Course description:

This course focuses on the international financial environment from the standpoint of financial managers. Emphasis will be placed on explanations of exchange rate behavior, capital movements, and financing international trade.

Course objectives:

Upon successful completion of this course, the student should be able to:

1) Explain the goals of the Multinational Corporation, along with the motives and risks of international business.

2) Describe relationships between exchange rates and economic variables, and explain the forces that influence these relationships.

3) Demonstrate how to measure a firm’s exposure to exchange rate movements and describe the various methods of hedging that exposure.

4) Describe the methods by which Multinational Corporations can finance international trade and explain the criteria used by Multinational Corporations to make financing decisions.

Textbook: International Financial Management (sixth edition). Madura, International Thomson Publishing, 2000.

Supplementary resources: International Financial Markets: Prices and Policies (first edition). Levich, Irwin-McGraw/Hill. Multinational Finance (first edition). Bulter, South-Western College Publishing. Readings from the Wall Street Journal.

1. To experience business communications within a company structure.
2. To work cooperatively and productively within the group environment.
3. To gain exposure to department/class members with different and, perhaps, opposing perspectives.

This course will consist of application of material, interconnection with students from other classes, group work, communication and collaborative working. Application of material means that there will be minimal class lecturing.

You are expected to have read the textbook before coming to class. You will be quizzed on the chapter readings on a regular basis. You will not be allowed to make-up any missed quizzes; however, the two lowest quiz grades will dropped when calculating your final grade. The material in the chapter will be discussed with the instructor and other class members and applied during each class through assigned department problems.

Group interaction will be the norm in the business simulation classes, just as in many real-life situations. This class relies on the concept of a community of learners where communication is open and informal, not only within your individual department, but also with the entire organization. Finally, collaborative learning means that at times you will have to "teach" other class members.

There will be assignments completed in class throughout the quarter. These assignments are designed to apply the course concepts to real life situations. Your participation in the completion of these assignments is essential if you are to receive full credit for them. All assignments must be accompanied by an assignment submission form (obtained from CEO).

Attendance is essential. In-class assignments require your presence. If you are not present for an in-class assignment or a quiz you will not be able to get credit for it.

Group Solution Reports/Cases 40%

Business Plan Presentation 20%

Peer Evaluations/Participation 20%

Quizzes 20%

90 - 100 = A

80 - 89 = B

70 - 79 = C

60 - 69 = D

below 60 F

These reports involve group completion of the assigned problems. The following formats may be requested:

1. Oral Report – Group discussion with the instructor.
2. Written Report – Must be typed. Contributions from each member, as well as the group’s conclusion must be presented.
3. Business Report – A formal report. Typed and double spaced.
4. Communications Record – Written list of other departments and people consulted.
5. Special – A specific result like a performance appraisal or price list.

The business simulation class, in a coordinated and unified effort, will present their company’s strategies and plans to members of the class, as well as to any outside observers at the end of the quarter. Each class will contribute according to their area of study/expertise. The management will give direction and guidance as the appropriate input from each class. Inputs to the business plan will be the result of group problem analysis complete throughout the quarter.

Each student’s individual contribution to the group and class objectives will be evaluated by the instructor. Teamwork skills, as well as individual growth, will also be monitored.

At the end of the quarter, each member of your specific class will evaluate your participation and performance. Each member’s score will be equally weighted and combined to give you a total peer evaluation.

In order to receive a passing grade, ALL work must be completed.

1 Multinational Financial Management: An Overview

International Flow of Funds

2 International Financial Markets

Exchange Rate Determination

3. Library Tour/Rearch

4 Government Influence on Exchange Rates

International Arbitrage and Interest Rate

5 Relationships Between Inflation, Interest Rates, and Exchange Rates

Forecasting Exchange Rates

6 Measuring Exposure to Exchange Rate Fluctuations

Managing Transaction Exposure

7 Managing Economic Exposure and Translation Exposure

8. Financing International Trade

9 Short-Term Financing

Long-Term Financing

10/11 International Cash Management

11/12 Business Plan Presentation