Course Syllabus International Finance Global MBA for the Americas Program Santiago, Chile Feb. 27 March 1, and March 20-22, 2014

Transcription

1 Course Syllabus International Finance Global MBA for the Americas Program Santiago, Chile Feb. 27 March 1, and March 20-22, 2014 Instructor: Bill Reese Office Phone: Course Overview The purpose of this course is to provide you with a solid understanding of the basic principles of international finance. Emphasis will be placed on understanding the roles of trade and exchange rates in the global economy as well as how individual firms can obtain financing, make capital budgeting decisions, and minimize risk in a global environment. The course will involve class lectures, and a number of to work on. Some of the will be done in groups, and some of them will be done individually. The final exam will be a takehome (open book) exam. Because we will be covering an entire semester s worth of material in six days, it is very important that students come to class well-prepared. Textbook International Financial Management 11 th edition by Jeff Madura

2 Cases MSDI Alcala de Henares, Spain Harvard case The Walt Disney Company s Yen Financing Harvard case Hedging Currency Risks at AIFS Harvard case Dozier Industries Harvard case F-163 The International Monetary Fund in Crisis Harvard case Carrefour S.A. Darden case UV0283 Foreign Exchange Hedging Strategies at General Motors: Transactional and Translational Exposures Harvard case R.J. Reynolds International Financing Harvard case Valuing a Cross-Border LBO: Bidding on the Yell Group Harvard case China s Renminbi: Our Currency, Your Problem? University of Hong Kong case HKU710 Class Website I will maintain a website for this class at On the website, I will include class notes, Excel spreadsheets, readings, and other important information. Please check the website for details and check back to the website for any updates. Grading Take-home exam 45% Case Assignments 50% Participation 5% Cases Everyone will need to read each case and be prepared to discuss it in class. For each case, there are questions posted on the class website that need to be answered. The Dozier, RJR, MSDI, and Disney are individual assignments. You are expected to do all four. Each student should turn in a hard copy of his/her answers to the questions (questions are on the class website) at the start of class on the due date. All work on these must be done on your own. I will call on some students to share their answers to some of the questions. Do not any of your work to me unless I specifically ask you to during class. The Yell, AIFS, GM, IMF, Renminbi, and Carrefour are group assignments. Students should divide themselves into the six groups listed below (with approximately the same number of students in each group) and work on these with the other members of their group. Each group will work on four of the six. You do not have to work on the other two.

3 Each group needs to be prepared to present its answers to the rest of the class with a PowerPoint presentation on the due date for each of their four. I will randomly select two of the four for each group to present. Each of the six will be presented twice. All group should be professionally presented to your classmates. Plan on approximately 45 minutes (including questions and answers) for your presentation (I am not strict about the length of the presentation; I am more interested in the quality of the presentation). You will not find out which two of your four will be chosen until the day of the presentation. Here are the each group will prepare to present: Group 1: AIFS, GM, Renminbi, and Carrefour Group 2: Yell, IMF, GM, and Carrefour Group 3: Yell, AIFS, IMF, and Renminbi Group 4: AIFS, GM, IMF, and Renminbi Group 5: Yell, GM, Renminbi, and Carrefour Group 6: Yell, AIFS, IMF, and Carrefour I do not care which students are in which group, as long as the size of each group is approximately the same. Class Format This course will consist of six (6) 5.5-hour classes. Each class meets from 8:00 am until 1:30 pm. The entire first two classes will be lecture format. During the third class, you will have time to begin working on either your individual or group. At the start of the fourth class, your individual will be due and we will spend most of the fourth class discussing them. Most of the fifth and sixth classes will consist of the student presentations of the group along with classroom discussion of the presentations. During the last hour of the last class, I will pass out the take-home exam and go over it with you. Please see the tentative schedule below for details about what will be covered during each class. Laptops You will need to bring laptops to class and have access to the internet so that we can work on some problems using excel. Students may only use their laptops for specific projects that we are working on as a class but may not use them for general web-surfing or ing during class. Prerequisites Prior to the start of this course, all students should have completed at least one course in statistics, one course in accounting, and one course in finance. Students will be expected to be familiar with the time value of money concepts, the basics of stocks and bonds, net present value, internal rate

4 of return, calculations of expected values, standard deviation, covariance, correlations, and the basics of linear regression. Attendance and Attentiveness Every student is expected to attend each class from start to finish. You are also expected to be attentive to what is going on during class. Cellphones may not be used during class for any purpose at all. We will have breaks during each class when you can check your , make phone calls, etc. Please plan to spend your in-class time focusing on what we are doing. Your participation grade will be based solely on your attendance and attentiveness not on how many questions you ask or answer during class.

5 Tentative Schedule Class First Thursday Material to be Covered during Class Overview International Trade Balance of Payments Exchange Rates Forward Rates Triangular Arbitrage Locational Arbitrage Purchasing Power Parity Readings to be Finished Prior to Class Chapters 1-8 Time to Work on These Cases During Class Cases Due at the Start of Class First Friday Exchange Rate Determination Forecasting Exchange Rates Hedging Transaction Exposure Currency Swaps Investing Globally Multinational Capital Budgeting Chapters 9-14 First Saturday Time to work on individual and group Any individual or group case Second Thursday Discuss all four individual All four individual Group if time permits Second Friday Second Saturday Six Group Case Presentations Six Group Case Presentations Discuss Take-Home Exam All six group All six group Group if time permits Be prepared to present any of your four group Be prepared to present any of your four group

6 Bill Reese Bio Bill grew up in Silver Spring, Maryland and graduated in 1978 from The College of Wooster in Wooster, Ohio with a BA in Speech. After working in the Cleveland area for four years as a high school teacher and wrestling coach, he earned his MBA from Virginia Tech with a concentration in Finance. Bill spent the next ten years working in the insurance and commercial banking industries before returning to school to obtain his Ph.D. in Finance from the University of Arizona. Bill has been a full-time finance professor at Tulane University s Freeman School of Business since August While at Tulane, he has taught in each of Tulane s programs: Undergraduate, Master of Finance, Full-time MBA, Global MBA, Professional MBA and Executive MBA. Bill has taught numerous finance courses for Tulane in Asia and South America as well as in the U.S. From , he worked for the National Football League as a personal finance instructor for the New Orleans Saints. He has received the EMBA Outstanding Teacher of the Year award, has been named to the MBA Teacher Honor Roll four times, has received the EMBA Teaching Excellence award five times, the PMBA Teaching Excellence award twice, and the Tulane Graduate Business Students voted to give him the Howard Wissner Award for Teaching Excellence in 2008 and He has had his research published in The Journal of Finance and The Journal of Financial Economics. He has received the All Star Paper Award from The Journal of Financial Economics. Bill is married and lives in Mandeville (on the northshore). His two daughters and their husbands all live in Dallas. There are no grandchildren yet. During his free time, Bill keeps involved with his church and some Bible Study groups. He has been an avid runner since 1990 and a triathlete since 2009, participating in road races and triathlons whenever he can. Bill earned All American status from USA Triathlon during the 2011 season and completed an Ironman Triathlon in May 2012.