Kazakhstan Institute of Management, Economics and Strategic Research (KIMEP)
Bang College Business (BCB)
Course Syllabus for FIN4235 International Financial Management
Fall Semester 2013
1.
Basic Information
Course Code and Title:
Course Meeting Time and Place:
Course Credit:
Instructor Information
Instructor:
Office:
Phone:
FIN4235 International Financial Management
16:00-17:15 TTh#10/ Valikh. bld.
Three (3) hours
Razzaque H Bhatti, PhD
Room #329 Dostyk Building
2348; E-mail: Bhatti@kimep.kz
2.
Instructor Availability
Office hours: 12:30:2:00 TTh
And by appointment
3.
Course Description/Overview
This course is structured to cover principles and applications of managerial finance in an
international context. The course intends to provide you a basic understanding of
international financial management, and will cover the chapters pertaining to exchange
rates, interest rate parity and international arbitrage, exchange rate fluctuation exposure,
transaction exposure, economic exposure, and translation exposure, in addition to
international financing. The course provides you an understanding of how to make
optimal economic and financial decisions under the auspices of international conditions
and various international exposures.
4.
Learning objectives:
1. To introduce you to the world of International Financial Management.
2. To explore the fundamentals of international financial environment.
3. To provide you understanding of the operation and behavior of exchange rates.
4. To explain the implications of exchange rate volatility and balance of payments for
the profitability and success of global firms.
5. To examine how multinational firms manage their foreign exchange risk exposure.
6. To help improve your analytical and computational skills necessary to face the
challenges in the world of International Financial Management.
5.
Relationship of Course and Program
Pre-requisites: FIN3101 , FIN3121
6.
Teaching Methodology
In a typical session, the lecturer will teach on the topics/materials first, followed by
questions and/or class discussions. You are expected to learn the class contents by
reading assigned text first and solving, if possible, assigned problems and case studies
before each lecture.
Your participation is essential for this course and as such you will be strongly encouraged
to participate in class discussions and solve problems during the classes.
7.
Assessment Scheme:
You performance in this course will be evaluated on the basis of the following criteria:
Mid-term Examination (15%, 15%)
Two mid-term exams, each based on multiple-choice questions, short-answer questions
and problem solving, will be given during the semester. Each midterm-term will count
15% of the total evaluation for the course. Please note that no make-up exam will be
given except for conflicts with official university business or extreme emergencies.
Take-Home Exams/Assignments (15%)
Four take-home exams/assignments, based on end-of-chapter problems, cases and related
materials from reference texts, will be given, and these will count 15% of the total grade
for the course. You will be allowed to drop the lowest take-home exam grade. You will
surely observe the benefit of doing take-home exams/homework problems while taking a
quiz or an exam. Please note that I will not accept late submission, except for conflicts
with official university business or extreme emergencies.
Quizzes (15%)
Four quizzes will be given in class to keep you updated regarding the materials already
covered and presented in the class. You will be allowed to drop the lowest quiz grade.
Like take-home exams/assignments, you will see the usefulness of taking the quizzes.
Quizzes will be administered anytime during the regular class time: at the beginning of
class, at the middle of class, or even at the end of class. Please note that no make-up quiz
will be administered, except for conflicts with official university business or extreme
emergencies.
Final Project (15%): Final project is intended to improve your problem-solving abilities
and knowledge of practice of International Finance. It will deal with issues from the
“real world” of International Finance from the local context. The project will be assigned
on a group (two members) basis. Also, you will be responsible for presentation of your
project in the class. Details of individual/group case(s) and projects will be provided in
due course of time.
Final Exam (25%)
The final exam is designed to test your comprehensive knowledge and understanding of
the issues discussed in the classroom. It will comprise some combination of essay/short
answers, problems, and multiple-choice questions. Please note that no make-up exam
will be administered except for conflicts with official university business or extreme
emergencies. In the former case, please notify me (at least) one week in advance of
the exam. Under both situations, you are expected to provide appropriate written
documentation. You will be notified of the exact date of each exam at least one week in
advance.
Bonus Pints (3 points for attendance plus 3 points for problem solving in class)
You are encouraged to attend lectures regularly to obtain up to 6 bonus points. If you attend all (100%)
lectures you can obtain 3 points as bonus. If you attend 80% lectures you can get 1.6% marks. However, if
your attendance falls below 80%, you will not to get any bonus points. You will be given surprise questions
to be solved during lectures, and if you submit of a correct solution you can get 3 points bonus.
The sum of the above assessment is equal to 100% and your total percentile will
determine you final class grade. The total evaluation for the course is distributed as
follows:
Activities
Percent to the Total
Student Hours Required
Assessment
to Complete the Tasks
Continuous Assessment (60%)
Take-home Exams/Assignments
15.00%
15 hours
In-class Quizzes
15.00%
10 hours
Mid-term Exam I
15.00%
15 hours
Mid-term Exam II
15.00%
15 hours
Subtotal
60%
60 hours
Final Assessment (40%)
15.00%
15 hours
Final Project
Final Exam
25.00%
15 hours
Subtotal
40%
30 hours
Total
100.00%
90 hours
8.
Grading Scale
Letter grades for the course will follow the same standards as specified in the 2008-2009
Catalog. See the following table for grading scale:
Grade quality
A+
A
AB+
B
BC+
C
CD+
D
DF
9.
Numerical scale or
percentile
90-100
85-89
80-84
77-79
73-76
70-72
67-69
63-66
60-62
57-59
53-56
50-52
Below 50
Rules for Class Participation and Instructor’s Expectations of Students:
a.
You are expected to strive for excellence in acquiring knowledge.
b.
You are expected to assist in maintaining discipline in the class room in to ensure
uninterrupted teaching and learning process. So switch off your mobile phones, car
alarms and keep silence in the class room. If any student disturbs the teaching
process (by means of talking etc.) he will be asked to leave the classroom.
c.
You are expected to regularly attend all lectures, tutorials, and exams. There will be
attendance record but it will not be part of the grade. You are expected to arrive in
.
the classroom before the class begins and if you show up late for lectures, tutorials,
or exams you may not be allowed to enter the classroom.
10.
d.
You must bring you own calculator when you come in class. I will not allow you to
use your cell phone as a calculator.
e.
You are expected to complete your assignments individually or in
group on your own. You are not expected to share, lend or borrow
another student’s (group’s) work in any manner; either on paper, by
computer disk or by word of mouth. Cheating, Plagiarism, or any
other form of scholastic dishonesty or misconduct will result in the
strictest disciplinary action, according to the KIMEP regulations
(please refer to your catalog for details). Also, please read materials
in the folder “plagiarism” in L Drive.
f.
If any student in this course has a disability that prevents him demonstrating his
abilities to the fullest should contact me personally. We will make our best effort to
devise the appropriate accommodation in order to facilitate your successful
completion of this course.
g.
If you discontinue attending classes, and if do not officially drop the course, or
withdraw from the University, you will receive a grade of “F”. Please refer to your
catalog or visit the registrar office for details.
h.
You will not be granted a grade of incomplete except for the most extreme
circumstances and only after stringent verification and approval by the department.
A grade of incomplete will be granted only as a result of circumstances beyond
your control. A grade of “I” is not given in lieu of an “F”.
UMAIL
UMAIL will be used from time to time to contact to have better communication with the
students.
11.
Period-by-Period Schedule
Weekly Activity Schedule: The following teaching schedule and key dates are presented:
Instructor may change the schedule at any time.
Week and dates
Week 1
Sep 3-9, 2013
Week 2
Sep 10-16, 2013
Week 3
Sep 17-23, 2013
Week 3
Sep 19, 2013
Week 4
Sep 24-30, 2013
Chapters &
assignments
Estimated
student
time*
Discussing syllabus, grade assessment, etc.
Multinational Financial Management: An
Overview
Ch 1
3 hours
International Flow of Funds
Ch 2
6 hours
International Financial Markets
Ch 3
6 hours
Ch 4
6 hours
Class
activities, key dates, etc
1st Quiz
Exchange Rate Determination
Week 5
Oct 1-7, 2013
Week 5
Oct 3, 2013
Week 6
Oct 8-14, 2013
Week 6
Oct 10, 2013
Week 7
Oct 15-21, 2013
Week 8
Oct 22-28, 2013
Week 9
Oct 29-Nov 4, 2013
Week 9
Oct 31, 2013
Week 10
Nov 5-11, 2013
Week 10
Nov7, 2013
Week 11
Nov 12-18, 2013
Week 11
Nov 14, 2013
Week 12
Nov 19-25, 2013
Week 13
Nov 26-Dec 2, 2013
Week 14
Dec 3-9, 2013
Week 15
Dec 10-16, 2013
Week 16
Dec 15-23, 2013
Total Study hours
required
Currency Derivatives
Ch 5
6 hours
2nd Quiz
Exchange Rate History and the Role of
Governments
Ch 6
6 hours
Ch 7-8
6 hours
Ch 9
6 hours
Ch 10
6 hours
Ch 11-12
6 hours
Ch 12
6 hours
1st Midterm
International Arbitrage and Interest Parity
Relationship Among Inflation, Interest Rates and
Exchange Rates
Forecasting Exchange Rates
3rd Quiz
Managing Economic Exposure
Measuring Exposure to Exchange Rate
Fluctuations
4th Quiz
Managing Economic Exposure and Translation
Exposure
2nd Midterm
Managing Economic Exposure and Translation
Exposure
Multinational Capital Budgeting
Long-term Financing and
Financing International Trade
Long-term Financing and
Financing International Trade
Classes Ends
Final Examination
Final Exam will be comprehensive
28 hours
8 hours
Ch 12
6 hours
Ch 13-14
6 hours
Ch 16-17
6 hours
Ch 16-17
6 hours
15 hours
90 hours
*For each lecture hour, students are expected to spend two additional out-of-class study hours.
11.
Instructional Resources
Required textbook:
1.
International Financial Management, Jeff Madura and Roland Fox, 2e South-Western,
2011 Cengage Learning.
2.
International Corporate Finance , Jeff Madura, 2006, Thomson
Reference Texts:
1.
2.
3.
4.
5.
6.
International Finance: An Analytical Approach, Imad A Moosa, 3e, McGraw Hill, 2010.
International Parity Conditions: Theory, Econometric Testing and Empirical Evidence, Imad A Moosa
and Razzaque H Bhatti, McMillan, 2007. (MB97).
The Theory of and Empirics of Exchange Rates, Imad A Moosa and Razzaque H Bhatti, World
Scientific Publishing Co., 2011. (MB11)
International Financial Management, Eun and Resnick, 3e, Mc-Graw Hill, 2004.
Multinational Financial Management, Alan C. Shapiro, 7e, John Wiley and Sons Inc., 2003.
Cases in International Finance, Michael H. Moffett, Addison Wesley Longman, 2001. (Mc)
Journal Articles:
1.
Bhatti, R.H. (2013) ”Some Evidence on the Monetary Model of Exchange Rates: The Case of Pakistani
Rupee”, Journal of International Economic Studies, Vol. 27, forthcoming
2.
Bhatti, R.H. (2013), “Does Speculation Play any Role in Determining CIS Exchange Rates, Economia
Internazionale, forthcoming
3.
Bhatti, R.H. (2012), “On the Profitability of Carry Trades in Five CIS Countries, AFBE Journal, 5 (2), 179191.
4.
Bhatti, R.H. (2011) “Does Uncovered Interest Parity Hold? Evidence Based on Five CIS Countries”,
Published in the Proceedings of Annual International Conference on Accounting and Finance
Scheduled held at Hotel Fort Canning, Singapore on May 23-24, 2011.
5.
Bhatti, R.H. (2011) “On Conventional and Ex Ante Purchasing Power Parity”: The Case of Three CIS
Countries” Published in the Proceedings of the KIMEP International Conference on “Global Business
and Market Transformation: New Developments in Eurasia”, Held on Friday-Saturday, April 22-23, 2011.
6.
Moosa, I.A. and Bhatti, R.H. (1997) Are Asian Markets Integrated? Evidence for Six Countries vis-à-vis
Japan, International Economic Journal, 11, 51-67.
7.
Moosa, I.A. and Bhatti, R.H. (1997) Are Pacific Markets Integrated? A Case Study of Australia, New
Zealand and Japan, Journal of International Economic Studies, 11, 93-107.
8.
Bhatti, R.H. (1997) On Single- and Multi-market Unbiasedness in the Forward Exchange Rates: Some
Evidence from Four Asian Countries, Journal of Economic Integration,12, 402-417.
9.
Moosa, I.A. and Bhatti, R.H. (1996) Does Europe Have an Integrated Capital Market? Evidence from Real
Interest Parity Tests, Applied Economics Letters, 3, 517-520.
10. Moosa, I.A. and Bhatti, R.H. (1999) Some Popular Misconceptions about the Theory and Empirical Testing
of Purchasing Power Parity, Journal of International Economic Studies, No13. 1147-161.
11. Bhatti, R.H. (1996) A Correct Test of Purchasing Power Parity: The Case of Pak-rupee Exchange Rates,
Pakistan Development Review, Papers and Proceedings, 35, 671-682.
12. Moosa, I.A. and Bhatti, R.H. (1996) Does Purchasing Power Parity Hold between Japan and Other Asian
Countries?, Journal of International Economic Studies, No. 10, 84-94.
13. Moosa, I.A. and Bhatti, R.H. (1996) Does Real Interest Parity Hold? Empirical Evidence from Asia, Keio
Economic Studies, 33, 63-70.
14. Bhatti, R.H. and Moosa, I.A. (1995) An Alternative Approach to Testing Uncovered Interest Parity, Applied
Economics Letters, 2, 478-481.
15. Moosa, I.A. and Bhatti, R.H. (1995) Testing Covered Interest Parity under Fisherian Expectations, Applied
Economics, 28, 71-74.
16. Bhatti, R.H. and Moosa, I.A. (1994) A New Approach to Testing Ex Ante Purchasing Power Parity", Applied
Economics Letters, 1, 148-151.
Supplementary Materials: to be assigned if needed
A calculator is required to perform the calculations.
Rules for Exams
1.
Place your bags and extra stuff on the designated area – my desk.
2.
3.
4.
5.
6.
7.
8.
9.
Come to Examination Room in time. If you come 10 minutes late, I will deduct 10 points
from your exam.
Switch off mobile phones, and car alarms. I will deduct 10 points if your mobile beeps
during any exam or a quiz.
Use your own calculator, not mobile phone. If you use mobile phone during the exam, I
might cancel your paper
The exam is closed book, closed-notes.
Don’t talk, look at others’ paper, if I catch you, I might cancel your paper.
Raise your hand if you have a question.
You must not leave classroom until exam ends.
I will not share your final exam with you in any case. Instead, I will submit your final
grade to the KIMEP administration directly. Therefore, you are advised to work hard
during the semester, see me and ask me for help if you have any problems, but do not
disturb me after your final exam.