San Francisco State University
Finance 535: International Trade and Finance
Spring 2006
Instructor:
Mr. Ming Li
Office: Bus 305
Phone: 415-338-7474
Email: mingli@sfsu.edu
Office Hours: M 2-4, T 5-7 and by appointment
Prerequisites:
A grade of C- or better in Fin 350; IBUS 330 and ISYS 263 or pass computer
information systems proficiency test.
Course Description and objectives:
Introduction to international financial environment of business. Topics include
elements of international trade theory and policy, balance of payments, foreign
exchange markets, Eurocurrency markets, international bond and equity markets,
foreign exchange futures, options and swaps, international equity investment. The
objective is to help the students understand international financial environment and
prepare them for more advanced courses in finance.
Course materials:
Required Textbook:
International Financial Management (IFM), by Eun and Resnick, McGraw-Hill, 3rd
Edition
In addition to the text, following sources provide extensive information on current
issues of international trade and finance: The Wall Street Journal, The Economist and
Financial Times.
Class Website:
Our class website for course agenda, documents and announcements is
http://userwww.sfsu.edu/~mingli/fin535_spring_06/index.html
Blackboard will be only used for posting quiz scores.
https://www.sfsu.edu/online/bb.htm
Homework
There will be weekly homework assignment. You are not required to turn in your
homework. Solutions will be posted on the course web site. In general, homework
exercises require critical thinking and quantitative skills. Homework exercises are
extremely helpful to your understanding of course materials. You shall prepare
yourself for the final exam by working on these problems. To help improve your
problem-solving skills, I will discuss homework problems regularly in class
throughout the course.
1
Exam
There will be one final examination only. Please note the exam date in the course
schedule. The examination will contain multiple-choice and essay questions. For
the exam you will be allowed to bring in a calculator, and an 8½ by 11 sheet of
paper on which you can write, type, or copy anything that you like (yes you can
write on both sides!) I suggest that you use the paper sheet for economic and
financial formulas. No other materials may be used during the exam.
You will need a SCANTRON form No. 882-ES for the examination. It is available in
the university bookstore.
Quiz
There will be four quizzes. Each quiz contains one or two (essay or problem solving)
questions and takes about 15-20 minutes. Your best three quiz scores will count toward
your final score and lowest one will be dropped.
All quizzes are closed-book test. You are only allowed to bring in a calculator. No
other materials may be used.
Quiz Date and Coverage
Quiz 1, Feb 21
Chapter 1A, 2
Quiz 2, Mar 14
Chapter 3, 4
Quiz 3, Apr 11
Chapter 5, 6,
Quiz 4, May 2
Chapter 7, 8, 9
Mini-case Report
I will assign four mini-cases. You are required to turn in two mini-case reports. The
first report you turn in must come from min-cases either I or II and second from either
III or IV. Each report that you turn in has a maximum 15 points. Each mini-case
assignment has a deadline date. Make sure you submit your report by the due day if
you intend to do so. I do not accept late report. If you turn in more than two reports, the
average score (multiplied by 2) will count toward your final score.
Mini-case assignment and due date
I. Mexico’s Balance-of-Payments Problem, page 72
Due: Mar 14.
II. Turkish Lira and Purchasing Power Parity, page 124
Due: Apr 11.
III. Detroit Motor’s Latin America Expansion, page 152
Due: Apr 18
IV. The Options Speculator, page 225
Due: May 9
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Grades:
Your final score will be determined by the following distribution.
Quiz
Mini-case (two reports)
Final Exam
Total
36pts
30pts
54pts
120pts
Final scores will be curved. Letter grade is given according to the following chart:
Final Total Percentage
Course Grade
90 - 100%
A- to A+
80 - 89%
B- to B+
70 - 79%
C- to C+
60 - 69%
D- to D+
Below 60%
F
A B- is 80-83%, B is 83%-86%, B+ is 86-89% etc.
There are two possible ways you can earn an A(A-, A or A+). First if your curved
score is between 90-100%, you will get an A(A-, A or A+) according to the above
chart. Second, if your final score is 108pts (out of 120pts) or more, you will be
guaranteed an A-. You will have a better grade if your curved score is greater than 93%
at the same time.
There will be NO makeup exams. No Incomplete grade will be given for this
course. If you have a valid excuse for missing the final exam, you will be allowed to
take a makeup test. If you do not have a valid excuse for missing an exam, it will count
as a zero.
In order to be excused from an exam, the student must contact me before the exam. In
most cases I will require students to provide me with additional documentation to
justify why the student is unable to take the exam. Please note that a simple note
indicating that you were seen at the health center the day of the exam does not, in and
of itself provide sufficient documentation.
I would not accept any excuses such as booked air flights, wedding attendance etc. If
you have a time conflict on the exam date due to your class schedule, you must let me
know at least two weeks before the final week.
Class Procedures and Suggestions:
1. The method of teaching for this class is a combination of lecture presentation,
problem solving and case analysis.
2. The structure of this class makes your individual study and preparation outside
class extremely important. The lecture material will focus on the major points
introduced in the text. Reading the assigned chapters and having familiarity with
them before class will greatly assist your understanding of the lecture. After
the lecture, you should study your notes and work assigned homework
3. Attend class regularly. Excessive absences (more than two per term) tend to
result in a low or failing grade.
4. The course builds as it goes along. Make sure you do not get lost early, or
you will have great difficulty catching up. If you don’t understand the early
material, please feel free to take advantage of office hours, and ask!!
3
Course Schedule:
This schedule is tentative, and subject to change. Any variations will be announced in
class. If you are absent from class, it is your responsibility to check on announcements
made while you were absent.
Date
Jan 31
Feb 7
Feb 14
Feb 21
Feb 28
Mar 7
Mar 14
Mar 21
Mar 28
Fin 535: International Trade and Finance
Length Topic and Reading
(weeks)
1
Administrative handout
Introduction to the course
Reading: Ch1
1
International Trade Theory
Trade Policy
Reading: Ch 1, Appendix 1A
1
International Monetary System
Balance of Payments
Reading: Ch 2, 3
2
Balance of Payments
Reading: Ch 3, Appendix 3A
1
Foreign Exchange Market
Reading: Ch 4
2
Foreign Exchange Parity Conditions
Reading: Ch 5
1
International Banking and Money Market
Reading: Ch 6, Appendix 6A
Apr 11
1
International Capital Markets
Reading: Ch 7,8
Apr 18
Apr 25
2
Foreign Exchange Futures and Options
Reading: Ch 9
May 2
May 9
2
Currency and Interest Rate Swaps
Reading: Ch 10
May 16
May 23
1
Final Review
Final Exam:
May 23, Tuesday 7-10
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Homework
Page 22: 2,6
Page 22: 4
Page 25: 1, 2
Page 56: 2, 3, 4, 7, 9, 10, 12
Page 71: 3-12
Page 95: Questions 3,5,6-9
Page 95-96: Problems 1,6,8
Page 122: 2-5
Page 123: 2-4,6
Page 151-152:
Questions 2, 5, 6
Problems 1-3, 6
Page 174: Questions 2-4,6
Problems 1, 2
Page 197: Questions 2, 5, 6
Page 222-225:
Questions 1,2,3,5,6
Problems 1,2,10-13 and
handout (To be distributed)
Page 242-243:
Questions 1-7, 9
Problems: 1-3
American with Disabilities Act (ADA) Accommodation
The University is committed to providing reasonable academic accommodations to
students with disabilities. Please notify you instructor if you are registered with
Disabilities Resource Center so that reasonable efforts can be made to accommodate you.
Contact the Disabilities Programs and Resource Center in Student Services Building 110.
(415)338-2472,
Statement of Academic Integrity
All students enrolled in classes at San Francisco State University, College of Business,
are expected to maintain integrity in all academic pursuits, such as writing of papers,
examinations, quizzes, assignments, records, and other details relative to the assessment
of student performance. Any dishonesty with regard to these matters is subject to censure
or penalty in proportion to the seriousness of the action.
Statement on Disruptive Classroom Behavior
In the classroom or laboratory environment you must respect the rights of others seeking
to learn, respect the professionalism of the instructor, and honor the differences of
viewpoints. Student conduct that disrupts the learning process will not be tolerated and
may lead to disciplinary action and/or removal from class. Disruptive behavior is defined
as “behavior a reasonable person would view as substantially or repeatedly interfering
with conduct of a class.” Listed below are some examples of disruptive behavior:
Excessive lateness to class/unexcused exits, sleeping in class, prolonged chattering, and
overt inattentiveness, cell phone, pager use, disrupting the instructor’s authority and
expertise, verbal aggressiveness directed at classmates or instructor, grandstanding, etc.
This is not an exhaustive list, but one intended to convey what is considered disruptive to
the class and put students on notice that this type of behavior will not be tolerated.
Statement of Course Registration Status
You are responsible to ensure you are enrolled or have been dropped from the class by
university deadline dates. Your instructor is NOT responsible for dropping you from the
class list if you elect to withdraw or stop attending.
If you must withdraw from class after the fourth week, bring your petition and
appropriate documentation to the instructor during office hours for discussion. Deadlines
for all registration procedures, including withdrawals and requests for credit/no credit, are
listed in university academic calendar and will be strictly adhered to by the instructor.
Following are the university deadline dates for this semester.
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