Finance 343

International Finance
Section 001: 10:30 AM 11:45 A.M. T,Th Room RL 0010
Spring 2017

1. INSTRUCTOR INFORMATION

Professor: Charles J. Kelly, Jr.

Office: BE 2084
Phone: 437-2203
E-mail: cjkelly@usi.edu
Office Hours: Wednesdays 9:30 AM to 12:30 PM and by appointment

2. COURSE INFORMATION

Credit Hours: 3
Meeting Times and Location: T, Th 10:30 AM to 11:45 AM; Room RL 0010
Pre-requisites and/or Co-requisite: Undergraduate-level ECON 208. Minimum grade of
D and undergraduate-level ECON 209. Minimum grade of D and undergraduate-level
FIN 305
Note: It is the responsibility of students to ensure that all course pre-
requisites have been met prior to enrolling in this course. Students are
subject to administrative removal from the course if it is determined, at
any time, that course pre-requisites have not been met.

3. COURSE DESCRIPTION

This course is designed to provide an understanding of international flows of funds,

international financial markets, exchange rates, currency derivatives, and international
risk management. This course seeks to build knowledge and skills in the arena of
international finance through applications of quantitative tools and theoretical
frameworks on the topics covered.

4. COURSE LEARNING OUTCOMES

Upon completion of this course, the student should be able to articulate, explain, and
identify:
a) The goals of multinational corporations (MNCs)
b) The key components of the balance of payments and how the international flows
of funds are influenced by economic and other factors.
c) The background and corporate use of international financial markets: foreign
exchange markets, international credit markets, international bond markets, and
international stock markets.
d) Exchange rate determination.
e) The use of currency derivatives as a hedging tool.
f) The exchange rate systems and the government influence on exchange rates
g) The conditions that result in various forms of international arbitrage.
h) The concept of interest rate parity.
i) The relationships among inflation, interest rates, and exchange rates.
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j) Corporate management of translation, transaction, and economic exposures

5. COLLEGE OF BUSINESS PROGRAM LEARNING OUTCOMES

In addition to introducing the concepts and principles of international finance and

economics, this course will help students to develop analytical problem solving skills.

6. REQUIRED TEXT

The required text is International Financial Management by Jeff Madura, 12e. ISBN #
978-1-133-94783-7.

Students are expected to have acquired the textbook the date of the first class.

7. GRADING, ASSIGNMENT AND EXAM POLICIES

METHOD OF EVALUATION

Instructor evaluation of class participation 100 points 10%

Major Project (team) 100 points 10%
Other class assignments (individual and team); quizzes 200 points 20%
Exam I 200 points 20%
Exam II 200 points 20%
Final Exam 200 points 20%
1000 points 100%

GRADING SCALE

Final letter grades for the course will be assigned using the following scale:

A 900-1000 points
B+ 850-899 points
B 800-849 points
C+ 750-799 points
C 700-749 points
D+ 650-699 points
D 600-649 points
F less than 600 points

CLASS PARTICIPATION

Each and every student will be graded on the quantity and quality of their contribution to
class discussions (covering readings, articles, cases, etc.). All students are expected to
actively participate in class discussions and to make meaningful comments. You should
plan to be present and prepared to contribute at all times. Merely coming to class is not
sufficient. Participation is not the same as attendance. The quality and quantity of your
class participation will be subjectively evaluated by the instructor. Only quality

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comments will receive credit, merely talking without making a contribution does not
count for credit. Please do not ignore these points.

Regular attendance is expected, as the required readings and class meetings are
intended to be complements and not substitutes for one another. Students are
responsible for all materials covered in class, whether in the text, in class discussions,
magazine articles, videos, or lectures. Students are expected to keep up with the
required readings and come to class prepared to discuss the assigned material.
Students have the responsibility for active, rather than passive, involvement in the
learning process.

CLASS ACTIVITIES AND ASSIGNMENTS

There will be a variety of different activities and assignments throughout the semester.
Some activities may be done in class and some of the assignments may be done
outside of class. The class will be informed of the activities at least 46 hours before it is
due if the assignment is to be done outside of class. This means that the assignments
will be announced in class, so if you miss class you should contact one of your fellow
students to find out if an assignment was given and when it is due. No excuses will be
accepted for late assignments and all late assignments will receive a grade of zero.
Assignments are due at the beginning of class. Once the assignments have been
collected you will not be allowed to turn in the assignment and will receive a zero for
that assignment. Other assignments may be done in class and no prior announcement
will be made.

EXAMS

In the event that you miss an exam, regardless of the reason, the grade you receive on
the final exam will be substituted for the missed exam. No more than one exam can be
missed under any circumstances. Any other exam that is missed will receive a grade of
zero. There will be NO make-up exams. Exams may include multiple choice, short
answer, case analysis, and/or essay questions. All exams will be in-class, closed book
exams. You will be permitted one page front and back of notes and a calculator for
exams. The final exam is cumulative.

EXTRA CREDIT

WHILE EXTRA CREDIT WORK MAY BE GIVEN AT THE INSTRUCTORS

DISCRETION, PLEASE MAKE SURE THAT YOU PUT ALL OF YOUR EFFORT INTO
DOING WELL ON THE REQUIRED ASSIGNMENTS/EXAMS FOR THE CLASS.
EXTRA CREDIT MAY OR MAY NOT BE AVAILABLE.

8. COURSE POLICIES

CLASSROOM COURTESY

Everyone is expected to be on time for class. Coming in late for class disrupts the flow
of the class. As a common courtesy to everyone in the class all cell phones, pagers, lap
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top computers, and other electronic devices must be turned off during class time. Also,
no eating is allowed during class time. It is expected that everyone will be respectful of
their fellow classmates. Interrupting speakers (whether the instructor or fellow
students), carrying on personal conversations, reading newspapers or other reading
materials not related to this course will not be tolerated. Such behavior shows a lack of
respect for others and disrupts the class and impedes the learning process.

COMMUNICATION WITH INSTRUCTOR

Any electronic communication with me should be via your USI email account and sent
to my USI email address. This is the only way we can verify the identity of students
sending and receiving messages.

COURSE EVALUATIONS

We value your opinion and strongly urge you to complete the Course Evaluation for this
course. This semester the Evaluation Start Date is April 12, 2017 and the Evaluation
End Date is April 27, 2017.

ACADEMIC HONESTY

Students are expected to maintain complete honesty and integrity in the academic
experiences both in and out of the classroom. Any student found guilty of dishonesty
including, but not limited to, plagiarism and/or cheating on an examination will be
subject to disciplinary action. Students are encouraged to review USI's academic
conduct policy at http://www.usi.edu/deanofstudents/code

CALCULATOR

A business financial calculator (such as Model BAII PLUS from Texas Instruments) is
required. No sharing of calculators is permitted during examinations.

TEAMS

Certain assignments will be carried out on a team basis, including a Major Project in
which a public firm will be analyzed from the point of view of the major elements of this
course (rubric for this assignment is attached). Teams may also be requested to lead
class discussions and make presentations. Students will form teams of 4-6 individuals
(ideally 5, but total enrollment will be a determining factor in team size) prior to January
24, 2017. The instructor reserves the right to assign individuals to teams who are not
already part of a team as of this date.

9. UNIVERSITY STATEMENTS

DISABILITIES

If you have a disability for which you may require academic accommodations for this
class, please register with Disability Resources (DR) as soon as possible. Students who
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have an accommodation letter from DR are encouraged to meet privately with course
faculty to discuss the provisions of those accommodations as early in the semester as
possible. To qualify for accommodation assistance, students must first register to use
the disability resources in DR, Science Center Rm. 2206, 812-464-1961,
www.usi.edu/disabilities. To help ensure that accommodations will be available when
needed, students are encouraged to meet with course faculty at least 7 days prior to the
actual need for the accommodation. However, if you will be in an internship, field,
clinical, student teaching, or other off-campus setting this semester please note that
approved academic accommodations may not apply. Please contact Disability
Resources as soon as possible to discuss accommodations needed for access while in
this setting.

USI TITLE IX POLICY

USI does not tolerate acts of sexual misconduct, including sexual harassment and all
forms of sexual violence. If you have experienced sexual misconduct, or know
someone who has, the University can help. It is important to know that federal
regulations and University policy require faculty to promptly report incidences of
potential sexual misconduct known to them to the Title IX Coordinator to ensure that
appropriate measures are taken and resources are made available. The University will
work with you to protect your privacy by sharing information with only those who need to
know to ensure we can respond and assist. If you are seeking help and would like to
speak to someone confidentially, you can make an appointment with a counselor in the
University Counseling Center. Find more information about sexual violence, including
campus and community resources at www.usi.edu/stopsexualassault.

10. SYLLABUS CHANGE POLICY

This syllabus is a guide to the course and may be subject to change with reasonable
advanced notice.

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Tentative Class Schedule

Jan. 10 Introduction, grading procedures, class introductions, etc.

12 Chapter 1 Multinational financial management
17 Chapter 2 International flow of funds
19 Chapter 2
24 Chapter 3 International financial Markets
26 Chapter 3
31 Chapter 4 Exchange rate determination
Feb 2 Chapter 4 ID Major Project Company
7 Chapter 5 Currency derivatives
9 Chapter 5
14 Review for Exam I
16 Exam I Covers Chapters 1-5
21 Chapter 6 Government influences on exchange rates
23 Chapter 6
28 Chapter 7 International arbitrage and interest rate parity
Mar 2 Chapter 7
7 Spring Break
9 Spring Break
14 Chapter 8 Relationships among inflation, interest rates
and exchange rates
16 Chapter 9 Forecasting exchange rates
21 Chapter 9
23 Review for Exam II
28 Assessment Day
30 Exam II Covers Chapters 6-9
Apr 4 Chapter 10 Measuring exposure to exchange rate fluctuations
6 Chapter 10
11 Chapter 11 Managing transaction exposure
13 Chapter 11
18 Chapter 12 Managing economic exposure and translation exposure
20 Chapter 12
25 Review for Final Exam Major Project Due
27 **10:30 AM - 12:30 PM, FINAL EXAM** Covers Chapters 1-13
Final Exam is non-cumulative.

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Exhibit Rubric for Major Project

Project Component Percent of Grade

1. Historical Background of Selected Company* 20
Major milestones
Current business(es)
Competition/market analysis
History of financial results
2. Corporate Finance Issues/Analysis 40
Ratio analysis
Debt
Equity
Assessment of the firms risk/Beta
What is their cost of capital? Defend
Optional: dividend policy, international
finance issues
3. Quality of the teams recommendation for how 20
the firm should change (or not change) their
approach to corporate finance
4. Organization, style, grammar, etc.** 20

*It is recommended that teams choose an industrial or service company and not a
bank or other financial service provider.
**NB Check Course Resources on Blackboard for additional guidelines on group
writing assignments.

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