J.

Mack Robinson College of Management

FI 8040: Survey of International finance
4.30 p.m. – 7.00 p.m. Tuesdays Alpharetta Center

Office: 35 Broad Street, Room 1223

Phone: 404-413-7334; E-mail: mshrikhande@gsu.edu

Fall 2007 Milind Shrikhande

Course Description

This course addresses the problems faced by an international

investment banker or a financial officer of a multinational firm. The
course emphasizes financial decisions not usually considered by
managers of purely domestic firms including exchange rate
fluctuations, differing tax structures across countries and political risk.
The course focuses on: identification, measurement and management
of exchange rate exposure and hedging strategies; taxation of
international income and transfer pricing policies; international capital
budgeting, determination of the cost of capital; global financing and
designing financial structure. Other topics covered include
international project evaluation, and use of special financing vehicles
like interest rate and currency swaps.

Prerequisites
Successful completion of the MBA 8130 & 8230 sequence. This 
requirement will be strictly enforced by the department. If you do 
not meet this requirement, you will be automatically withdrawn.

Familiarity with a spreadsheet program (VP Planner, Lotus123, Excel)

will be useful, as you will be required to do several cases.

This course syllabus provides a general plan for the course; deviations may be necessary.

Evaluation
The course material will be communicated via lectures and some
cases. The class will be organized into groups of 3 to 4 students to
discuss cases, submit project reports, and solve problems. There will
be three equally weighted exams.

Case discussion and reports 15%

Exams (equal weight) 60%
Term project 25%
Note:

All exams are closed book (and closed notes). You will, however, be
allowed a list of important results and formulae. The exams will be
based on the in-class lectures and readings assigned during the
course.

No make­up exams will be offered.   Students with a  documented  university

approved excuse will have the weight of the final increased accordingly. In all
other cases, a grade of zero will be recorded for that portion of the material. 

While I realize that many of you work, you have to plan ahead for the
semester today.  

Readings
The textbook for the course is Multinational Financial
Management by Alan Shapiro (published by Prentice-Hall) available for
sale at the GSU Bookstore. This will be supplemented by other readings
designed to emphasize certain issues and to present different points of
view. Regular reading of the business press (e.g. Business Week, Wall
Street Journal, The Economist, etc.) is strongly recommended.

Most materials used in class are available at the following websites as

downloadable files:
Course website - http://www.gsu.edu/~wwwmms/8040fall07
Publisher website - http://he-cda.wiley.com/wileyCDA

Office Hours
Regular office hours are on Tue 3:00 - 4:00 p.m. and by appointment.  I 
will be in my office in the Finance department most days of the week.  I 
strongly encourage you to come by and see me if you need to do so.  I have an 
open door policy, so you are always welcome.

Honor Code: Unless I specifically give you permission to work on something
together, you are expected to work on your own. All materials submitted for
grading must be pledged.   Homework is due when it is requested in class.
The  Department  of Finance  adheres   to the   University’s  policy  on academic
honesty as contained in the Academic Regulations section of the University
catalog.

Attendance Policy: More than three absences will result in automatic withdrawal from
the course. Late materials will not be accepted unless previous arrangements have been
made or the student has a university-approved excuse. I understand that we all face tight
time schedules. Please make every effort to be on time for every class.
 Georgia State University
J. Mack Robinson College of Management
Survey of International Finance
Fall 2007 FI 8040 Milind Shrikhande

Tentative Course Outline

Aug 21 Course Introduction

 Syllabus

I. Currency Markets

Exchange Rate Overview

 Exchange Rate Determination
 Exchange Rate Models
o Read: MFM, Ch. 2

AUG 28 Foreign Exchange Market

 Spot and Forward Markets
 Exchange Rates and Interest Rates
o Read: MFM, Ch. 7

Currency Futures and Options

 FX Derivative Market
 Hedging and Speculation
o Read: MFM, Ch. 8
Problem Set - I

SEP 04 Exchange Rate Impact on International Operations

 Why Should Firms Hedge?
o Read: Class Note

Quantitative Analysis Session

Problem-Solving / Case
Problem Set - I Solutions

SEP 11 Parity Conditions and MNC Competitiveness

o Read: MFM, Ch. 4
Case 1

SEP 18 Review

Exam 1
Session Discussion Topic

II. Managing Exposure to FX Risk

Measuring Economic Exposure

o Read: Ch. 11
Problem Set - II

SEP 25 Managing Economic Exposure

 Approaches for the MNC
o Read: Ch. 11

Transfer Pricing
o Read: Ch. 20
Case 1 Report

OCT 02 Transfer Pricing (continued)

OCT 09 Quantitative Analysis Session

 Problem-Solving / Case
Problem Set - II Solutions

Review

OCT 16 Exam 2

OCT 23 Taxation of Foreign Income

 Legal framework and MNC
Case 2

III. Long-term Investments

OCT 30 International Projects, Mergers and Acquisitions

Capital Budgeting
o Read: Ch. 17
Problem Set - III

Quantitative Analysis Session

 Problem-Solving / Case
Problem Set - III Solutions
Session Discussion Topic

IV. Long-Term Financing

NOV 06 Political Risk

 Measurement and Management
o Read: Ch. 6
Case 2 Report

Global Financing
 Financing foreign projects
o Read: Ch. 12
Case 3

NOV 13 International Markets

 Euromarket
o Read: Ch. 13

Special Financing Vehicles

 Interest Rate and Currency Swaps
 LDC Debt-Equity Swaps
Read: Ch. 9

Review

NOV 27 Exam 3

DEC 04 Term-project review

● Student meetings
Case 3 Report