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Syllabus of International Financial Management
Undergraduate Class，Fall Semester
Pu jun, Assistant Professor of Finance, School of Business
University of International Business & Economics (UIBE)
E-mail address: mikepu@uibe.edu.cn
Office hour: 15:00-17:00 Thursday
Office: N533（宁远楼）
Code: ACC412
Name：International Financial Management
Prerequisite：ACC314—"Corporate Finance"
Credit: 2, 36 Hours
Textbook: Cheol S. Eun, Bruce G. Resnick, International Financial Management, 机械工业出版社2007年1月第一版
References:
1. 蒋屏，国际财务管理，对外经济贸易大学出版社2004年
2. Eiteman, Stonshill and Moffett, Multinational Business Finance, Sixth Edition.，2004 by Pearson Education, Inc. publishing as Pearson Addison Wesley
3. Alan C. Shapiro, Foundations of Multinational Financial Management, Third Edition 2005 by Prentice-Hall, Inc.
4. Butler, Kirt C. Multinational Finance (3rd Edition). 2004 by Thomson.
5. The Economist, The Financial Times(London), Business Week and Far Eastern Economic Review，Journal of Bank Research, Journal of Banking and Finance, Journal of Finance
6. http//www.cob.ohio-state.edu/dept/fin/journal/afaabout.html, http//www.cob.ohio-state.edu/fin/journal/jofsites.html
Teaching Methods: Lecture 60％+Discussion 40％
Course Description（课程简介）
This course provides an understanding of international financial environment within multinational companies, banks and other financial institutions that operate and deal with the theories and practices of multinational financial management. The course covers four main topics: International Financial Environment and Balance of Payments, Foreign Exchange Market, Foreign Exchange Determination and Fundamental Analysis and, Foreign Exchange Exposure and Risk Management, International Investment, International Financing and MNC Cash Management. Attention is not only devoted to the relationship between exchange rates and different hedging strategies that companies can use to cover their foreign exchange risk, but also to the decisions in investment, financing and operation management for MNC. More over the course covers some specific transitive economies topics, implementation of euro, etc.
Course Objectives (课程目标)
This course aims at giving a broad understanding of what International Finance is, what are the factors that can affect the financial results of a firm doing business internationally and what can the firm do to diminish its exposure to these factors. It is expected that at the end of the class you will be able to do the following:
·Understand the effect that exchange rates have on the profitability of a firm that does business internationally.
·Compare different methods to shield exchange rate exposure and choose the best suited for specific situations.
·Understand the main determinants of exchange rates.
·Describe international financial markets.
·Evaluate cash flows under different exchange rates and cost of capital for various investment alternatives. Choose the best investment alternative based in your analysis.
Course Grading （评分标准）
In-class quizzes and home assignment 10%
Case analysis (groups) 15%
Group Projects 15%
Term examination 60%
Total 100%
Detailed course plan (Outline of Units)
1. Environment for International Financial Management: An overview (Chapter 1)
Case: CORPORATE DILEMMA： Monitoring the Peso’s Value
2. International Financial Environment (Chapter 2 &3)
a)International Monetary System
b)Balance of Payment
i. Accounts of Balance of Payment
ii. Balance of Payment and the Foreign Exchange
Case:
(1)Wal-mart’s Use of International Financial Markets
(2)Arbitrage within Europe’s Exchange Rate Mechanism (ERM)
(3) Use of Currency Futures and Options by the Sports Exports Company
3. Foreign Exchange Markets and Foreign Exchange Forecasts
a)Foreign Exchange Markets: Spot market and Forward market
b)Foreign Exchange Forecasts
i. Influence of Foreign Exchange Rate
ii. International Parities:IRP, PPP, IFE and FP
iii. Forecasts Skills
Case:(1)Impact of Russian Inflation on Exchange Rates
4. Financial Derivatives
a)Foreign Exchange Future
b)Foreign Exchange Options
c)Swaps: Interest Rate Swaps vs. Currency Swaps
Case:
(1)Wal-mart’s Use of International Financial Markets
(2)Arbitrage within Europe’s Exchange Rate Mechanism (ERM)
(3) Use of Currency Futures and Options by the Sports Exports Company
5. Managing FOREX exposures:
a)Transaction exposure and management
b)Economics exposure and management
c)Translation exposure and management
Case:
(1)Dow Chemical’s Exchange Rate Exposure
(2)How U.S. Firms Are Reducing Their Economic Exposure to Exchange Rate Risk
(3)How U.S. Firms Are Reducing Their Transaction Exposure to Exchange Rate Risk
6. FDI and International Capital Budgeting
a)FDI and multinational restructuring
b)Country risk analysis and long term
c)International Capital Budgeting and APV model
Case: (1) Assessing PepsiCo’s Foreign Projects
7. International Financing Management
a)International financing instruments
b)International capital costs and capital structure
Case: (1) Cost of Capital for Subsidiaries in Mexico
8. International Working Capital Management
a)International Working Capital Management
b)International Cash Management
c)Transferring Price and Tax Management
Case: (1) Chaohong’s case
Revision: There will be a simple review at the end of course.
Group Projects:
1. Foreign currency rate forecast and Investment: use Forex Platform from www.forex.com
2. Optional: International Equity Investment (optional): use Scot Platform from www.scottrade.com
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