BUS 425
International Finance
Fall 2005-06
HACETTEPE UNIVERSITY
Department of Economics
ECO 431 International Finance
(Wednesday 12:40 – 15:30)
INSTRUCTOR:
Halit Gönenç, Ph.D., Associate Professor of Finance
Office: Department of Business Administration
E-Mail: halit.gonenc@hacettepe.edu.tr
Office Hours: Tuesday 9:30 – 12:00 or email for an appointment. I will be in my office on Monday-Friday
from 9:15-16:30 with a high probability, except at lunchtime and when I am teaching. I generally reply to email promptly.
Web Site: Http://yunus.hacettepe.edu.tr/~halit/
MATERIALS:
Required Text:
Multinational Business Finance by Eiteman, D.K., Stonehill, A.L., and Moffett, M.H., Addison
Wesley publishing company, 10th Edition.
Supplementary List:
International Financial Management by Madura, Jeff, 6th Edition, South Western.
Multinational Financial Management by Shapiro, Alan C., Allyn and Bacon.
Computational Finance: A Scientific Perspective by Cornelis A. Los, World Scientific.
Futures, Options, and Swaps by Kolb, Blackwell Publishing.
Options, Futures and other Derivatives by Hull, 5th Edition, Prentice Hall.
Para ve Döviz Piyasaları by Sadi Uzunoglu, 2nd Ed., Literatur.
Internet: A Web site has been developed for the course (Http://yunus.hacettepe.edu.tr/~halit/
Eco431.html). You find answers to homework and exam, related sites, and posted grades
available here.
COURSE CONTENT: Basic principal and subjects in international financial management. International
monetary system, foreign exchange markets (spot, forward, swap, and futures markets), international parity conditions,
foreign exchange options, foreign exchange risk management (hedging), global cost of capital, sourcing equity and
debt globally. Effects of foreign exchange risk on the value of the firm.
COURSE OBJECTIVES: The objective of this course is to contribute students to acquire and to demonstrate
knowledge of fundamental principles and issues in international finance management. At the end of semester,
students should be able to define basic terminology, state theoretical relationships and identify the key issues in
international financial management. Moreover, students should be able to demonstrate their comprehension by
describing important financial processes (i.e., the reaction of exchange rates in response to economic disturbances)
and by comparing alternative economic systems (i.e., exchange rate behavior in the short-run versus the long-run).
COURSE GRADE:
Mid Term Exam (40%)
Comprehensive Final Exam (60%)
Exams: Composed of multiple-choice questions.
CLASS POLICIES:
Attendance: Students are expected to attend every class and to bring the textbook to each class.
BUS 425
International Finance
Fall 2005-06
SUGGESTIONS FOR SUCCESS IN BUS425:
* In the past I have found it to be extremely helpful if students review their notes each day to make certain that
they understand the concepts and methodologies completely (i.e., review the logic behind each step when we are
covering problem oriented material).
* I urge students to utilize my office hours or use e-mail for questions they have. I am willing to help the student
who has made an honest attempt at the material. I have little or no time for the students who try to use my time as a
replacement for his/her own preparation time.
READING ASSIGNMENTS, HOMEWORK ASSIGNMENTS
Date
Reading Assignment to be Completed Prior to Class
Assignments (HW problems)_
Week 1
Oct 5
Introduction
Week 2
Oct 12
Chapter 1 (Financial Goals and Corporate Governance)
Week 3
Oct 19
Chapter 2 (International Monetary System)
Week 4
Oct 26
Chapter 3 (The Balance of Payments)
Week 5
Nov 02
Holiday (Ramazan Bayramı)
Week 6
Nov 09
Chapter 4 (The Foreign Exchange Market)
Week 7
Nov 16
Midterm Exam
Week 8
Nov 23
Chapter 5 (Foreign Currency Derivatives – Foreign Currency Futures)
Week 9
Nov 30
Chapter 5 (Foreign Currency Derivatives – Foreign Currency Options)
Week 10
Dec 7
Chapter 6 International Parity Conditions and Foreign Exchange Rate Determination
Week 11
Dec 14
Chapter 8 (Transaction Exposure)
Week 12
Dec 21
Chapter 9 (Operating Exposure) and Chapter 10 (Accounting Exposure)
Week 13
Dec 28
Chapter 11 (Global Cost of Capital) and Chapter 14 (Interest Rate Exposure and Swaps)
Week 14
Jan 04
Chapter 12 and 13 (Sourcing Equity and Debt Globally)
Week 15
Chapter 21 (Repositioning Funds )
FINAL EXAMINATION: January 16-29, 2006
* Please note this is a tentative schedule and changes may be necessary as the semester unfolds.