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FIN 573

International Finance
Spring 2018

Abu S Amin, Ph. D


Office: 329 Sloan Hall;
Email: amin1a@cmich.edu
Phone: 989-774-7621.

Student Hours:
Tuesdays and Thursdays: 2:00 pm to 3:00 pm
Wednesdays: 11 am to 1 pm

Welcome to International Finance Class @CMU


Welcome FIN 573 Hybrid Class! Have you wondered how do big corporation manages their business all over the world?
What are the currencies they deal with? What are the important factors that drive exchange rates? How do they manage
extreme volatility in exchange rates? How do they forecast exchange rates? How do they decide to invest in a foreign country?
You will be thrilled to learn so many new things in this class. To make it more fun and exciting, you will take part in real-life cases.
To master the content, you will review the notes, do practice exercises in class, take quizzes, write a midterm exam and a final
exam.

International Financial Management,


Eun and Resnick [ER] 8th Edition.
Prerequisites
McGraw-Hill Education.
Complete FIN 302/ FIN 332.
ISBN: 978-1-259-71778-9
Admissions to Professional Business
Studies or listed on a signed major or
minor; 56 hours completed.

Course Description
The course is designed to help the student understand issues and challenges firms with global presence faces in doing
business. The first part of the course focuses on background materials such as major characteristics, institutions, and players of
exchange rate market, theories of exchange rate determination and forecasting exchange rate. The second part focuses on
corporate finance for international finance, included are topics such as corporate financial and investment policies, risk
management, and portfolio management. Students are expected to sharpen their analytical, problem solving and writing skills
after successful completion of the course.

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Course Learning Objectives
After completing the course students are expected to:

o Gain familiarity with fundamental foreign exchange markets.

o Understand determination and forecasting of the exchange rate.

o Understand the risk of doing business internationally and apply the risk management tools available for foreign
exchange exposure.

o Identify the challenges and opportunities in financing internationally.

o Be able to understand different methods of investing internationally.

Course Requirements

1. Class participation

Please take a moment to note that this is a HYBRID CLASS. To facilitate learning I have created video
lectures for each of the units and it is posted on Blackboard. It is imperative that you go through these video
lectures to understand the topics and concepts. During the weekly meeting time we will review main learning
objectives from video lectures, discuss/solve problems, analyze cases to reinforce our learning. In addition to all
these activities, we will write exams during our meeting time.

As we sit in a classroom, it is our responsibility to ensure that we experience a conducive learning


environment where everyone can share their thoughts. Sharing your ideas and thoughts will not only benefit
you but also help all of us learn something new every time we meet. To be able to meaningfully contribute in
class, you must prepare yourself. Please feel free to ask me questions. Your questions are always welcome,
including questions about current events which are relevant to the course but not necessarily related to the
topic of a particular class. If I have a meaningful comment to offer on the spot, I will offer it; if not, I will look
into the issue and get back to it in the next meeting.

Part of your class participation grade will be based on completing an anonymous mid-semester survey.
This survey allows me to understand the progression of the class concerning our learning objectives. The
deadline to complete the survey will be announced at a later time.

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2. Online Quizzes [Individual Effort]

We will have four online quizzes. These are short quizzes covering the materials from the last 1 or 2
weeks. Studying for them will give you a chance to review the most recent material, and you will be able to check
your progress throughout the semester. All quiz dates are mentioned on the course calendar. You will be given
only chance to answer the quiz and you can take the quiz anytime during the week. We will discuss the quiz at
the beginning of next week’s class.

3. Homework/Assignments

There will be three comprehensive problem sets to be completed during the semester. You need to
complete the problem sets individually. They are designed to prepare you for the exams. Also, there will be five
end-of-the-chapter (EOC) practice problems. These EOCs need to be completed by groups.

I will randomly assign you to a group at the beginning of the semester. You will need to communicate
with your team member to coordinate the group activities. Also, while sending your group deliverables, please
keep in mind you need to make only one submission, and each submission must mention group number and the
name of the group members on your work. Please check the course calendar for the deadline of EOC exercises
and problem sets.

4. Case Analysis [Team Effort]

I will assign real life cases to groups for comprehensive analysis. The case analysis is to be completed in
group. Please check the course calendar for the deadline of each submission. Once the case is submitted, I may
ask you to present your analysis during the class or my office hours depending availability of time. Also note that
the overall case grading depends on the quality of the analysis, however the individual grading depends on the
self-rating and rating by other group members. It is very likely not all team members may not get same grade as
it depends on the individual contribution of group members.

5. Exams [Individual Effort]

You have to write three exams during the semester. All the exams are closed book and closed notes, no cheat
sheet allowed. The final exam will be comprehensive of material covered over the entire semester. The final
exam will be held as per schedule posted by the register’s office (for exam one and midterm exam please check
the course calendar). Everyone is expected to take the exam as scheduled except in true emergencies. Please
don’t forget to bring your calculator or laptop for the exams.

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Course Assessment
I will evaluate your performance in the course through class participation, quizzes, assignments, a group
project and presentation, midterm and a final exam. This course will have a total of 1000 possible points. The
breakdown of these points is as follows:

Course Feedback
Mid-Semester Survey 10

Online Quizzes
4 quizzes (4 x 10) 40

Assignments
End of Chapter (EOC) Exercises (5 x 10) 50
Problem Set 1 50
Problem Set 2 50
Problem Set 3 50
Real-life cases and presentation
HBS Cases Analysis (4 x 37.5) 150

Exam One 200

Exam Two 200

Final Exam 200

Course Evaluation

1. Course Grade Distribution

Letter Grades will be assign on the following basis

Grade Points Point Range


A 4.0 95 and above
A- 3.7 90- 94.99
B+ 3.3 87-89.99
B 3.0 83-86.99
B- 2.7 80-82.99
C+ 2.3 77-79.99
C 2.0 73-76.99
C- 1.7 70-72.99
D+ 1.3 66-69.99
D 1.0 60-65.99
E 0.0 59.99 and below

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Course Policies

1. Attendance is required for this class. If you are unable to attend any class please notify me in advance. Please
also note that your presence and participation in class will positively affect your grade on “class participation”.

2. You should not hesitate to stop by my student hours to discuss class materials, quizzes, homework
assignments or final project. You do not need an appointment during the regular office hours. If you cannot
come to office hours due to a timing conflict, please email me in advance to schedule an appointment outside
of the office hours.

3. The syllabus and course outline is subject to change by the instructor during the semester.1 Changes might
occur because of students’ specific needs, general class progression, and emerging topics of interest. Any
change will be notified in- class and also through Blackboard.

4. All the course related communication will be administrated through Blackboard. You should check the course
site on Blackboard for lecture notes, assignments, exams, and announcements.

5. If you disagree with my grading, you can appeal for regrading final project and/or final exam within one week
after the final exam. You must turn in the original project (no changes are acceptable) and/ final exam with
a written documentation explaining the dispute. I reserve the right to re-grade the entire exam and/or the
final project; it is possible that your grade can go up or down while regrading. In the case of group project,
the entire group must sign a written petition to re-grade.

6. There is no extra work is available in this class.

7. At Central Michigan University we take academic integrity and honesty seriously. The following link delineates
detailed expectations from students to ensure academic integrity:

https://www.cmich.edu/office_provost/InternationalAffairs/Student%20Services/campus_services/Pages/A
cademic-Integrity.aspx .

I expect that all the students in this class should adhere the policies stated in the document. In accordance
with University policy, anyone found cheating on an exam or found guilty of plagiarism will fail the course.

8. CMU provides individuals with disabilities reasonable accommodations to participate in educational


programs, activities, and services. Students with disabilities requiring accommodations to participate in class
activities or meet course requirements should contact Susie Rood, Director of Student Disability Services at

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This syllabus and any addendums shall not be construed by the students as a contract, implied or expressed, between the
student and/or the professor and the University.
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(800) 950-1144, extension 3018 or email her at sds@cmich.edu. For more information, please contact
Student Disability Services (Park Library 120, telephone 989-774-3018).

9. Late submission will be penalized as follows:

1-day late: -20% of the grade


2-day late: -50% of the grade
3-day late: -100% of the grade

Please notify me well in advance if there are any extremely extenuation circumstances.

10. A make-up exam will only be offered to students with an excused absence. You need to produce proper
documentation showing the legitimacy of the excuse. The following events may qualify for excused absences:
1) Final exam conflict (CMU final exam policy) or 4 final exams in one day; 2) Death of an immediate family
member immediately prior to final exam; 3) Interview or company visit outside of the campus on the day of
final exam; 4) CMU sponsored events if coincided with the day of final exam.

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Detailed Course Outline (Tentative, Subject to Change)

Week Begin and End Topics Face to face Online


Dates
Week 1 Jan 8 – Jan 14 Introduction and Overview of Hybrid Class 1. Video Lecture on CH 5
Week 2 Jan 15 – Jan 21 Market for Foreign Exchange In-class Exercise # 1
[ER Chapter 5]
Week 3 Jan 22 – Jan 28 Market for Foreign Exchange In-class Exercise # 1 1. End of Chapter Exercise # 1 [Jan 29, EOD]
2. Quiz 1 [CH 5] [Jan 29, EOD]
[ER Chapter 5]
3. Video Lecture on CH 6
Week 4 Jan 29 – Feb 4 International Parity Relationships In-class Exercise # 2
[ER Chapter 6]
Week 5 Feb 5 – Feb 11 International Parity Relationships In-class Exercise # 2 1. End of Chapter Exercise # 2 [Feb 12, EOD]
2. Quiz 2 [CH 6] [Feb 12, EOD]
[ER Chapter 6]
3. Problem Set One [Feb 13, EOD]
Week 6 Feb 12 – Feb 18 Exam One [Feb 15, 2018] 1. Video Lecture on CH 7
2. HBS Mini Case 1 [ Feb 19, EOD]
[ER CH 5 and CH 6]
[Groupe Ariel S. A.]
Week 7 Feb 19– Feb 25 Futures and Option on Foreign Exchange In-class Exercise # 3 1. Video Lecture on CH 8

[ER Chapter 7]
Week 8 Feb 26 – Mar 4 Management of Transaction Exposure In-class Exercise # 4 1. End of Chapter Exercise # 3 [Mar 5, EOD]
2. Quiz 3 [CH 7,8] [Mar 5, EOD]
[ER Chapter 8]
3. HBS Mini Case 2 [Mar 6, EOD]
[Hedging at Porsche]
Week 9 Mar 5 – Mar 11 Spring Break – No Class

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Week 10 Mar 12 – Mar 18 International Bond and Equity Market In-class Exercise # 5 1. Video Lecture on CH 12, 13,17
[ER Chapter 12 and 13] 2. Mid Semester Evaluation [Mar 15, EOD]
Week 11 Mar 19 – Mar 25 Cost of Capital for MNCs In-class Exercise # 5 1. End of Chapter Exercise # 4 [Mar 26, EOD]
[ER Chapter 17] 2. Quiz # 4 [CH 12, 13, 17] [Mar 26, EOD]
3. Problem Set Two [Mar 27, EOD]
Week 12 Mar 26 – Apr 1 Exam Two [Mar 29, 2018] 1. HBS Mini Case 3 [Apr 2, EOD]
[ER CH 7,8,12,13,17] [Nextel Peru]
Week 13 Apr 2 – Apr 8 No Class
Week 14 Apr 9 – Apr 15 International Capital Budgeting In-class Exercise # 6
Week 15 Apr 16 – Apr 22 International Capital Budgeting In-class Exercise # 6 1. End of Chapter Exercise # 5 [April 23, EOD]
Week 16 Apr 23 – Apr 29 International Capital Budgeting In-class Exercise # 6 1. Problem Set Three [Apr 24, EOD]
2. HBS Mini Case 4 [Apr 29, EOD]
[3P Turbo]

Comprehensive Final Exam [May 3, 2018]

Case Coursepack:
http://cb.hbsp.harvard.edu/cbmp/access/72900542