Course Outline - Lakehead University

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Eiteman, D.K., Stonehill, A.I. and Moffet, M.H. (2004), Multinational Business Finance: Tenth Edition, Pearson Addison Wesley, Toronto. Student Evaluation.
Business 4079 International Financial Management Lakehead University Instructor: Philippe Gr´egoire

Office: RB 1011

Phone: 343-8320

Classes: MW 10:00-11:30 am, AT 1007

Email: [email protected]

Office Hours: Tu 10:00 am-12:00 noon

Course website: http://flash.lakeheadu.ca/∼pgreg/4079.html

Prerequesite Business 2039 Course Description This course is designed to acquaint students with fundamental principles and issues in the field of international financial management. The topics covered in this course include foreign exchange markets, the operation of fixed and floating exchange rate systems, short and long-term investment and borrowing decisions, eurocurrency markets, foreign exchange risk management and capital budgeting for overseas investment. Suggested Textbook Eiteman, D.K., Stonehill, A.I. and Moffet, M.H. (2004), Multinational Business Finance: Tenth Edition, Pearson Addison Wesley, Toronto. Student Evaluation Assignments (5)

20%

Country Analysis (Report)

15%

Country Analysis (Presentation)

5%

Midterm Exam (Wed, Feb 9, 2005)

20%

Final Exam

40%

Assignments You will be given five assignments throughout the semester. These will be available to download from the course website on the following dates: Assignment 1:

Posted January 14, due January 28. 1

Assignment 2:

Posted January 28, due February 11.

Assignment 3:

Posted February 11, due February 25.

Assignment 4:

Posted February 25, due March 11.

Assignment 5:

Posted March 11, due March 25.

Assignments can be done in groups of at most four and can be submitted via e-mail. If you choose to email your assignment, please send one file only and take into account the fact that I will be printing the document (do not send Excel files, I won’t read them). Each assignment is worth 4% of your final mark, for a total of 20%. Country Analysis This work can be done in groups of (at most) four and different teams cannot choose the same country. This assignment will be a lot more interesting if you choose a developing country or a small, often overlooked, developed country (Iceland, for example). The written report is due Friday, April 8, 2005 and presentations will be made on April 6. Reports should be (approximately) 12-15 pages long (line spacing: 1.5; font size: 12 pt; font color: black; paper color: white), including graphics, tables and references. Please do not submit your report in an envelope, unless I can re-use it (i.e. there is nothing written on it). Report should be structured as described below. Brief History of the Country (1-2 pages): This section will outline the main events affecting the country and its economy. It should be written in a manner that prepares the reader to the other sections of the report. Economic Overview of the Country (6-8 pages): This section will discuss the comparative advantages of the country, its main exports and imports, its principal trading partners, the types of foreign investments that are currently being made in it, the actual regulations concerning multinational enterprises and the trend in these regulations, currency and political risks, etc. Investment Opportunities (4-5 pages): Which investments, direct or indirect, could be done in this country? Try to be as detailed as possible. Clearly specify which of the country’s advantages could be exploited through FDIs and/or find public companies that you believe are worth investing in. Midterm and Final Exams A midterm exam worth 20% of your final mark will be held during regular class hours 2

Wednesday, February 9, 2005. You can’t miss it. If you do and have a really good excuse, the weight of this exam will be shifted on the final exam. Note that no cheat sheet will be allowed in this exam. The final exam will be worth 40% of your final mark. This exam will take place during the exam period in April (the exact date will be announced later). No cheat sheet will be allowed in this exam either. Course Outline January 5: Financial Goals and the Foreign Exchange Market Eiteman, Stonehill and Moffet, Chapters 1 and 4 January 10 and 12: The International Monetary System Eiteman, Stonehill and Moffet, Chapter 2 January 12 and 17: The Balance of Payments Eiteman, Stonehill and Moffet, Chapter 3 January 17, 19 and 24: Foreign Currency Derivatives Eiteman, Stonehill and Moffet, Chapter 5 January 26, 31 and February 7: International Parity Conditions and Foreign Exchange Rate Determination Eiteman, Stonehill and Moffet, Chapters 6 and 7 Wednesday, February 9: Midterm exam covering chapters 1-7. February 21 to March 9: Foreign Exchange Exposure Eiteman, Stonehill and Moffet, Chapters 8, 9 and 10 March 14 and 16: Interest Rate and Currency Swaps Eiteman, Stonehill and Moffet, Chapter 14 March 21 and 23: Foreign Direct Investment Theory and Strategy Eiteman, Stonehill and Moffet, Chapter 15 March 30 and April 4: Global Cost and Availability of Capital and Multinational Capital Budgeting Eiteman, Stonehill and Moffet, Chapters 11 and 18 April 6: Presentations 3