INBU 4200 -- INTERNATIONAL FINANCIAL MANAGEMENT

SUMMER (A TERM) 2009 LEEDS SCHOOL OF BUSINESS

M-F, 9:15 10:50; KOBL 255
Professor Michael Palmer
Office: KOBL S419
Office Phone: (303) 492-4241
E-Mail: Michael.Palmer@Colorado.EDU
Home Page: http://leeds-faculty.colorado.edu/palmerm/
COURSE DESCRIPTION:
INBU 4200 (International Financial Management) will explore many of the financial
issues confronting managers of todays global firms. The course will focus on the unique
international financial environments and associated risks that confront global firms and
the strategies managers use for dealing with these environments and risks. The course
will also monitor current events in the area of international financial markets through
various web sites and the financial press.
COURSE TOPICS:
Globalization Process and Relationship to the International Finance Function
The globalization of consumption, production and finance (including financial markets)
The implications of financial market globalization
The International Financial Environment
International Financial Markets
Foreign exchange markets and foreign exchange quotes
The International Monetary System (Gold Standard to post Bretton Woods)
Corporate objectives and corporate governance in a global setting (cultural impacts)
Foreign Exchange Rate Determination
Factors influencing exchange rates
Asset choice models
Long term parity models
Government influence and intervention/management
Foreign Exchange Exposure: Risk, Measurement and Management
The types of foreign exchange exposure facing firms and resulting risk for these firms
Foreign exchange (exposure) risk management techniques
Using financial market contracts to manage foreign exchange exposure: forward
contracts, future contracts, money market hedges, and options contracts
Operational strategies for dealing with foreign exchange exposure
Asset and Liability Management for Global Companies
Exporting, Importing, and Licensing
Foreign Direct Investment (FDI)
Wholly owned subsidiaries and Joint Ventures
Cross Border Mergers and Acquisitions

Capital structure issues

Country differences in capital structures (i.e., the use of debt and equity)
Cost of capital implications for the global firm
REQUIRED TEXT:
International Financial Management, by Jeff Madura, South Western, Abridged 9TH
edition, 2009
RECOMMENDED READINGS, THE FINANCIAL PRESS:
It is recommended that you read the Wall Street Journal and link to Bloomberg.com on a
regular basis as both will keep you current.
OFFICE INFORMATION:
Office: KOBL S419
Phone: 303-492-4241 (please leave voice message if Im not there)
E-Mail: michael.palmer@colorado.edu
Office hours: Immediately after class by appointment
WEEKLY TEXT ASSIGNMENTS AND TOPICS:
Week

Chapter Assignments and Topics By Week

Text Chapters: Part 1; 1 5

The International Financial Environment

Text Chapters: Part 2; 6 8

Exchange Rate Behavior

Text Chapters: Part 3; 9 12

Exchange Rate Risk Management

Text Chapters: Part 4; 13 18 (Note 15, 17, and 18 available on line)

Long Term Asset and Liability Management

Text Chapters: Part 5; 19 21 (Note: 19, 20 and 21 available on line)

Short Term Asset and Liability Management

COURSE GRADING COMPONENTS

1. Four weekly tests (covering lecture, emails and book material)
(Given the end of weeks 1, 2, 3, and 5)
2. Major short answer exam (end of week 4)
3. Weekly group presentation from assigned topic
(Beginning of weeks 2, 3, 4 and 5)
4. Attendance (attendance will be taken daily with a sign in attendance sheet)

40%
35%
20%
5%

COURSE GRADES:
A
B
C
D

=
=
=
=

90%
80%
70%
60%

ATTENDANCE FOR THIS CLASS AND NAME CARDS:

My expectation is that you do not leave the classroom in the middle of a lecture.
Please prepare yourself for this. Given the length of daily classes, I will generally give
the class a short break in the middle of each lecture. In addition, all students will be
provided with name cards during the first week of class. Please be responsible for these
name cards and bring them to class with you on a daily basis.
ASSIGNED READINGS:
Throughout the A term, articles will be emailed to you or posted on my University of
Colorado home page under this course. I will normally announce these shortly after
emailing or posting (generally the day of), but please be aware that you are responsible
for checking your emails and my course home page on a regular basis to see if new
material has been emailed to you or posted.
HOME PAGE LECTURE NOTES AND ASSIGNED READINGS:
Power point lecture slides and posted readings can be linked through my home page:
http://leeds-faculty.colorado.edu/palmerm/
Link to Current Courses, and then to Power Point Lecture Slides (Summer 2009).
I may also post other information on this site, such as answer keys to worksheets and
exams.
COURSE LEARNING OBJECTIVES:
1. To develop an understanding and appreciation of the critical financial issues
facing managers of international firms in todays increasingly globalized world.
2. To develop a practical framework for the analysis of exchange rates and foreign
exchange exposures including an understanding of forces affecting exchange
rates, possible models and approaches for forecasting exchange rates, and
techniques for managing various types of foreign exchange exposures.
3. To develop students understanding of current issues and use of relevant data in
the area of international finance through regular readings and discussions of
articles in the financial press and through the use of appropriate on-line web
sites.
THE 2010 LONDON SEMINAR IN INTERNATIONAL FINANCE AND BUSINESS:
Those of you interested in the summer 2010 London Seminar in International Finance
and Business please refer to the London Seminar site on my home page (http://leedsfaculty.colorado.edu/palmerm/) under Current Courses. From this site you can also
view the 2008 program itinerary.

USEFUL WEB SITES:

1. Real Time Foreign Exchange Quotes (spot rates)
http://www.fxstreet.com/rates-charts/forex-charts/
2. Historical Foreign Exchange Rates
Data and Charts: http://fx.sauder.ubc.ca/
Daily and Weekly Rates: http://www.federalreserve.gov/releases/h10/update/
Monthly and Annual Rates: http://www.federalreserve.gov/releases/g5/current/
3. Real Time Spot and Forward Exchange Rates
http://www.ozforex.com/cgi-bin/spotrates.asp
4. Real Time Financial/Business News and Financial Data
http://www.bloomberg.com/
5. United States and Foreign Stock Markets
http://finance.yahoo.com/intlindices?u
http://www.wallstreetsoftware.com/stocks.html
6. American Depository Receipts
http://www.adr.com/
7. On Line International Business Commentary
http://www.cnb.com/business/international/fxupdate.asp
8. On Line Business/Finance Commentary
http://w3.cantos.com/cantos/dyn/main.php?t=a
9. Foreign News
Japan: http://www.japantimes.co.jp/
U.K. : http://www.timesonline.co.uk/tol/global/
China: http://www.chinadaily.com.cn/
10. Links to Central Banks
http://www.bis.org/cbanks.htm
11. Links to Business News
http://news.bbc.co.uk/1/hi/business/
http://www.reuters.com/business
12. Country Background Notes and Country Corruption Measures
http://www.transparency.org/
http://www.state.gov/r/pa/ei/bgn/
13. Report on US Intervention in Foreign Exchange Markets
http://www.ny.frb.org/markets/foreignex.html
14. IMF Global Finance Reports
http://www.imf.org/external/pubs/ft/gfsr/index.htm

STATEMENTS REQUIRED/RECOMMENDED BY THE OFFICE OF

UNDERGRADUATE EDUCATION:
(1) If you qualify for accommodations because of a disability, please submit to me a letter
from Disability Services in a timely manner so that your needs may be addressed.
Disability Services determines accommodations based on documented disabilities.
Contact: 303-492-8671, Willard 322, and www.Colorado.EDU/disabilityservices. Disability
Services' letters for students with disabilities indicate legally mandated reasonable
accommodations. The syllabus statements and answers to Frequently Asked Questions
can be found at www.colorado.edu/disabilityservices.
(2) Campus policy regarding religious observances requires that faculty make every effort
to reasonably and fairly deal with all students who, because of religious obligations, have
conflicts with scheduled exams, assignments or required attendance. Please call to my
attention any religious observances which will conflict with assigned work, including, but
not limited to, scheduled exams.
(3) Students and faculty each have responsibility for maintaining an appropriate learning
environment. Students who fail to adhere to such behavioral standards may be subject
to discipline. Faculty has the professional responsibility to treat all students with
understanding, dignity and respect, to guide classroom discussion and to set reasonable
limits on the manner in which they and their students express opinions. Professional
courtesy and sensitivity are
especially important with respect to individuals and topics dealing with differences of
race, culture, religion, politics, sexual orientation, gender variance, and nationalities.
Class rosters are provided to the instructor with the student's legal name. I will gladly
honor your request to address you by an alternate name or gender pronoun. Please
advise me of this preference early in the semester so that I may make appropriate
changes to my records. See polices
at: http://www.colorado.edu/policies/classbehavior.html and at
http://www.colorado.edu/studentaffairs/judicialaffairs/code.html#student_code
Campus "Classroom Behavior" policy describes examples of unacceptable classroom
behavior. Please see http://www.colorado.edu/policies/classbehavior.html
(4) The University of Colorado at Boulder policy on Discrimination and Harassment
(http://www.colorado.edu/policies/discrimination.html, the University of Colorado policy
on Sexual Harassment and the University of Colorado policy on Amorous Relationships
applies to all students, staff and faculty. Any student, staff or faculty member who
believes s/he has been the subject of discrimination or harassment based upon race,
color, national origin, sex, age,
disability, religion, sexual orientation, or veteran status should contact the Office of
Discrimination and Harassment (ODH) at 303-492-2127 or the Office of Judicial Affairs at
303-492-5550. Information about the ODH and the campus resources available to assist
individuals regarding discrimination or harassment can be obtained at
http://www.colorado.edu/odh
(5) All students of the University of Colorado at Boulder are responsible for knowing
and adhering to the academic integrity policy of this institution. Violations of this policy
may include: cheating, plagiarism, aid of academic dishonesty, fabrication, lying, bribery,
and threatening behavior. All incidents of academic misconduct shall be reported to the

Honor Code Council

(honor@colorado.edu; 303-725-2273). Students who are found to be in violation of the
academic integrity policy will be subject to both academic sanctions from the faculty
member and non-academic sanctions (including but not limited to university probation,
suspension, or expulsion). Other information on the Honor Code can be found at
http://www.colorado.edu/policies/honor.html and at
http://www.colorado.edu/academics/honorcode/