FINC 439
International Finance
- Catalog Entry
FINC 439. International Finance
Three hours lecture.
Prerequisite: FINC 331 or Instructor permission.
FINC 439 deals with the international dimension of business finance with a new focus on the globalization of financial markets.
- Detailed Description of Content of Course
(1) The Overview of International Finance
(a) The Importance of International Finance
(b) The Rewards of International Finance
(c) The Risks of International Finance
(2) Introducing the Foreign Exchange Markets
(a) Cash and Spot Exchange Market
(b) The Spot Foreign Exchange Market
(c) Direct Versus Indirect Exchange and Cross Exchange Rates
(d) Forward Foreign Exchange, Currency Futures, and Currency Option
(3) The Law of One Price
(a) The Purchasing-Power Parity Principle
(b) Interest Parity
(4) Foreign Exchange Risk and Exposure
(a) The Nature of Exchange Rate Risk
(b) Hedging Versus Speculating on Exchange Rate
(5) Short-Term International Financial Markets and Management
(a) International Banking
(b) Cash Management
(c) Eurodollars and Eurocurrencies
(6) Long-Term International Financial Markets and Management
(a) Equity Financing
(b) Bond Financing
(7) Foreign Direct Investment (FDI)
(a) Capital Budgeting for FDI
(b) The Growth of Multinational Corporations
(8) Financial Decision Making for International Operations
(a) Cash Flow Analysis of International Operations
(b) Determining the Risk Adjusted Rate of Return for International Operations
(c) Measuring Profitability and Operating Efficiency of International Operations
- Detailed Description of Conduct of Course
FINC 439 is taught primarily as a lecture-discussion course. Text materials will be supplemented with outside readings. Quantitative Techniques will be introduced or reviewed as needed. Students will use electronic spreadsheets to facilitate analysis. A semester project will be required.
- Goals and Objectives of the Course
Having successfully completed the course the students will be able to:
1. Explain the operation of foreign exchange markets, spot and forward.
2. Plan appropriate strategies for hedging foreign exchange risk.
3. Plan appropriate strategies for international cash management.
4. Explain the organization and operation of international banking operations.
5. Determine the appropriate relative amounts of debt and equity financing for the multinational firm.
6. Plan and execute the capital budgeting program for foreign direct investment.
7. Measure the profitability and efficiency of international operations.
- Assessment Measures
The students will be evaluated on their performance on class examinations, term paper(s), assignments, and class participation.
- Other Course Information
Outside readings will be assigned as listed in 3(d).
- REVIEW AND APPROVAL
DATE ACTION APPROVED BY
September 2001 Reviewed Dr. Dan Davidson, Chair |