BUS 425
International Finance Fall 2005-06
HACETTEPE UNIVERSITY
Department of Business Administration
BUS 425 International Finance
(Tuesday 12:40 – 15:30)
INSTRUCTOR:
Halit Gönenç, Ph.D., Associate Professor of Finance
Office: Department of Business Administration
E-Mail:
Office Hours: Tuesday 9:30 – 1:30 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 e-mail 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.
Fundamentals of Financial management
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.
PREREQUISITES: Better understanding will be accomplished if student took and passed Bus307 and Bus308.
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.
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 4 Chapter 1 (Financial Goals and Corporate Governance)
Week 2
Oct 11 Chapter 1 (Financial Goals and Corporate Governance)
Week 3
Oct 18 Chapter 2 (International Monetary System)
Week 4
Nov 25 Chapter 3 (The Balance of Payments) and Chapter 4 (The Foreign Exchange Market)
Week 5
Nov 01 Chapter 4 (The Foreign Exchange Market) or Holiday (Ramazan Bayramı)
Week 6
Nov 08 Chapter 4 (The Foreign Exchange Market)
Week 7
Nov 15 Midterm Exam
Week 8
Nov 29 Chapter 5 (Foreign Currency Derivatives – Foreign Currency Futures)
Week 9
Dec 06 Chapter 5 (Foreign Currency Derivatives – Foreign Currency Options)
Week 10
Dec 13 Chapter 6 International Parity Conditions and Foreign Exchange Rate Determination
Week 11
Dec 20 Chapter 8 (Transaction Exposure)
Week 12
Dec 27 Chapter 9 (Operating Exposure) and Chapter 10 (Accounting Exposure)
Week 13
Jan 03 Chapter 11 (Global Cost of Capital)
Chapter 14 (Interest Rate Exposure and Swaps)
Chapter 12 and 13 (Sourcing Equity and Debt Globally)
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.