INTERNATIONAL FINANCIAL MANAGEMENT

AGSM 658
Tuesday, 6:30 p.m. - 9:15: Mudd 301

Professor Fred Thompson

Office Hours: Monday and Wednesday, 1:20 p.m. - 3:30: Mudd 401, or by appointment

ex: 6228, home phone: 503-508-4229, fthompso@willamette.edu

 

This course provides a broad survey of the issues in international finance and of the institutions that shape it. The course pursues a central theme: how to take advantage of global capital markets to improve the delivery of goods and services. We will:

 
  • Identify and explore the major themes in international finance. Globalization has emerged as one of the touchstones of the 21st century, but capital access remains a problem for most people in most countries.
 
  • Examine the links between financial management and institutional arrangements.
 
  • Learn how to mitigate the financial and political risk associated with international operations.
 
  • Learn how to shop for advantageous financial terms across political jurisdictions.

The world of international financial management is often wildly varying. Students will have the chance to explore their own interests through specialization in management topics These efforts will culminate in presentations that students will deliver during the last third of the course.

 

Students are expected to attend all class sessions, to come to class having mastered the readings, and to participate fully in classroom discussions. The course grade will be determined as follows: 

 

Management presentation. Students will teach a class on a topic of their choosing. (30 percent). By February 15, students will submit a one-page description of the topic for the presentation. The presentation will take place on the date scheduled for the topic in question.

 

Homework(40 percent), Performance on homework and take home midterm will be evaluated primarily in terms of meeting due dates and completeness, neatness and accuracy also matter, but I am more concerned with seeing the logic of your analysis than a perfect book solution. Homework assignments will be graded "A," "OK" and no credit (which can be read as the functional equivalent of an F or zero credit). Late assignments will receive a maximum grade of OK; all other late papers will receive a grade of "C." PERMISSION TO TURN IN LATE AND MAKEUP ASSIGNMENTS MUST BE NEGOTIATED WITH THE TEACHER. Homework will be delivered and returned electronically via ClassTools as Excel or Word documents. Open GSM-653: Hand Ins; upload assignment to appropriate folder using no spaces in the document title. For example, if you were turning in a memo on options and derivatives, you would upload it to Section_1/_ as Options_and_derivatives.doc. ClassTools wiil automatically recognize the sender and log the date and time of submission.

 

Midterm examination. This is open to discussion, but the exam will presumably be a take home examination. (20 percent)

 

Contribution to class discussion. (10 percent)

 

Readings for the course will be available in three forms. We'll read most of the textbook. In addition, the course web page may contain additional readings. Finally, the syllabus links to supplemental readings on the Web.

 

Text: Click & Coval International Financial Management.

 

ASSIGNMENTS

Jan. 15. In class exercise Answer questions, see Foreign exchange converter. Answer questions (due Jan. 28) (10%).

Also see BEA Balance of Payments Accounts, Milken Institute View: Capital Access, World Bank, International Monetary Fund, World Trade Organization,

Jan. 22. Read Chapter 1 (pp. 1-38). Purchasing power parity.

Jan. 29. Read Chapters 1 & 2 (pp. 38-69). Answers to questions.

Feb. 5. Read Chapter 2 (pp. 69-100).

Feb. 12. Read Chapter 3. Answer questions (due Feb. 18) (10%).

Feb. 15. One-page description of the topic for class presentation due.

Feb. 19. Read Chapter 4 and Chapter 5. Theories of Direct Foreign Investment

Feb. 26. Read Chapter 6. Guest speaker: Dean Gardner, CFO, International Garden Products, Inc. Foreign Exchange Exposure Catechism

Mar 4. Read Chapter 7 and Chapter 8. Answer questions. (due Mar, 15) (10%). Translation and Transaction Exposure, lesson by Shweta Singal. and Analyzing Cash Flow Exposure, lessons by Emmanuel Holowatz on economic exposure and Peter Schonebaum (example) on Measuring Exposure.

How the sub-prime market works.

Mar 11. Black-Scholes. Guest speaker: Michael Canterbury, Vice President of Product Development, ESP

Mar. 18. Read chapter 9 Hedging with Swaps, lesson by John Rowe, Hedging with Foreign Currency Futures and Forwards and Hedging with Foreign Currency Options, lesson by Eli Waite.

March 25 SPRING BREAKl

April 1 (Midterm Take Home Due)

April 8. Read chapter 10 Risk Management Strategy, lessons by Tidarat Thanapakpawin (exercise) and Anh Nguyen. Answer questions. (due April 13) (10%).

April 15. Read chapter 11. Taxation, Transfer Pricing, and Debt Financing, International Tax Management(a) and International Tax Management(b). Guest speaker: Dr. Haixin Yao, Professor of Economics, Líaoning University.

April 22. Read chapter 12 Political Risk

April 29. Review

Any student eligible for and desiring academic accommodations due to a disability is requested to provide documentation to Disability Services located in the Bishop Wellness Center within the first two weeks of the semester.