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FINC 413 International Finance Course Guide

Course Description
 

By expanding the student’s understanding of the financial system to include an international perspective, this course introduces the student to the role of international considerations within the development of corporate policy. The course examines the determination of exchange rates and operation of exchange markets. The application of these ideas will be extended to the firm’s management of foreign exchange exposure, cash management, and capital budgeting. Multinational banking and political risk management will also be studied. Prerequisites: FINC—212 or FINC—215 and FINC—301. (ATTR: BUS, ISP) 3 credits


Course Position in Finance Curriculum

International Finance is an upper junior/senior level course that serves the Finance curriculum by extending the students perspectives on major finance issues into the realm of International Business. As such it is designed to build upon prior course work, linking prior knowledge to the study of international markets and institutions. As a senior level course, we expect students to enter with analytic and computational skill commensurate with that level of development.


Learning Objectives

At the conclusion of this course students will:

  1. Develop knowledge of and ability to use the precise language of International Finance.
  2. Develop knowledge of the institutions of international finance and use that knowledge to predict and assess the impacts and responses of governments, markets, and firms to various international situations.
  3. Demonstrate knowledge and ability to use various theories to forecast currency future values and assess the pressure currency values are under.
  4. Demonstrate their ability to analyze and evaluate both international financial borrowing and investment opportunities.
  5. Extend their ability to do the mathematics of finance into the realm of international finance including the ability to evaluate hedging opportunities, make and receive international payments, evaluate transactions in both dollar and foreign currency terms.
  6. Refine each student's general knowledge of business and extend their ability to confront new situations and propose solutions which can withstand critical examination into the area of international finance.


 

Course Assessable Activities and Department Learning Objectives

 

Dept. Learning Objectives

How Finc-413 assessments will contribute to evaluation of Junior/senior level performance

Students will:

Course learning objective

1.     Problem Solving

Identify financial problems, analyze their impact, and design solutions that will withstand critical examination within the areas of Investments, International Finance, and Corporate Finance.

Identify qualitatively and quantitatively the market forces, and institutional constraints on those forces causing exchange rate fluctuations and various other risks that alter the value and size of cash flows and optimal responses to these situations.

1,2,3,4,5,6

2.     Communication:

Communicate clearly and effectively in written and oral form.

Use international financial data and information to make and present forecasts as well as evaluate various situations.

Significant assignment which will be graded for writing and finance content.

1,6

  1. Moral Consideration:

Recognize ethical issues and evaluate the ethical implications of their recommendations

Learn about the role and impact of various international organizations and institutions.

2,6


 

 Course Outline

  • International flow of funds (balance of payments)
  • International financial markets and institutions
  • Exchange rate determination
  • Forward and options in foreign exchange
  • Exchange rate behavior (theories & market forces)
  • Arbitrage Situations & exchange rate forecasting
  • Exchange rate risk management
  • Multinational capital budgeting
  • Multinational financial Investment
  • Risk analysis
  • Short and long term financing
  • International cash management and working capital


Required Assessment

As an upper level finance course, this course will contain a significant number of cases or projects to ensure students both understand the material and are able to apply that understanding to actual problem solving. Through course assignments, students will develop their ability to confront new situations and design appropriate responses. They will also refine their ability to support their conclusions as well as present them clearly and systematically. In any semester it is expected that the professors teaching this course will assess at least 75 percent of the learning objectives.


Recommended Assessment Measure

The following assessment measures might be used:

The use of some essay, problems, or short answer questions on the midterm and final to assess selected learning objectives

Case problems that require students to utilize their quantitative and evaluative skills to design and defend appropriate solutions.

Numerical exercises to ascertain mastery of the computational aspects of exchange rate behavior, forecasting and exposure as well as general financial forces.


Statement of Expectations

Students are expected to take an active role in their learning experience and will be expected to read the assigned material and complete written assignments prior to class.

Since this is an upper level finance course, students are expected to actively participate in class using the language of finance and business as they express their questions and ideas.

Since this course will focus on analysis, and evaluation, students may need to allocate sufficient out-of-class time to review the material of prior courses, so that they can perform at the required level.


Course Prerequisite

The course prerequisites are Managerial Finance I, Financial Markets and Institutions. However, as a senior level course, we expect students to enter with analytic and computational skill commensurate with that level of development.


Institutional Mechanism for Providing Feedback for Continuous Quality Improvement

The Department of Finance will annually review the results of assessment from this course and assess their implications for the program students are enrolled in. We will respond in the following manner: seek additional information, and/or alter the course to improve outcomes, and/or discuss deficiencies with other departments providing components of the program that might more directly confront the outcomes observed.