Department of Finance Carl H.

Lindner College of Business University of Cincinnati

14SS-FIN 4007-001 International Finance Spring 2014: Jan.6 Apr.26

MWF 8:00-8:50 a.m. at Lindner 109 Professor: Yong H. Kim Office: 410 Linder Hall Phone: 556-7084 E-Mail: yong.kim@uc.edu (office) Office Hours: MWF 9:10-9:40 a.m. and by appointment. Temporary changes in office hours, if any, will be announced in advance via Blackboard and/or in class.

Required Materials
International Financial Management, Jeff Madura, 11th Edition, South-Western CENGAGE Learning, 2012. Earlier editions, e.g., 10th, are also acceptable at your own risk. Go to amazon.com or www.cengagebrain.com and search by textbook. You can order either a hard back text, RENTAL hard back text, eBook, or eChapters at a discount price. Some readings may be assigned to supplement your in-depth study of major topics in international financial management.

Suggested Activities
Read The Wall Street Journal, Business Week, Financial Times, Forbes, Fortune, The Economist, etc. Student subscription rates are available for these periodicals. Also, watch CET, CNN, CNBC, C-Span, etc. These activities are practically free.

Objective of the Course

The course will be discussed from the perspective of international financial management which is all about making financial decisions in the context of international environment. There are two important aspects to really good international financial decision-making. The first is experience; this you will have to get (or are getting) on your own. Suggested activities in the previous section will be a must. The second is an appreciation for the importance of formulating the questions (and uncovering the "answers") that are germane to making international financial decisions. In this course we will focus on developing some of the tools that are necessary for you to be able to frame and solve the basic problems in making international financial decisions. We will confine our study to the topics of international financial environment, exchange rate behavior and its management, and investment /financing decisions of MNCs. By the end of the course you should be reasonably comfortable (familiar) with the assumptions and techniques required for making financial decisions by the MNCs.

Format
A combination of lecture, discussion, and problem-solving format will be used in the course. However, the proposed format works best only when there is significant input from students. Therefore, participation is not only expected but also mandatory and will be rewarded. We will examine a host of financial and non-financial problems. Practice problems and questions from book chapters as well as cases/articles will also be assigned. I prefer to take an intuitive/conceptual approach to international financial management. Although we will do necessary math in this course, it is most important to grasp the conceptual side of international accounting and financial management. After all, tools are only useful in solving the problems that we are capable of formulating. At times, our discussion of international financial management will take us well beyond the contents of the textbook, and we will also attempt to examine many puzzles and problems outside the world of international finance.

Requirements
You will be evaluated on multiple (probably five) case/problem/article assignments and three exams. Make-ups for missed assignments are given only in extreme circumstances and only if arrangements are made, sufficiently in advance, prior to the scheduled due date. No make-up exams are given. A score of zero is assigned for a missed exam or a missed assignment. An excused absence from an exam - which must be determined before the exam - may allow the student to place the 80 percent partial weight from the missed exam on the final. You cannot miss the final exam and pass the course. The assignments and exams may contain a variety of problem types - from "multiple choice" to possibly essay and problem solving. Assignment due dates will be announced as the course progresses. ATTENTION - Given that ALL exams will be based on your handwritten answers, ANY electronic devices including laptops, iPads, Smart Phones, etc. should be completely turned off during the in-class sessions. That is, NO student is expected to read the monitor or listen to the smart/cell phone. Instead, make sure to have a hard copy of lecture ppt. slides to be posted in Blackboard to make your handwritten notes as needed. Eating food, if necessary, is expected to be done only during the breaks.

Grading
Assignments are worth 10 points each and must be typewritten. You must belong to a TEAM of five members and are encouraged to study together for the assignments and exams. Each assignment report needs to end with a paragraph of description on how the assignment was executed to become the teams report rather than a simple collection of individual members work on sub questions/problems. That is, you are fully responsible for your teams report. NEVER copy/accept other student's/sources answers in the report. Academic integrity is strictly adhered in this class and any indication of compromising behavior will result in a course grade of F. Each exam is worth 100 points. Grade A Points 90 A87 B+ 84 B 80 B77 C+ 74 C 70 C67 D+ 64 D 60 D57 > F

To arrive at your course grade first two exam grades will be weighted 20 percent each, and the total assignment points (50 points possible) will be also weighted 20 percent. The remaining 40 percent belongs to the final exam. In addition, you may earn up to three additional points (to be added to the total out of 100) through enthusiastic participation. These "bonus" points will be at the strict discretion of the instructor. Your course grade will be updated throughout the quarter.

Questions that you may have concerning grading will be cheerfully addressed by me.

Course Outline (Tentative)

You are responsible for all of the material in the chapters listed below. (Note that we will not cover it all in class, however). I. The International Financial Environment Chapters 1, 2, 3, 4, 5 1. 2. 3. 4. 5. First Exam Feb. 07, 2014 Multinational Financial Management: An Overview International Flow of Funds International Financial Markets Exchange Rate Determination Currency Derivatives

II. Exchange Rate: Behavior and Risk Management Chapters 6, 7, 8, 10, 11, 12 1. 2. 3. 4. 5. Government Influence International Arbitrage and Interest Rate Parity Inflation, Interest Rates, and Exchange Rates Measuring Exposure Managing Exposure

Second Exam Mar. 07, 2014 III. Asset and Liability Management of MNCs Chapters 13, 14, 15, 16, 17 1. Direct Foreign Investment 2. Multinational Capital Budgeting 3. Multinational Restructuring 4. Country Risk Analysis 5. Cost of Capital and Capital Structure

Final Exam

Apr. 23, 2013 (7:30-9:30 a.m.)