MW 3.15 - 3.45 PM and By Appointment
Deatils posted on the blackboard.
Deatils posted on the blackboard.
MW, 2:00pm to 3:15pm
Final Exam: As scheduled by NYU in Exam Week
Final Exam: As scheduled by NYU in Exam Week
This course extends the principles of Finance to an international context, where aside from asset risk, firms face the additional component of exchange rate and interest rate risk management to its global investment and financing decisions.
The first part of the course deals with an overview of the global financial environment, existence of various currency instruments- forwards, futures, options, and swaps-, the existence of offshore financial markets (Eurocurrency markets), and their applications in hedging exchange rate risk. After equipping ourselves with the basic tools available to handle exchange rate risk, we shall discuss the measurement and management of different types of foreign exchange exposure - transaction, translation and economic exposure. We shall discuss issues involved in international investment and financing alternatives, internationaltrade financing, and international working capital management.
Week Topic Readings
Week 1 Introduction & Background: Handout: #1
International Monetary System (ESM) Chapter 3
European Monetary Union
2A / 5A Foreign Exchange Rate Markets: Handout: #2
Forwards, Futures, Options. (ESM) Chapters 6,7,8
5B MID-TERM EXAM #1 (10th class meeting – October 13)
6 Currency & Interest Rate Swaps Handout: #3
(ESM) Chapter 9
7 International Parity Conditions Handout #4
Exchange Rate Determination (ESM) Chapter 7
8/9 Foreign Exchange Risk Management: Handout: #5
Transaction & Operating Exposure (ESM)Chapters11,12,13
10A MID-TERM EXAM #2 (19th class meeting)
10B / 12 Financing Globally: Euromarkets Handout: #6
Global Bonds & Global Equities (ESM) Chapters 15,16
Index Mutual Funds
Exchange Traded Funds, iShares, etc.
13 International Capital Budgeting Handout #7
Political Risk (ESM) Chapter 19
14A International Trade Financing Handout: #8
14B Last Meeting: Finalize work on your group project in class
Group Project Due on Final Exam Date
FINAL EXAM (NYU Exam Week)
(1) My own handouts/manuscript. Posted On Blackboard.
(2) Eiteman, Stonehill & Moffett: Multinational Business Finance, Custom Edition (Abridged), Addison-Wesley Publishers (2010)
2 Mid-Term Exams: 45%
Group Project 15%
Class Participation / HW: 10%
The lower mid-term will be graded at 20% & higher one 25%. Final is 30%. Absolutely no makeup exams are given without prior permission, which is rarely given. If sick, you will need to get an official doctor’s certificate.
The requirements for the course include two mid-term exams, one final exam, a group project and active class participation.You will be allowed one 3 x 5 index card of notes in the exams, both sides. I will assign some homework problems at random and collect 2 or 3 at random. I will not accept any latehomework and will not accept any homework by email. Class attendance and participation is required, strongly recommended & graded seriously.
As for readings / textbook in this course, I will be using my own handouts which will be posted on the blackboard (nearly 150 to 200 pages). The second custom edition textbook by Eiteman, Stonehill and Moffett is required – it is an abridged version of the full text with only 10 chapters and costs half the regular price. If you can find the used eleven edition of the full text, feel free to buy it – it will save you a lot of money. Textbooks rarely change from one recent edition to another. The book is a backup reading to my notes.
Group Project: This project will have to be done in a group of 4 or 5 students, depending on the total enrollment. It has to be an analysis of any multinational company of your choice and will require a complete analysis of its international operations – location(s), revenue/sales by region, market share by region, international acquisitions, international financing or raising of capital, translational risk, hedging of exchange rate risk, international corporate governance, etc. More details will be provided in the class. The project is due on the date of the final exam.
Guidelines for Group Projects
Business activities involve group effort. Consequently, learning how to work effectively in a group is a critical part of your business education.
Every member is expected to carry an equal share of the group’s workload. As such, it is in your interest to be involved in all aspects of the project. Even if you divide the work rather than work on each piece together, you are still responsible for each part. The group project will be graded as a whole: its different components will not be graded separately. Your exams may contain questions that are based on aspects of your group projects.
It is recommended that each group establish ground rules early in the process to facilitate your joint work including a problem-solving process for handling conflicts. In the infrequent case where you believe that a group member is not carrying out his or her fair share of work, you are urged not to permit problems to develop to a point where they become serious. If you cannot resolve conflicts internally after your best efforts, they should be brought to my attention and I will work with you to find a resolution.
You will be asked to complete a peer evaluation form to evaluate the contribution of each of your group members (including your own contribution) at the conclusion of each project. If there is consensus that a group member did not contribute a fair share of work to the project, I will consider this feedback during grading.
At NYU Stern we seek to teach challenging courses that allow students to demonstrate their mastery of the subject matter. In general, students in undergraduate core courses can expect a grading distribution where:
Note that while the School uses these ranges as a guide, the actual distribution for this course and your own grade will depend upon how well you actually perform in this course.
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.
In-class contribution is a significant part of your grade and an important part of our shared learning experience. Your active participation helps me to evaluate your overall performance.
You can excel in this area if you come to class on time and contribute to the course by:
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 are important to us and to students who come after you. Please complete them thoughtfully.
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.
Your class may be recorded for educational purposes
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.