Course Syllabus
International Finance
Global MBA for the Americas Program
Santiago, Chile
Feb. 27 – March 1, and March 20-22, 2014
Instructor:
Bill Reese
Email: wreese@tulane.edu
Office Phone: 504-865-5465
Course Overview
The purpose of this course is to provide you 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.
The course will involve class lectures, and a number of cases to work on. Some of the cases will
be done in groups, and some of them will be done individually. The final exam will be a takehome (open book) exam. Because we will be covering an entire semester’s worth of material in six
days, it is very important that students come to class well-prepared.
Textbook
International Financial Management 11th edition by Jeff Madura
Cases
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MSDI – Alcala de Henares, Spain – Harvard case 9-289-029
The Walt Disney Company’s Yen Financing – Harvard case 9-287-058
Hedging Currency Risks at AIFS – Harvard case 9-205-026
Dozier Industries – Harvard case F-163
The International Monetary Fund in Crisis – Harvard case 9-708-035
Carrefour S.A. – Darden case UV0283
Foreign Exchange Hedging Strategies at General Motors: Transactional and Translational
Exposures – Harvard case 9-205-095
R.J. Reynolds International Financing – Harvard case 9-287-057
Valuing a Cross-Border LBO: Bidding on the Yell Group – Harvard case 9-204-033
China’s Renminbi: “Our Currency, Your Problem”? – University of Hong Kong case
HKU710
Class Website
I will maintain a website for this class at http://info.freeman.tulane.edu/breeseemba/santiago.htm
On the website, I will include class notes, Excel spreadsheets, readings, and other important
information. Please check the website for details and check back to the website for any updates.
Grading
Take-home exam
Case Assignments
Participation
45%
50%
5%
Cases
Everyone will need to read each case and be prepared to discuss it in class.
For each case, there are questions posted on the class website that need to be answered.
The Dozier, RJR, MSDI, and Disney cases are individual assignments. You are expected to do all
four cases. Each student should turn in a hard copy of his/her answers to the questions (questions
are on the class website) at the start of class on the due date. All work on these cases must be done
on your own. I will call on some students to share their answers to some of the questions. Do not
email any of your work to me unless I specifically ask you to during class.
The Yell, AIFS, GM, IMF, Renminbi, and Carrefour cases are group assignments. Students should
divide themselves into the six groups listed below (with approximately the same number of
students in each group) and work on these cases with the other members of their group. Each
group will work on four of the six cases. You do not have to work on the other two.
Each group needs to be prepared to present its answers to the rest of the class with a PowerPoint
presentation on the due date for each of their four cases. I will randomly select two of the four
cases for each group to present. Each of the six cases will be presented twice. All group cases
should be professionally presented to your classmates. Plan on approximately 45 minutes
(including questions and answers) for your presentation (I am not strict about the length of the
presentation; I am more interested in the quality of the presentation). You will not find out which
two of your four cases will be chosen until the day of the presentation.
Here are the cases each group will prepare to present:
Group 1: AIFS, GM, Renminbi, and Carrefour
Group 2: Yell, IMF, GM, and Carrefour
Group 3: Yell, AIFS, IMF, and Renminbi
Group 4: AIFS, GM, IMF, and Renminbi
Group 5: Yell, GM, Renminbi, and Carrefour
Group 6: Yell, AIFS, IMF, and Carrefour
I do not care which students are in which group, as long as the size of each group is approximately
the same.
Class Format
This course will consist of six (6) 5.5-hour classes. Each class meets from 8:00 am until 1:30 pm.
The entire first two classes will be lecture format. During the third class, you will have time to
begin working on either your individual or group cases. At the start of the fourth class, your
individual cases will be due and we will spend most of the fourth class discussing them. Most of
the fifth and sixth classes will consist of the student presentations of the group cases along with
classroom discussion of the presentations. During the last hour of the last class, I will pass out the
take-home exam and go over it with you. Please see the tentative schedule below for details about
what will be covered during each class.
Laptops
You will need to bring laptops to class and have access to the internet so that we can work on
some problems using excel. Students may only use their laptops for specific projects that we are
working on as a class but may not use them for general web-surfing or emailing during class.
Prerequisites
Prior to the start of this course, all students should have completed at least one course in statistics,
one course in accounting, and one course in finance. Students will be expected to be familiar with
the time value of money concepts, the basics of stocks and bonds, net present value, internal rate
of return, calculations of expected values, standard deviation, covariance, correlations, and the
basics of linear regression.
Attendance and Attentiveness
Every student is expected to attend each class from start to finish. You are also expected to be
attentive to what is going on during class. Cellphones may not be used during class for any
purpose at all. We will have breaks during each class when you can check your email, make phone
calls, etc. Please plan to spend your in-class time focusing on what we are doing. Your
participation grade will be based solely on your attendance and attentiveness – not on how many
questions you ask or answer during class.
Tentative Schedule
Class
Material to be
Covered during Class
First
Thursday
Overview
International Trade
Balance of Payments
Exchange Rates
Forward Rates
Triangular Arbitrage
Locational Arbitrage
Purchasing Power Parity
First
Friday
Exchange
Rate Chapters 9-14
Determination
Forecasting Exchange Rates
Hedging
Transaction
Exposure
Currency Swaps
Investing Globally
Multinational
Capital
Budgeting
First
Saturday
Time to work on individual
and group cases
Second
Thursday
Discuss all four individual All
four Group cases if
cases
individual cases time permits
Second
Friday
Six
Group
Presentations
Case All six
cases
Second
Saturday
Six
Group
Presentations
Case All six
cases
Discuss Take-Home Exam
Readings to be Time to Work Cases Due at the
Finished Prior to on These Cases Start of Class
Class
During Class
Chapters 1-8
Any individual
or group case
group Group cases if Be prepared to
time permits
present any of
your four group
cases
group
Be prepared to
present any of
your four group
cases
Bill Reese Bio
Bill grew up in Silver Spring, Maryland and graduated in 1978 from The College of Wooster in Wooster,
Ohio with a BA in Speech. After working in the Cleveland area for four years as a high school teacher and
wrestling coach, he earned his MBA from Virginia Tech with a concentration in Finance. Bill spent the next
ten years working in the insurance and commercial banking industries before returning to school to
obtain his Ph.D. in Finance from the University of Arizona.
Bill has been a full-time finance professor at Tulane University’s Freeman School of Business since August
1997. While at Tulane, he has taught in each of Tulane’s programs: Undergraduate, Master of Finance,
Full-time MBA, Global MBA, Professional MBA and Executive MBA. Bill has taught numerous finance
courses for Tulane in Asia and South America as well as in the U.S. From 2001-2010, he worked for the
National Football League as a personal finance instructor for the New Orleans Saints. He has received the
EMBA Outstanding Teacher of the Year award, has been named to the MBA Teacher Honor Roll four
times, has received the EMBA Teaching Excellence award five times, the PMBA Teaching Excellence award
twice, and the Tulane Graduate Business Students voted to give him the Howard Wissner Award for
Teaching Excellence in 2008 and 2012. He has had his research published in The Journal of Finance and
The Journal of Financial Economics. He has received the All Star Paper Award from The Journal of Financial
Economics.
Bill is married and lives in Mandeville (on the northshore). His two daughters and their husbands all live in
Dallas. There are no grandchildren yet. During his free time, Bill keeps involved with his church and some
Bible Study groups. He has been an avid runner since 1990 and a triathlete since 2009, participating in
road races and triathlons whenever he can. Bill earned “All American” status from USA Triathlon during
the 2011 season and completed an Ironman Triathlon in May 2012.