Projects and case studies will be assigned to
ensure a realistic view of international finance.
Prerequisite:
All students must have completed ACCT 101, STAT 201, or MATH-321.
Course Objective:
The objective of the course is to teach students how principles of economics and
international finance are being used in various countries as well as by various
multinational corporations in solving the fundamental financial and economic
problems facing all businesses including non-profit and government.
Requirements:
1. Attend class regularly.
2. Do homework.
3. Study class notes prior to next class and come prepared to the class to
participate actively in discussions.
4. Be able to take time pressure tests.
Attendance:
Attendance is mandatory. You are responsible for what is covered in the class
and any absence on your part leaves you responsible for finding out what was
presented in class. You will benefit a lot from the course by doing problems and
reviewing concepts, which are covered in the class.
Grading:
· Exam I
25%
· Exam II
25%
· Final Exam
25%
. Class participation
10%
· Country Analysis
15%
No late homework will be accepted. No makeup exams will be given. If you miss an
exam due to an unavoidable reason, the grade on the missed exam will be
transferred to the final exam. THE FINAL EXAM IS COMPULSORY AND
COMPREHENSIVE. DO NOT EXPECT ANY SCALING ON THE GRADES.
Help Sessions:
I do plan on devoting class before each exam reviewing the material, which will
be covered on the test.
Academic Honesty:
Students are expected a code of honesty which prohibits cheating on the test and
plagiarizing others' work. Violation of this code may result in failure of the
course.
Grading Policy:
The following grading policy will be followed for assigning a letter grade in
this course.
93 and above A
90-92
A-
87-89
B+
83-86
B
80-82
B-
77-79
C+
73-76
C
70-72
C-
60-69
D+
Less than 60
F
TENTATIVE COURSE OUTLINE:
01/12
An Introduction to Multinational Financial Management
International Finance: Meaning and Scope
why should we study International Finance?
Goal of Multinational Financial Management
01/17
Goal of Multinational Financial Management
01/19
International Financial Markets
Foreign Exchange Market
01/24
International Financial Markets
Eurocurrency Market
01/26
International Financial Markets
01/31
Exchange Rate Determination
Measuring Exchange Rate Movements
Exchange Rate Equilibrium
Factors that Influence Exchange Rate Movements
02/02
Exchange Rate Determination
02/07
Exchange Rate Determination
02/09
Government Influence on Exchange Rates
Exchange Rate Systems
Fixed Exchange Rate System
Floating Exchange Rate System
02/14
Government Influence on Exchange Rates
Managed Float System
Pegged Exchange Rate System
Exchange Rate Mechanism
Target Zones
02/16
Government Influence on Exchange Rates
02/21
Exam I
02/23
Interest Rate Parity
Derivation of Interest Rate Parity
Test of Interest Rate Parity
Interpretation of Interest Rate Parity
Does Interest Rate Parity Hold?
02/28
Relationship between Inflation, Interest Rates, and Exchange
Rates
Purchasing Power Parity
International Fisher Effect
03/01
Currency Futures and Options
Currency Futures Market
Currency Options Market
03/06
Currency Futures and Options
03/08
Currency Futures and Options
Currency Call Options
Currency Put Options
03/20
Measuring Exposure to Exchange Rate Fluctuations
Transaction Exposure
Economic Exposure
03/22
Measuring Exposure to Exchange Rate Fluctuations
03/27
Measuring Exposure to Exchange Rate Fluctuations
03/29
Managing Transaction Exposure
Techniques to Eliminate Transaction Exposure
04/03
Exam 2
04/05
Managing Economic Exposure
Techniques to Eliminate Economic Exposure
04/10
Direct Foreign Investment
Benefits of Direct Foreign Investment
Benefits of International Diversification
04/12
Direct Foreign Investment
04/17
Multinational Capital Budgeting
Subsidiary versus Parent Perspective
Factors to Consider in Multinational Capital Budgeting
04/19
Multinational Capital Budgeting
Examples on Multinational Capital Budgeting
04/21
Student Presentation of Country Analysis
04/26
Review for Final Exam
International Finance and Development
FINC 318
Country Risk Analysis
Spring 2011
You work as a junior analyst in the new projects division of a multinational
corporation. Your company is considering a proposal to expand its operations to
a new country (of your choice) which has recently opened up its economy to the
outside world. Before committing its resources to the new country, the CEO wants
a full report on the prospects of the success or failure in that country. Your
boss in the new project division has asked you to conduct a detailed economic
and political analysis of the country and prepare a detailed report on
undertaking investment in that country. You should provide a recommendation,
which "YOU" think, is correct and not what other "experts" think is correct.
· You must provide the name of the country that you want to analyze by January
24,
2011.
· You may not be able to change the country for your project after the initial
selection.
· You must submit the project by the due date. If you do not submit the project
by the due date, you will lose three points from the score for your project.
· If you choose not to do the project, you will receive an "F" in this course.
Your report should be organized along the following lines.
Format:
1. Your report should start with a clear cut recommendation as to whether the
company should go ahead with the investment or should not invest in that country
along with a summary of the reasons
2. Discuss each and every reason in detail.
3. Attach a copy of all your sources of information to substantiate your
arguments.
Your report should not exceed ten pages (excluding supporting documents).
Sources of Information for Your Project:
1. Euromoney
2. Asiamoney
3. Business Week
4. Lexis-Nexis
5. Dept. of Commerce Reports on Individual Countries
6. The Economist
7. Far-Eastern Economic Review
8. The Wall Street Journal
9. The Asian Wall Street Journal
10. The World Wide Web
11. International Business
Various issues of Euromoney will be very helpful in completing this project.
Due Dates:
·
Two page proposal due by February 16, 2012
o
Proposal should provide reason for choosing this country and identify sources of
your information to analyze this country. By this time, you should have done
library research on your country
·
Midterm report due by March 22, 2012
o
A report that outlines your global analysis, continent analysis, and to some
extent country analysis is needed by this deadline. It should be about 4 pages
·
Final project report due by April 17, 2012.