BUSINESS SCHOOL

Unit of Study Outline

Unit Code FINC3011 Unit Title International Financial Management Semester 1, 2014
Pre-requisite Units: (FINC2012 or FINC2002) or (FINC2013 or FINC2003) or (FINC2014 or FINC2004) Co-requisite Units: Prohibited Units: FINC3001 Assumed Knowledge and/or Skills: Unit Coordinator: Tro Kortian Address: Room 411, The Business School Building(H69), Darlington NSW 2008 Email: tro.kortian@sydney.edu.au Phone: 93516450 Consultation Hours: Please go to Blackboard for details of all staff consultation times. Class Day(s): Please go to Blackboard for class times and locations Required Text / Resources: International Financial Management 2nd Edition , by Geert Bekaert and Robert Hodrick, Pearson Prentice Hall, 2012

This unit of study outline MUST be read in conjunction with The Business School Unit of Study Common Policy and implementation information that applies to every unit of study offered by the Business School (http://sydney.edu.au/business/currentstudents/policy). All assessment rules, such as standards used, penalties etc, are covered. The Business School Student Administration Manual - for information about all processes such as illness, appeals etc ( http://sydney.edu.au/business/currentstudents/student_information/student_administration_manual) When deciding applications and appeals relating to these matters it will be assumed that every student has taken the time to familiarise themselves with these key policies and procedures. The Business School seeks feedback from students and staff in order to continually improve all units offered. For information on previously collected feedback and innovations made in response to this feedback, please see http://sydney.edu.au/business/learning/planning_and_quality/feedback/student

1. Unit of Study Information Markets are increasingly globalised. There are very few businesses or industries that are not required to deal with issues such as foreign currency, foreign competition and direct investment. This unit is designed to allow students to extend their understanding of basic principles in finance to an international environment. Globalisation of markets introduces risks but also opens up profitable opportunities. Topics covered include: foreign currency valuation and markets; international parity conditions; measuring and managing foreign exposure; international portfolio management; capital budgeting and foreign direct investment; international tax management and international financing strategy.

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2. Program Learning Outcomes and Unit Learning Outcomes The Program Learning Outcomes for this Program are located at http://sydney.edu.au/business/learning/staff/leadership/program_directors/outcomes Unit Learning Outcomes Unit Learning Outcomes On the successful completion of the Unit you should be able to: Explain and identify the risks as well as the opportunities that underpin the financial operations of business firms operating in an environment of open and integrated financial markets

Program Learning Outcomes

1. Business Knowledge 2. Critical Thinking 3. Business Analysis and Problem-Solving Apply basic exchange rate concepts to foreign exchange markets as well 1. Business Knowledge as describe and explain how the foreign exchange market is organized and 2. Critical Thinking operates. 3. Business Analysis and Problem-Solving Explain and effectively apply the concepts of arbitrage and speculation in 1. Business Knowledge international financial markets. 2. Critical Thinking 3. Business Analysis and Problem-Solving Explain and effectively apply, fundamental international parity conditions 2. Critical Thinking such as Purchasing Power Parity and Covered and Uncovered Interest 3. Business Analysis and Parity. Problem-Solving Explain how currency derivative contracts such as futures, forwards, swaps 1. Business Knowledge and options can be used 2. Critical Thinking to hedge and speculate based on anticipated exchange rate movements. 3. Business Analysis and Problem-Solving Recognise and explain the different forms of foreign exchange exposure 1. Business Knowledge that a business enterprise may confront as well describe and demonstrate 2. Critical Thinking how such different exposures can be managed. 3. Business Analysis and Problem-Solving Explain why domestic firms may wish to indulge in foreign currency 1. Business Knowledge financing and investment as well 2. Critical Thinking as comprehend how the choice is made between domestic currency and 3. Business Analysis and foreign currency financing Problem-Solving and investment decisions.

3. Assessment
Individual/ Assessment Group Conditions Individual Individual Individual Individual Compulsory Compulsory Compulsory Compulsory Program Learning Outcomes Assessed 1, 2, 3 1, 2, 3 1, 2, 3 1, 2, 3

Assessment Name Semester Test 1 Semester Test 2 Tutorial Participation Final Exam Academic Honesty

Length Weight Due Date n/a n/a n/a n/a 20% 20% 10% 50% 05-Apr-2014 10-May-2014 N/A N/A Week 4

Closing Date 05-Apr-2014 10-May-2014 N/A N/A

For the meaning and operation of this table, see policy information in the box on the front page or click here

Assessment details Semester Test 1

G

Task Description Semester Test 1 will be held outside the regular lecture sessions at the end of Week 5. Specific details

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regarding the date, time and venue for the test will be posted on Blackboard when finalised. Semester Test 1 will be a closed-book, multiple-choice format test, and will examine your familiarity and comprehension of the issues and analytical concepts covered in Weeks 1 to 4 inclusive. All lecture and tutorial material covering these sessions will be examinable. Note that this material will also be examined in the Final Exam.
G

Assessment Criteria 1. Use of literature/ Knowledge of theory 2. Conclusions 3. Analysis 4. Problem solving 5. Rationale 6. Conceptualisation 7. Critical reasoning / critical thinking

Feedback - What, when and how feedback will be provided for this assessment Individual students will be able to receive feedback on Test 1 via the following two measures: 1 Solutions to all of the test questions will be provided and discussed in tutorials. 2 Students will have the opportunity to look over and discuss their individual answers to the test.

Semester Test 2
G

Task Description Semester Test 2 will be held outside the regular lecture sessions at the end of Week 9. Specific details regarding the date, time and venue for the test will be posted on Blackboard when finalised. Semester Test 2 will be a closed-book, multiple-choice format test, and will examine your familiarity and comprehension of the issues and analytical concepts covered in Weeks 5 to 8 inclusive. All lecture and tutorial material covering these sessions will be examinable. Note that this material will also be examined in the Final Exam. Assessment Criteria 1. Use of literature/ Knowledge of theory 2. Conclusions 3. Analysis 4. Problem solving 5. Rationale 6. Conceptualisation 7. Critical reasoning / critical thinking

Feedback - What, when and how feedback will be provided for this assessment Individual students will be able to receive feedback on Test 2 via the following two measures: 1 Solutions to all of the test questions will be provided and discussed in tutorials. 2 Students will have the opportunity to look over and discuss their individual answers to the test.

Tutorial Participation
G

Task Description Tutorials are intended as active collaborative learning experiences where your informed input will be both expected and supported. Tutors will emphasise as well as demonstrate that marks that are awarded will be for more than mere attendance of tutorials. The tutorial will be an opportunity for you to develop skills and understand the relevance of the concepts introduced each week in lectures. Assigned work will be randomly collected four times over the semester by your tutor to gauge your level of understanding as well as in determination of your overall tutorial participation mark.

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Assessment Criteria 1. Use of literature/ Knowledge of theory 2. Conclusions 3. Analysis 4. Problem solving 5. Rationale 6. Conceptualisation 7. Critical reasoning / critical thinking

Feedback - What, when and how feedback will be provided for this assessment Students will be given feedback in accordance with their assessed preparation and contribution/involvement in the tutorial discussion.

Final Exam
G

Task Description The final exam will be held during the University Examination period with the date, time, and location to be advised by the Examinations Centre. The exam will be three (3) hours, closed-book exam, plus an additional ten (10) minutes reading time only. It will account for 50% of your final mark. The final exam may comprise of a combination of multiple choice, short answer, problem solving and discussion questions. It will cover all material included in the unit of study.

Assessment Criteria 1. Conforming with instructions (e.g. word length, font, other instructions) 2. Clarity of expression (incl. accuracy, spelling, grammar, punctuation) 3. Use of literature/ Knowledge of theory 4. Conclusions 5. Analysis 6. Problem solving 7. Rationale 8. Conceptualisation 9. Critical reasoning / critical thinking 10. Synthesis

Feedback - What, when and how feedback will be provided for this assessment Feedback will be provided to students regarding their Final Examination via Final Exam Review sessions that are scheduled by the Discipline after the examination period has ended.

4. Other Resources for Students All lectures and seminars are recorded and will be available within Blackboard for student use. Please note the Business School does not own the system and cannot guarantee that the system will operate or that every class will be recorded. Students should ensure they attend and participate in all classes.

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5. Unit Schedule Week 1 3 Mar 2014 2 10 Mar 2014 3 17 Mar 2014 4 24 Mar 2014 5 31 Mar 2014 6 7 Apr 2014 Required Reading(s) B&H Ch.2 Lecture Introduction FX Markets & Exchange Rates - I FX Markets & Exchange Rates - I FX Markets & Exchange Rates - II Assessments Due

B&H Ch.2, Ch.3 (section 3.4 & 3.5), B&H: Ch. 6 (section 6.1, 6.2, International Parity Conditions I 6.3) & Ch.7 B&H: Ch. 8 & Ch. 10 International Parity Conditions II (section 10.1) Currency Derivatives - I: Currency futures & B&H: Ch. 20 options Currency Derivatives - II: Interest rate and B&H: Ch. 21 Foreign Currency swaps B&H: Ch. 17; Ch. 3 (sections 3.1, 3.2 & 7 Risk management and foreign currency 3.3); 14 Apr 2014 hedging - I Ch. 6 (section 6.4) Ch.20 (sections 20.2 & 20.4) Common week 21 Apr to 27 Apr B&H: Ch. 17; Ch. 3 (sections 3.1, 3.2 & 8 Risk management and foreign currency 3.3); 28 Apr 2014 hedging - II Ch. 6 (section 6.4) Ch.20 (sections 20.2 & 20.4) 9 B&H: Ch. 9 Measuring and managing real exchange risk 5 May 2014 10 B&H: Ch. 11 & Ch. 12 International Debt & Equity Financing 12 May 2014 11 B&H: Ch. 13 International Capital Market Equilibrium 19 May 2014 12 B&H: Ch. 14 Political and Country Risk Analysis 26 May 2014 13 Course Summary & Final Review 2 Jun 2014

Semester Test 1

Semester Test 2

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