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Course Description
This course will cover issues related to both international financial markets
and the financial operations of a firm within the international environment.
The first part of the course will examine issues related to the international
markets, including international commercial policy, international investment,
foreign exchange markets, the euromarkets, and currency derivative markets.
The second part of the course will consider financial issues associated with
the operation of a firm in the international environment. Specifically, this
part of the course will focus on the identification, measurement, and
management of the impact of exchange rates on the firm; issues related to the
taxation of international income; the implications of political risk on
project evaluation and financial structure, firms' cost of capital for
international projects; financing decisions in a global market; and methods
for evaluating the performance of foreign operations. While the course
discusses theoretical basis on the various issues, it relies on both empirical
evidence and discussion of firms' real world activities. The course style is
mostly lectures with some class discussions. It evaluates students through
several quantitative problem sets, case studies, and a midterm and end of
course exam.
Course Grading
To receive credit
for the course, each student will be responsible for writing a midterm exam and
a second exam. The midterm exam will be
SATURDAY MAY 31, 2008 from 9:00pm-12:00pm. The second exam will be
FRIDAY AUGUST 8, 2008 from 4:45pm – 6:45pm.
Students will also be responsible for handing in several problem sets and case
write-ups as part of a study group. The final grade will be determined by the
following weights:
| First Exam |
30% |
| Second Exam |
30% |
| Cases/Problem Sets |
30% |
| Group/Class Participation |
10% |
The participation portion
of the grade is based upon general class participation and group participation
as evaluated by your group members. To promote classroom participation,
discussion is evaluated only on involvement and quality rather than on the
particular position taken. Please note that 40% of the grade is determined by
group activities so keep this in mind when forming study groups.
Course Materials
A bulk pack will be provided for the
non-textbook readings of the course. Other handouts, such as problem sets,
cases, case setups, and class notes will be provided as necessary throughout the
course. Students will also receive a copy of the course slides at the beginning
of each session. Much of this material can also be downloaded from the course
website.
The textbook provided for this course is:
International Financial Management, 4nd Edition, by Eun and
Resnick, Irwin, 2007.
Chapters from this book are listed in the
syllabus as IFM and provide useful background and additional discussion of the
topics discussed in class. Due to time considerations, we will not cover all of
the topics in the text, although it is highly recommended that you read the
entire text. In addition it will be assumed that students are thoroughly
familiar with an introductory corporate finance textbook.
In addition to the text and the required
readings, avid students of international finance will wish to stay on top of
current issues by following additional sources on information. Recommended
sources include:
The Economist - good economic analysis
of occasional related issues.
Financial Times - good international company
and capital markets section.
Euromoney - great international finance
and banking coverage - a big read.
Corporate Finance - excellent corporate finance magazine - specialized for
practitioners
Global Finance - good overall magazine for practical international finance
issues.
Student subscription rates
are available for some of these publications. Click here
for more information.
Finally,
I often refer students to web sites for additional reading material as well as
current events news, and additional information on a topic, or information that
would be helpful for a problem set or case. Thus it will be assumed that people have both access and the knowledge
necessary to navigate around the worldwide.
Groups
Each member of the
class is encouraged become part of a study group consisting of three to five
students. This group will work together and prepare answers to the discussion
cases/problem sets (however, any student may elect to submit a minority opinion
on an issue, if desired). Once a group is formed it cannot be changed, so
please choose your groups carefully. Issues regarding free riding,
shirking, etc. in group work are often more severe in the last year of a
program, so be sure that you and your group internalizes such issues when
forming. At the end of the course, group members will be asked to confidentially
evaluate the participation of the other group members as an attempt to
externally control such behavior. This evaluation will impact on the student’s
class participation score.
Each
group should choose an unique group name to identify themselves over the
term. Please include this group name in the file name of the electronic
problem set and case submissions. I prefer that these submissions are done
in MSWord or MSExcel.
Exam Policy
The exam is closed book although I will provide an equation sheet as the
memorization of economic and financial formulas is not the goal of this course.
Students need only bring a calculator and writing utensils to exams.
Absences from exams must be arranged in advance and make-up exams must be taken
in advance of the actual exam unless there is a confirmed medical excuse.
For all exams students are expected to follow the Wharton honor code.
Cases/Problem Sets
Cases and problem sets are to be submitted via email by the time at date
indicated on the class outline. The problem sets are meant as exercises to
practice some of the material. Answers will be provided for the problem sets.
Some of the cases will be the topic of discussion for a part of the class
period, while others are meant purely as homework. Students should bring to
class a copy of the case material for class discussion when indicated.
As with the real world, all of the cases are written to focus on issues, not
answers, and as such are somewhat ambiguous. There are no "right answers" to
the cases, only good arguments and bad arguments for taking particular actions
or decisions, especially on the corporate cases. Unlike other finance courses,
there is sometimes a limited amount of quantitative information on which to make
a decision and thus it is often impossible to compute an exact answer as might
be done in other courses.
Contact
Professor
I
will attempt to make myself available during the Friday/Saturday periods in
which you are on campus in order to answer questions. I am usually available
after class periods or during the lunch breaks. On double class weekends I
will be available on Friday evenings for additional questions.
In addition, I am an avid user of e-mail.
My email address is bodnar@jhu.edu. If you wish to speak to me directly, my office number
is (202) 663 - 7731.
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