Oregon State University

Oregon State University Home Page

BA 545 - International Financial Management

Spring 2007

Instructor: Jimmy Yang

Office: Bexell 418C

Phone: 541-737-6005

E-mail: jimmy.yang@bus.oregonstate.edu

Office hours:  Monday 9:00-10:00, Tuesday 2:00pm-3:00pm and Wednesday 2:30pm- 3:30pm and by appointment

Course credits: 4 credit hours, course meets 12:00pm-1:50pm on Mondays and Wednesdays (section 001), 10:00am-11:50am on Tuesdays and Thursdays (section 002), and 4:00pm-5:50pm on Mondays and Wednesdays (section 003)

Prerequisites: BA340 (Finance), BA347 (International Business), and BA440 (Corporate Finance) or ECON440 (International Trade and Policy).

 

Blackboard: Please login with your ONID username and password to your Blackboard account through the following website. https://my.oregonstate.edu/webapps/login My announcements and class materials will be posted on the Blackboard.  You are all encouraged to utilize this system to post your questions, discuss class-related issues, or communicate with your group, the whole class or me.  

 

Learning Resources:

  1. Required textbook: Moffett, Stonehill, and Eiteman, Fundamentals of Multinational Finance, Second Edition, Pearson Education, 2006.
  2. Required tool: Financial Calculator (Texas Instruments BA II Plus or an equivalent)

 

Course Objectives: The goal of this course is to teach students how to be effective global financial managers.  To achieve this goal, the course focuses on important topics that include the fundamentals of the macroeconomic environment of international financial management, the financial environment in which the multinational firm and its managers must function, and the foreign exchange management and financial management in a multinational firm.

 

Measurable Student Learning Outcomes: Upon completion of this course, students should be able to:

  • Understand the global financial environment and the globalization process experienced by multinational corporations.
  • Identify the basic factors affecting exchange rates in a floating exchange rate system and describe the five key theoretical relationships among spot exchange rates, forward exchange rates, inflation rates, and interest rates that result from international arbitrage activities. 
  • Distinguish the three major foreign exchange exposures experienced by multinational corporations, analyze the pros and cons of hedging foreign exchange transaction exposure, and evaluate strategic alternatives to managing these exposures. 
  • Demonstrate how a firm can use the global capital market to minimize its cost of capital and maximize its access to capital.
  • Define interest rate risk and demonstrate how it can be managed by various financial instruments, namely forward rate agreements, interest rate futures and options, and interest rate swaps.
  • Demonstrate why firms transition from the international trade stage to become full-blown multinational corporations, how they choose where to locate, and how they determine their modes of foreign investment. 

 

Assignments: Textbook practice problems and some other assignments, perhaps covering materials not covered in the text, will be given in class or posted on the Blackboard.  Assignments will NOT be collected.  Answers will be available on the Blackboard one week after assignments are posted.  You are encouraged to collaborate when doing the assignments.

 

Evaluation of Student Performance:

  • Group Project: Detailed description of the group project will be posted on the Blackboard during the second week of the term. 
  • Exams: Two exams will be given.  If you miss any exam without prior permission, a grade of zero will be given for that exam.  It is your responsibility to schedule a make-up exam within one week after the scheduled exam.   
  • Grade Determination:                                                          

Written group project                                       20%                

Group project presentation                               10%                

Exam #1                                                           30%                

Exam #2                                                           30%                

Case or project                                                10%                                                                                      

 

Statement Regarding Students with Disabilities: Accommodations are collaborative efforts between students, faculty and Services for Students with Disabilities (SSD). Students with accommodations approved through SSD are responsible for contacting the faculty member in charge of the course prior to or during the first week of the term to discuss accommodations. Students who believe they are eligible for accommodations but who have not yet obtained approval through SSD should contact SSD immediately at 737-4098.

 

Link to Statement of Expectations for Student Conduct: i.e., cheating policies http://oregonstate.edu/admin/stucon/achon.htm


Tentative Schedule: (the dates are for sections 001 and 003, please adjust the dates for section 002)

 

Date

Topic

Chapter(s)

Apr      2

Introduction

1

Apr      4

Balance of Payments

3

Apr      9

International Parity (1)

4

Apr    11

International Parity (2)

4

Apr    16

Foreign Exchange Rate

2, 5

Apr    18

Foreign Exchange Market

6

Apr    23

Transaction Exposure

8

Apr    25

Operating Exposure

9

Apr    30

Translation Exposure

10

May     2

Exam #1 (group midterm)

Time and room TBA

May     7

Global Cost of Capital

11

May     9

Raising Global Capital

12, 13

May   14

Foreign Direct Investment

16, 17

May   16

Hedging (1)

14

May   21

Hedging (2)

 7

May   23

Cross-Border M&A

Web Chapter

May   28

Memorial Day

Holiday

May   30

Exam #2 (group midterm)

Time and room TBA

Jun      4

Presentation (1)

Group Project

Jun      6 

Presentation (2)

Group Project

Jun    11

Written group project due at 4 PM