NYU Stern School of Business

Undergraduate College

FINC-UB.0030.002 (C15.0030): INT'L FINANCIAL MGMT

Fall 2012

Instructor Details

Whitelaw, Robert

rwhitela@stern.nyu.edu

TBA

KMC 9-69

 

Course Meetings

TR, 2:00pm to 3:15pm

KMC 4-60


Final Exam:

Schedule exceptions
    Class will not meet on:
    Class will meet on:

 

Course Description and Learning Goals

Globalization and integration of financial markets present unique opportunities and unique risks for all kinds of firms and investors. This course is designed to provide you with a strong conceptual background to allow better decisions relating to international operations and international investing. The course begins with a discussion of the world economic environment including trade, capital flows, and conditions that promote economic growth. The first part of the course is focused on currencies, including an in-depth analysis of exchange rates, international monetary systems, contemporary currency regimes, and current financial crises. The course then covers a firm's exposure to various kinds of exchange rate risks and the methods and financial instruments used to manage those risks, and investment in foreign financial assets.

 

Course Pre-Requisites

Corporate Finance FINC-UB.0007 and Economics of Global Business ECON-UB.0002 are pre-requisites for this course. Students are expected to understand basic concepts such as cost of capital, capital budgeting, capital structure theory, portfolio theory, and basic derivative pricing (options and futures).

 

Course Outline

Preliminar, subject to change.

Session

Date

Topics

Assignments

1

Tues., Sept. 4

Introduction

BH: 1.2-1.3, 1.5

2

Thurs., Sept. 6

The Foreign Exchange Market

BH: 2.1-2.3, 2.5

3

Tues., Sept. 11

Exchange Rate Systems I

BH: 4.1-4.4, 5.1-5.3

4

Thurs., Sept. 13

Exchange Rate Systems II

 

5

Tues., Sept. 18

Exchange Rate Systems III

 

6

Thurs., Sept. 20

Forward Markets

 

7

Tues., Sept. 25

Interest Rate Parity I

 

8

Thurs., Sept. 27

Interest Rate Parity II

 

9

Tues., Oct. 2

 

 

10

Thurs., Oct. 4

Foreign Currency Speculation I

 

11

Tues., Oct. 9

Foreign Currency Speculation II

 

12

Thurs., Oct. 11

Quiz #1

 

 

Tues., Oct. 16

NO CLASS

 

13

Thurs., Oct. 18

Purchasing Power Parity I

 

14

Tues., Oct. 23

Purchasing Power Parity II

 

 

 

 

Session

Date

Topics

Assignments

15

Thurs., Oct. 25

Exchange Rate Determination

 

16

Tues., Oct. 30

Managing Real Exchange Risk I

 

17

Thurs., Nov. 1

Managing Real Exchange Risk II

 

18

Tues., Nov. 6

International Financing I

 

19

Thurs., Nov. 8

International Financing II

 

20

Tues., Nov. 13

International Investments I

 

21

Thurs., Nov. 15

Quiz #2

 

22

Tues., Nov. 20

International Investments II

 

 

Thurs., Nov. 22

NO CLASS (Thanksgiving)

 

23

Tues., Nov. 27

International Capital Budgeting

 

24

Thurs., Dec. 29

Currency Futures and Options

 

25

Tues., Dec. 4

Currency Risk Management I

 

26

Thurs., Dec. 6

Currency Risk Management II

 

27

Tues., Dec. 11

Interest Rate and Currency Swaps I

 

28

Thurs., Dec. 13

Interest Rate and Currency Swaps II

Study!

 

Required Course Materials

Preliminary, subject to change.

The textbook for the course is

 

Geert Bekaert and Robert Hodrick, International Financial Management, Pearson Prentice Hall, 2nd Edition, 2012.

 

There will also be lecture notes, handouts (e.g., journal and news articles), and supplementary materials (e.g., sample Excel spreadsheets) for many classes. Lecture notes and handouts will be distributed at the beginning of class, and they will also be available on Blackboard before the relevant class session. Extra copies of these materials will not be available in my office. If you miss or lose the handouts, you should print them out from Blackboard. The supplementary materials will also be available on Blackboard, as will links to other relevant information.

 

Finally, you need a calculator for this class. It is a distinct advantage to have a financial calculator, but not an absolute requirement.

 

Assessment Components

Preliminary, subject to change.

The final grade will be calculated as follows:

 

                                    Class participation                                 5%

                                    Problem sets                                        10%

                                    Cases                                                   10%

                                    Quizzes                                                            40%

                                    Final exam                                           35%

 

Grading

At NYU Stern we seek to teach challenging courses that allow students to demonstrate differential mastery of the subject matter. Assigning grades that reward excellence and reflect differences in performance is important to ensuring the integrity of our curriculum. As such, following departmental guidelines, grades for this course will follow approximately the following distribution:

 

                                                A’s (A/A-)                               25-35%

                                                B’s (B+/B/B-)                           50-70%

                                                C’s and below                          5-15%

 

Note that while we use these ranges as a guide, the actual distribution for this course will depend upon how well the class actually performs in the course.

 

Re-Grading

The process of assigning grades is intended to be one of unbiased evaluation. Students are encouraged to respect the integrity and authority of the professor’s grading system and are discouraged from pursuing arbitrary challenges to it.

If you believe an inadvertent error has been made in the grading of an individual assignment or in assessing an overall course grade, a request to have the grade re-evaluated may be submitted. You must submit such requests in writing to me within 7 days of receiving the grade, including a brief written statement of why you believe that an error in grading has been made.

 

Professional Responsibilities For This Course

Attendance

Class attendance is an important part of the learning experience. I do not take formal attendance; however, keep in mind that class participation does account for 5% of the final grade. If you are not in class, you cannot participate in the discussion. If you will miss class, please inform me beforehand via email. (One fifth of the class participation grade, 1% of the total grade, will be given for filling out an online customized course survey at the end of the semester.) For those of you who may miss class, I will attempt to tape every class session. The URL for the streaming video will be posted on Blackboard as soon as it becomes available. However, keep in mind that viewing the video is not a good substitute for attending class.

Participation

Participation is an essential part of learning in this course.  Students are expected to participate in all facets of classroom learning. In particular, you are expected to contribute, in a constructive manner, to classroom discussions. These contributions will make up the remaining four fifths of the class participation grade. The assigned reading should be done before the corresponding class session, and you are also expected to keep up with current business news by reading a publication such as the Wall Street Journal, the Financial Times, and/or the Economist. I will attempt to alert you to particularly interesting news items via an announcement on Blackboard. Thus, you should make an effort to check the course page regularly.

Assignments

The problem sets should be handed in before the end of the class session in which they are due. (Due dates can be found on the final page of the syllabus.) They can be given to me in class or emailed. Regardless of the method of delivery, the same deadline applies. The deadline refers to the time at which I receive the assignment, not the time at which you send it. Assignments that are late but within 24 hours of the deadline, will receive ½ credit. After 24 hours, no assignments will be accepted (unless due to documented serious illness or family emergency); it is unfair to the other students in the class.

Classroom Norms

I will make every effort to start and end class on time. If you arrive late, please enter quietly without disturbing the rest of the class. While in class, please be courteous to your fellow classmates and me. During lectures and discussions only one person should speak at a time. I encourage you to ask questions of your fellow students and me. I consider a good question as valuable as a good answer. In lectures, it is difficult to ask good questions unless you already have some familiarity with the material. Therefore, you should do the required reading before the relevant class session. Laptops, cell phones, Smartphones and other electronic devices are a disturbance to both students and professors.  All electronic devices must be turned off prior to the start of each class meeting.

 

Stern Policies

General Behavior
The School expects that students will conduct themselves with respect and professionalism toward faculty, students, and others present in class and will follow the rules laid down by the instructor for classroom behavior.  Students who fail to do so may be asked to leave the classroom. 

 

Collaboration on Graded Assignments
Students may not work together on graded assignment unless the instructor gives express permission. 

 

Course Evaluations
Course evaluations are important to us and to students who come after you.  Please complete them thoughtfully.

 

Academic Integrity

Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:

The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here:

Undergraduate College: http://www.stern.nyu.edu/uc/codeofconduct
Graduate Programs: http://w4.stern.nyu.edu/studentactivities/involved.cfm?doc_id=102505

To help ensure the integrity of our learning community, prose assignments you submit to Blackboard will be submitted to Turnitin.  Turnitin will compare your submission to a database of prior submissions to Turnitin, current and archived Web pages, periodicals, journals, and publications.  Additionally, your document will become part of the Turnitin database.

 

Recording of Classes

Your class may be recorded for educational purposes

 

Students with Disabilities

If you have a qualified disability and will require academic accommodation of any kind during this course, you must notify me at the beginning of the course and provide a letter from the Moses Center for Students with Disabilities (CSD, 998-4980, www.nyu.edu/csd) verifying your registration and outlining the accommodations they recommend.  If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.

 

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