Rochester Institute of Technology
Finance for Global Business
0104760-75
Winter 2003 / 2004
Saturday 8:30 am – 11:50 am
Building 12 Room 3225
Quarter: 20032
Instructor: Dr. Merouane Lakehal-Ayat
Office hours: One hour after class or by appointment
Office address: A309 Lowenthal
Office phone: 385-8429; 475-7402 / 6063
Fax number: 475-6920
E-mail address: lakehal@sjfc.edu
Course description: This course provides a framework for the study of concepts, theories, principles
and techniques that form the foundation of decisions in the field of international finance. Credit 4.
Prerequisites: 0104-721 Financial Analysis for Managers
Course Objectives: This course has four objectives




Study and analyze the international financial environment under which the multinational
corporation operates, including current major international issues.
Examine the concepts, issues and challenges associated with changing rates.
Gain exposure to the various approaches used in the management of risks associated with
differing exchange rate systems and behavior.
Discuss concepts and issues associated with short and long term asset and liability
management.
Required Text:
Title
Multinational Business Finance
Author
Eiteman, Stonehill, and
Moffett
Additional Materials: As assigned by the instructor.
Online resources: As assigned by the instructor.
Edition
10th Ed.
Publisher
Pearson Addison
Wesley
Dates
2004
Grading:







Participation
Cases
Research Paper
Currency Project
Midterm
Final Examination
Total
15%
10%
20%
5%
20%
30%
100%
Participation:
Students’ participation is actively sought and rewarded. Each student is expected to read the assigned
chapters before class and work out the problems. Students will be asked to answer questions and solve
problems in class.
Research Paper: This is an individual assignment. You are expected to develop an indebt analysis on
the future of the Chinese Renminbi currency (To float or not to float). Additional details and
guidelines will be given in class. The paper is due on February 7, 2004.
Cases: The class will be divided into groups. Groups are required to prepare and present a main case
for class discussion with a formal submission to the instructor.
Currency Project: Students are expected to select a currency of their choice (exclude Chinese
Renminbi) at the beginning of the semester. Each student is expected to follow the daily movement of
the currency spot, forward, options, and future prices, then analyze and report on these changes to the
class every week. Moreover, a final paper has to be submitted by February 14th. Additional detail about
the paper will be provided in class.
Course Outline: May be subject to adjustments
Class
Date
Topics Covered
Remarks
1
December 6th
Chapter 1: Financial Goals and Corporate
Governance
Chapter 2: The International Monetary
System
Problems: 3, 5, 6 (pg: 16, 17)
Problems: 2, 4, 7, 9 (pg: 42, 43)
2
December 13th
Chapter 3: The Balance of Payments
Chapter 4: The Foreign Exchange Market
Presentation mini-case ch.1
(pg 19 – 22)
Presentation mini-case ch.3
(pg: 66 - 68)
Problems: 5 through 9,
14 through 20 (pg: 64, 65)
Problems: 1, 2, 7, 8, 9,
13, 15 (pg: 90 through 92)
3
December 20th
Chapter 5: Foreign Currency Derivatives
Presentation mini-case ch.5
(pg: 127 - 132)
Problems: 2, 4, 6, 7, 8, 15 (pg: 122, 123,
124, 126)
4
December 27th
No Class, Winter Break
5
January 3rd
No Class, Winter Break
6
January 10th
Mid-Term Exam
7
January 17th
Chapter 6: International Parity Conditions
Chapter 7: Foreign Exchange Rate
Determination
Problems: 1, 2, 7, 9, 17 (pg: 156, 157, 158,
159)
Problems: 1 through 10 (pg: 191, 192, 193)
8
January 24th
Chapter 8: Transaction Exposure
Chapter 9: Operating Exposure
Presentation mini-case ch.8
(pg: 231 – 232)
Presentation mini-case ch.9
(pg: 265 – 268)
Problems: 9, 15 (pg: 223, 225)
Problems: 2, 6, 8 (pg: 262, 263)
9
January 31st
Chapter 10: Accounting Exposure
Chapter 11: Global Cost and Availability of
Capital
Presentation mini-case ch.11
(pg: 325)
Problems: 8, 9, 10 (pg: 293)
Problems: 6 through 10 (pg: 322, 323)
10
February 7th
Chapter 18: Multinational Capital Budgeting
Presentation mini-case ch.18
(pg: 560 - 563)
Problems: 1, 3, 5 (pg: 555, 556, 557)
11
February 14th
Chapter 22: Working Capital Management
in the MNE
Presentation mini-case ch.22
(pg: 709 - 711)
Problems: 1 through 5 (pg: 704, 705)
12
February 21st
Final Exam