College of Business
Southern Illinois University
FIN 464/BA 582: International Finance
Spring Semester 2014
Dr. Jason Greene
Professor of Finance
Office: Department of Finance, Rehn 138A
Office Phone: 618-453-1421
E-mail: jgreene@business.siu.edu
Class meetings: Rehn 13, Tuesday and Thursday, 11:00 AM – 12:15 PM
Office Hours:
Tuesday 2:00 PM – 3:00 PM;
Wednesday 1:30 PM – 3:30 PM;
and by appointment
Course Objectives
To examine decision-making in International Finance via a broad study of the opportunities and problems
encountered when investments and business operations span national boundaries. Emphasis will be placed on how
conventional financial models require modification in a global context, and on the use of international financial markets to
enhance portfolio performance, control risks and maximize firm value. Specific topics include foreign exchange markets,
international parity conditions and exchange rates, exchange rate exposure and hedging, global capital sourcing, multinational
capital budgeting, working capital management, and international portfolio diversification.
Prerequisites: FIN 361 or BA 530
Expectations
I expect you to attend all class meetings. It is in your best interest to have read the appropriate text material before the
class in which the topic is discussed. While this course is primarily lecture format, I encourage you to ask questions and
contribute constructive comments during class. Finance is a subject that cannot be learned passively. You must read, study, and
actively practice the subject outside of class.
I expect you to keep up with assigned practice problems on a regular basis. You will not be successful in this course if
you put off reading and practice problems until a day or two before the exam. I welcome questions about the practice problems
during class and during office hours. Given that I expect you to work practice problems at the time they are assigned, I am
unlikely to be very helpful on practice problems on the day before or day of the exam. Your success on the exams will be highly
correlated with your out-of-class preparation and work on practice problems.
Grading
Your final grade will be based on the following weights.
Exams
54%
Bloomberg Homework
14%
Written Project
14%
Final Exam
18%
Extra Credit
See Bloomberg under Required Skills
Exams are not deliberately cumulative. To the extent that material from prior quizzes or exams is pertinent to the topic
at hand, it is expected that you are prepared for that questions relating to that material. The final exam is comprehensive.
Graduate students enrolled in BA 582 will have additional questions associated with most assignments. I reserve the right to
give unannounced (i.e., “pop”) quizzes that will count toward the exam portion of the grade. I am more likely to give pop
quizzes when I perceive that students are not keeping up with the assigned readings and practice problems. No other extra
credit opportunities exist beyond those spelled out herein.
Make-up Policy
No make-up exams will be given. If you miss a quiz or an exam for an excused absence, the weight for that assignment
will be equally distributed across remaining future exams. Everyone must take the final exam.
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Required Skills
MS Office: This course will build on general skills you should have acquired individually or through other courses. In particular,
to survive in the modern business world, working knowledge of the computer (Internet, spreadsheets, word processing, etc.) is
essential and will be used in this course.
Bloomberg: I require you to complete certain assignments using Bloomberg. In many cases, you will need to access Bloomberg
in order to do research and/or collect data in order to answer specific questions. I will demonstrate some functions of
Bloomberg in class. However, it is up to you to create your own Bloomberg login and to learn how to use the Bloomberg
system. Bloomberg is available on 7 terminals in Rehn 326 (trading room) and on two terminals in the Finance Department
office. The Finance Department terminals may be accessed during regular business hours and the terminals in Rehn 326 may be
accessed whenever there is no class in that room. You may obtain a key fob from me that will allow you to access Rehn Hall
and Rehn 326 at any time.
Extra Credit: To provide you with an extra incentive to become fluent with the Bloomberg system, you may earn extra credit as
follows: 1% extra credit by passing the Core Exam for the Bloomberg Core Videos found in the Online Training area of
Bloomberg University (BU <GO>); and 0.25% extra credit for each Bloomberg Market Sector exam that you pass, up to 4.
Extra credit is only awarded if you provide me with proof of certifications by the last day of class.
Required Materials
Text: Multinational Business Finance (13th edition) by Eiteman, Stonehill Moffett.
Calculator: Each student is required to have and be proficient at using a financial calculator (one in which you can quickly
calculate bond prices and yields, present values, etc.). Examples of suitable financial calculators are the HP 17B, HP 10B, or the
TI BAII Plus. Tutorials on the use of the TI BAII Plus are available online. Bring your calculator to every class meeting and use
it to work through lecture examples.
Course Web Site
This course utilizes SIU Online (D2L) extensively. The lecture note files, assignments, solutions to selected problems,
and other relevant materials are located there. You are expected to regularly (e.g., about once per day) check this course using
SIU Online for any announcements, assignments, etc. You will need your SIU network ID and password to access SIU Online
at https://online.siu.edu.
Office Visits
I am not available for office visits in the hour before class. My office hours are reserved to be available to you. I also
welcome you to drop by, call, or e-mail if you have questions about the course. If it is not during my office hours, I am happy to
meet with you if I am not busy with another commitment. If you need to meet at a time outside my office hours, I’m generally
happy to do so; but I suggest e-mailing or calling to make sure that I am available or to arrange a mutually agreeable time.
Academic Dishonesty
Students found guilty of committing acts of academic dishonesty will receive an “F” in the course and face possible
suspension from SIU. Examples of academic dishonesty include, but are not limited to: obtaining exams illegally, possession of
exams from previous semesters that have not been released by the department, plagiarism, talking to others during an exam, and
looking at others’ exam papers.
Other Administrative Details
 You are responsible for knowledge of any administrative announcements (e.g., quiz or exam information, schedule and/or
assignment changes) made any time during scheduled class periods, regardless of whether or not you are in attendance.
 It is your responsibility to check the appropriate sources to establish the last day to drop the course.
 Proper etiquette dictates that you disable the audible signals on any electronic devices that you bring to class, such as cell
phones, pagers, watches, etc. and that you refrain from using these devices during class.
 Texting, use of e-mail, or any web surfing is not permitted during class. Anyone violating this rule will be asked to leave the
classroom immediately for an unexcused absence.
Please refer to the following link for important information about University schedules, policies, and procedures:
http://pvcaa.siu.edu/_common/documents/Syllabus_Attachment.pdf
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FIN 464/BA 582: International Finance
Spring Semester 2014
Tentative Schedule
The course outline is only tentative. Depending upon our progress, some topics may be covered in greater depth and
for longer periods, some topics may be given less coverage and less time, and some topics may be dropped altogether. In other
words, the course syllabus provides a general plan for the course; deviations may be necessary. Chapters are from Multinational
Business Finance 13th edition, by Eiteman, Stonehill, and Moffett.
Date
Topic
Chapter
1/14
1/16
Course Introduction and the Global Financial Environment
Corporate Governance
1
2
1/21
1/23
International Monetary System
Balance of Payments
3
4
1/28
1/30
Currency Exchange and FX Markets
Currency Exchange and FX Markets
6
2/4
2/6
Parity Conditions
Parity Conditions
7
2/11
2/13
Exam #1
FX Derivatives
2/18
2/20
Transaction Exposure
Transaction Exposure
10
2/25
2/27
Operating Exposure
Operating Exposure
12
3/4
3/6
Operating Exposure
Exam #2
3/11
3/13
No Class – Spring Break
No Class – Spring Break
3/18
3/20
Cost of Capital
Sourcing Equity Globally
13
14
3/25
3/27
Foreign Direct Investment
Foreign Direct Investment
17
4/1
4/3
Multinational Capital Budgeting
Multinational Capital Budgeting
18
4/8
4/10
Multinational Capital Budgeting
Exam #3
4/15
4/17
International Portfolio Theory and Diversification
International Portfolio Theory and Diversification
4/22
4/24
International Portfolio Theory and Diversification
International Portfolio Theory and Diversification
4/39
5/1
International Portfolio Theory and Diversification
Written Project Due
5/5
Final Exam – 12:50 PM
8
3
16