Course Syllabus

Finance 7150-21

Fall 2017

CourseInternational Finance

ProfessorBill Reese

Office: Room 604

Office Phone: 865-5465

E-mail:

Office Hours: by appointment

TextbookInternational Financial Management 12th Edition

By Jeff Madura

While I encourage you to purchase this current edition of the text, ultimately the choice of which edition to purchase and indeed whether to purchase a text or not is up to each student. You can purchase or rent the text here:

PrerequisitesFINE 6050 or FINE 6020

GradingIndividual Cases25%

Group Case10%

Midterm Exam25%

Final Exam35%

Attendance 5%

I plan to adhere to the Freeman School grading guidelines which recommend a class-GPA in the range of 3.33 – 3.67 for electivegraduate courses.

Objectives: The primary objective of this course is to provide students with a solid understanding of the basic principles of international finance. Emphasis will be placed on understanding the roles of trade and exchange rates in the global economy as well as how individual firms can obtain financing, make capital budgeting decisions, and minimize risk in a global environment.

AttendanceI think that it is important for you to attend class and participate in class discussions. You will be responsible for anything covered in class, even if you are not in attendance that day.In addition to the 5% of your grade that is based on attendance, I reserve the right to reduce a student’s grade due to excessive absences from class, a lack of attentiveness during class, or inappropriate use of a laptop or cellphone during class.

Individual

CasesAll seven individual cases must be read by every student, but each student only needs to turn in solutions for five of the seven cases. Feel free to choose whichever five you want. For each individual case, I will post a series of questions/problems on the class website that need to be turned in. We will discuss these cases in class the day that the assignment is due and students will be expected to actively participate in the discussion. For these individual cases, I will allow students to work in pairs if you wish. Please see each case assignment for details:

  • Dozier Industries – Harvard case F-163
  • R.J. Reynolds International Financing – Harvard case 9-287-057
  • MSDI – Alcala de Henares, Spain – Harvard case 9-289-029
  • The Walt Disney Company’s Yen Financing – Harvard case 9-287-058
  • Carrefour S.A. – Darden case UV0283
  • Emerson Electric Company – Darden case UV2151
  • Diva Shoes, Inc. – Darden case UV0265

Group

CasesStudents will need to divide themselves into six groups. Each group will be responsible for the class presentation of oneof the group cases. Every student is responsible for reading each case, even the ones your group is not presenting. Group case presentations should involve the entire group and should be professionally done using PowerPoint. Presentations should take 30-40 minutes. There will be some class discussion after each presentation, so be sure to have read each case. Please see the class website for details on each case.

  • Hedging Currency Risks at AIFS – Harvard case 9-205-026

*Note that this case requires a basic understanding of options

  • Tokyo Disneyland and the DisneySea Park – University of Hong Kong Case HKU568
  • Innocents Abroad: Currencies and International Stock Returns – Harvard Case 9-204-141

*Note that this case requires an understanding of the Efficient Frontier and the use of Solver in Excel

  • Corporate Inversions: Stanley Works and the Lure of Tax Havens – Harvard case 9-203-008
  • Barclays and the LIBOR: Anatomy of a Scandal – Stanford Case ETH-03AND Has LIBOR Lost its Stature in Derivatives Markets? – Ivey Case W16695
  • The Hand in Hand’s Story of Making Microfinance Work for the Bottom of the Pyramid – Case Research Journal Case NA0385

CasebookA casebook which contains all the individual and group cases will need to be purchased. Details can be found on the class website. Purchase of the casebook is required.

ExamsThe midterm exam will be given during our scheduled class on October 23. For it, you will be responsible for everything we have covered up to that time. The final exam will be given on Dec. 4 during normal class hours.It will cover everything in this course. That includes information on all seven individual cases and all six group cases. Each of these exams has the potential to last longer than our scheduled class time. To compensate you for this extra time, we will not have class on Sept. 11.

SyllabusPlease note that this syllabus is not a contract. It is a statement of expectations and information. I reserve the right to change anything in it at any time.

WebsiteI will be maintaining a website for this course at

On it, I will be posting announcements that you will want to read,

class notes, test scores, case information and other worthwhile information. I strongly encourage you to visit the website regularly to keep up with what’s going on in class.

LaptopsLaptops may be used during class to take notes and to work through Excel problems we are doing. They are not to be used for web surfing, emailing, messaging or anything not directly related to what we are studying at that moment. If they are being used during class for any purpose other than work we are doing in this class, your grade for the course will be reduced. Cellphones may not be used during class.

Norms and

ExpectationsThis class will be conducted in full accordance with published Norms and Expectations for Students in Freeman Classes. Please review the Norms and Expectations in your program handbook.

Academic IntegrityThis class will be conducted in full accordance with Tulane’s policies about academic integrity including, but not limited to, the Unified Code of Graduate Student Academic Conduct ( and the Tulane University Code of Student conduct (

DisabilitiesUnder the Americans with Disability Act and Section 504 of the Rehabilitation Act, if you have a disability, you may have the right to an accommodation; however, the right is contingent upon your taking certain steps. You should review the steps that you need to take, as well as Tulane’s policy concerning accommodations at Any student with a disability, in need of course or examination accommodation, should request an accommodation through the University’s Goldman Office of Disability Services (ODS) located on the first floor of the Mechanical Engineering Building. At the beginning of the semester, please provide me with a copy of your approved ODS accommodation form. I am committed to working with ODS to ensure that I provide you with all approved accommodations. If you do not deliver the approved accommodation form to me, I will not know that ODS approved your accommodation and I will have no basis to provide those accommodations.

Tentative Schedule

Date / Material to be Covered in Class
Aug. 21 / Introduction
Overview/History
International Trade and The Balance of Payments
Aug. 28 / Exchange Rates
Forward Rates
Interest Rate Parity
Sept. 11 / No Class
Sept. 18 / Triangular Arbitrage
Locational Arbitrage
Absolute Purchasing Power Parity
Inflation
Inflation Expectations
Relative Purchasing Power Parity
Sept.25 / Exchange Rate Determination
Forecasting Exchange Rates
Transaction, Translation and Economic Exposure
VaR
Oct. 2 / Multiple Currency Transaction Exposure
Hedging Transaction Exposure
Currency Swaps
Emerson Case
Oct. 16 / Investing Globally
Multinational Capital Budgeting
Dozier Case
Review for Midterm Exam
Oct.23 / Midterm Exam
Oct. 30 / Go over Midterm Exam
MSDI Case
Nov. 6 / Diva and RJR cases
Nov. 13 / Disney and Carrefour cases
Nov. 20 / Quantitative Group Case Presentations
Nov. 27 / Qualitative Group Case Presentations
Dec. 4 / Final Exam