INBU 4200 -- INTERNATIONAL FINANCIAL MANAGEMENT



INBU 4200 -- INTERNATIONAL FINANCIAL MANAGEMENT

SPRING SEMESTER 2007 – LEEDS SCHOOL OF BUSINESS

SECTION 001 TTR 11:00 – 12:15; ROOM: FLEMING LAW 103

Professor Michael Palmer

Office Phone: (303) 492-4241

E-Mail: Michael.Palmer@Colorado.EDU

COURSE DESCRIPTION:

INBU 4200 (International Financial Management) will explore many of the financial issues confronting managers of today’s global firms. The course will focus on the unique “international” financial environments and associated risks that confront global firms and the strategies managers use for dealing with these environments and risks. The course will also monitor current events in the area of international financial markets during the semester through various web sites and the financial press.

COURSE TOPICS:

1) Globalization Process and Relationship to the International Finance Function

The globalization of consumption, production and finance (including financial markets)

The implications of financial market globalization

The International Monetary System (Gold Standard to post Bretton Woods)

Exchange rates regimes (impact on the determination of exchange rates)

Corporate objectives and governance in a global setting (cultural impacts)

2) Foreign Exchange Exposure: Risk, Measurement and Management

The types of foreign exchange exposure facing firms and resulting risk for these firms

Foreign exchange (exposure) risk management techniques

Operational strategies appropriate for the global firm

Using financial market contracts to manage risks

Forward, future, money market, and options contracts

3) International Money and Capital Markets

The short/intermediate term international money markets

Global commercial banking markets

Eurocurrency markets

Foreign exchange markets (including forecasting exchange rates)

Types of foreign exchange quotes and types of contracts

Long term international debt markets (foreign debt markets and euro-debt markets)

Internationalization of equity markets (cross listings of corporate equity)

Offshore financial centers

4) Foreign Market Entry Modes for Global Firms

Exporting, Importing, and Licensing

Foreign Direct Investment (FDI)

Wholly owned subsidiaries and Joint Ventures

Cross Border Mergers and Acquisitions

Capital structure issues

Country differences in capital structures (i.e., the use of debt and equity)

Cost of capital implications for the global firm

REQUIRED TEXT:

International Financial Management, by Eun and Resnick, Irwin, 4TH edition, 2007

SUGGESTED READINGS: FINANCIAL PRESS:

It is strongly suggested that you read either the Wall Street Journal or the Financial Times on a regular basis as either will help to keep you current on international financial market and international business issues. Please note that limited copies of the Wall Street Journal are available near the reception desk on the first floor.

OFFICE INFORMATION:

Office:   502 in Fleming Law School

Phone:  303-492-4241 (please leave message if I’m not there)

E-Mail: michael.palmer@colorado.edu

Office hours: Tuesday and Thursday right after class until 1:45 and by appointment.  

COURSE SCHEDULE:

Week 1: Chapter 1: Globalization and the Multinational Firm

Week 2: Chapter 2: The International Monetary System

Week 3: Chapters 2 and 3; Balance of Payments

Week 4: Chapter 4: Corporate Governance around the World

Week 4: Tuesday, February 6th: Quiz 1 (Text chapters, handouts, and lectures to date).

Week 5: Chapter 5: The Market for Foreign Exchange

Week 6: Chapter 6: International Parity Relationships and Forecasting Foreign Exchange Rates

Week 7: Chapter 6: International Parity Relationships and Forecasting Foreign Exchange Rates

Week 7: Tuesday, February 27th, Quiz 2 (Text chapters, handouts, and lectures to date).

Week 8: Chapter 8: Management of Transaction Exposure

Week 9: Chapters 9 and 10: Management of Economic and Translation Exposure

Week 9: Thursday, March 15th, Mid-Term Exam

Week 10: Chapter 11: International Banking and Money Markets

Week 11: NO CLASSES; SPRING BREAK

Week 12: Chapters 12 and 13: International Bond Markets and international Equity Markets

Week 13: Chapter 15: International Portfolio Management

Week 13: Tuesday, April 10th, Quiz 3 (Text chapters, handouts, and lectures to date)

Week 14: Chapter 16: Foreign Direct Investment and Cross-Border Acquisitions

Week 15: Chapter 17: International Capital Structure and Cost of Capital

Week 16: Tuesday, May 1st, Quiz 4 (Text chapters, handouts, and lectures to date)

Final Exam: Saturday, May 5th, 1:30 to 4:00

Note: Above chapter and lecture schedule is subject to change based on the pace of this semester’s work. Quiz and exam dates will not be changed.

OTHER IMPORTANT DATES:

Wednesday, January 31: Deadline for dropping course without professor’s signature.

Wednesday, February 28th: Deadline for dropping course without Dean’s signature.

For more information on this deadline and others please see:



QUIZZES AND EXAMINATIONS:

INBU 4000 test schedule will consist of the following:

1) Four quizzes given approximately every third week on dates noted. These quizzes will cover daily lectures (including power point slides), text chapters, assigned readings (on my web site), and any class handouts and will not be cumulative. Quizzes may include true/false, multiple choice, definitions, calculations, and short essay questions. These quizzes are designed to keep you current with the course material. Make up quizzes will not be offered. Please make every effort to meet this quiz schedule (if you have a conflict with this schedule please see me as soon as possible).

2) Two Exams; a mid term and a final exam: (consisting of true/false, multiple choice questions, calculation questions, and short essay questions from the lecture material and the text. These exams will be cumulative with regards to lecture material but not with regard to text material. Exams will be given only on the days indicate. Make up exams will not be offered. Please make every effort to meet this exam schedule (if you have a conflict with this exam schedule please see me as soon as possible).

3) Note: Absences from quizzes or exams due to documented medical reasons will be handled on an individual basis.

4) Pop quizzes (for extra credit) will also be given during the semester. The number of pop quizzes will vary depending upon course circumstances. In the past, they have ranged between 2 and 4. Under no circumstances can a missed pop quiz be made up.

ASSIGNED READINGS:

Throughout the semester, articles will be posted on my University of Colorado home page under this course. I will normally announce these shortly after posting (generally the day of), but please be aware that you are responsible for checking my course home page on a regular basis to see if new material has been posted.

HOME PAGE LECTURE NOTES AND ASSIGNED READINGS:

Power point lecture slides and assigned reading will be available on my CU home page:



Link to “Current Courses,” and then to Power Point Lecture Slides (Spring 2007).

I will also post other information on this site, such as answer keys to worksheets and exams.

COURSE GRADES:

INBU 4200 final course grades will be based on the following:

Points Percent of Total

1) Four quizzes (30 points each) 120 points 30.00%

2) Mid term Exam 100 points 25.00%

3) Final Exam 140 points 35.00%

4) On time attendance (20 days @ 2 points each) 40 points 10.00%

Total Possible Course Points 400 points

FINAL LETTER GRADES:

Based upon 400 possible points for the course, final letter grades will be determined as follows:

A = 90% (400 to 360 points)

B = 80% (359 to 320 points)

C = 70% (319 to 280 points)

D = 60% (279 to 240 points)

F = (239 and below)

ATTENDANCE EXPECTATION FOR THIS CLASS:

I require that you do not leave the classroom in the middle of a lecture. Please prepare yourself for this expectation.

ATTENDANCE POLICY AND ATTENDANCE GRADE:

Attendance will be taken on other than the four quiz days and on the mid term day; there are 22 of these during the semester (beginning on the first attendance day, Thursday, January 25th, ending on the last attendance day, Thursday, May 3rd). You are entitled to two absences (unexcused) bringing the total non-quiz and non-major exam days to twenty. Sign in sheets will be used to take attendance. Note: Late attendance counts as non-attendance. Note: Attending all 22 classes, will result in 4 extra credit points.

All students will be provided with name cards by the end of the first week of class. Please be responsible for these and bring them to class with you on a daily basis

EMAILING THE CLASS

Please check your email on a regular basis for class updates from me. Occasionally, I will email the class information about upcoming quizzes or exams, or information about new postings to my web site. I might also email you a breaking article pertinent to our class discussion.

COURSE LEARNING OBJECTIVES:

1. To develop an understanding and appreciation of the critical financial issues facing managers of international firms in today’s increasingly globalized world.

2. To develop a practical framework for the analysis of exchange rates and foreign exchange exposures including an understanding of forces affecting exchange rates, possible models and approaches for forecasting exchange rates, and techniques for managing various types of foreign exchange exposures.

3. To develop students’ understanding of current issues and use of relevant data in the area of international finance through regular readings and discussions of articles in the financial press and through the use of appropriate on-line web sites.

THE 2007 LONDON SEMINAR IN INTERNATIONAL FINANCE AND BUSINESS:

Those of you interested in the summer 2007 London Seminar in International Finance and Business please refer to the London Seminar site on my home page () under “Current Courses.” From this site you can also view the 2006 program itinerary.

The 2007 program will run from Monday, July 9th through Friday August 10th (The “B” summer session).

The London seminar is designed to cover a wide range of international and Europe based financial, economic, business, and political issues. The 5 week seminar is taught by a variety of guest speakers, primarily from industry, and includes various site visits to companies and financial institutions and markets. Approximately 4 weeks will be spent in London and 1 week in Paris.

During the five weeks, students will be housed in townhouses (flats) in London and in a hotel while in Paris.

The seminar is limited to 24 students and results in 6 hours of finance credit (students should check with their advisors to see how this course will work into their degree program). The course also counts towards the International Certificate Program. Students are accepted into the seminar on a rolling basis until 24 have been admitted. Applications for the 2007 program are now being accepted and are available from the University’s Study Abroad office

Scholarship funds are available for accepted students to this seminar from both the Study Abroad Office and the Leeds School of Business.

For more information about this course, please see me or visit my web site. Information is also available from the advisors in the Study Abroad Office.

STATEMENTS REQUIRED/RECOMMENDED BY THE OFFICE OF UNDERGRADUATE EDUCATION:

(1)   If you qualify for accommodations because of a disability, please submit to me a letter from Disability Services in a timely manner so that your needs may be addressed.  Disability Services determines accommodations based on documented disabilities.  Contact: 303-492-8671, Willard 322, and Colorado.EDU/disabilityservices. Disability Services' letters for students with disabilities indicate legally mandated reasonable accommodations.  The syllabus statements and answers to Frequently Asked Questions can be found at colorado.edu/disabilityservices.

(2) Campus policy regarding religious observances requires that faculty make every effort to reasonably and fairly deal with all students who, because of religious obligations, have conflicts with scheduled exams, assignments or required attendance.  Please call to my attention any religious observances which will conflict with assigned work, including, but not limited to, scheduled exams.

(3)  Students and faculty each have responsibility for maintaining an appropriate learning environment. Students who fail to adhere to such behavioral standards may be subject to discipline. Faculty has the professional responsibility to treat all students with understanding, dignity and respect, to guide classroom discussion and to set reasonable limits on the manner in which they and their students express opinions.  Professional courtesy and sensitivity are

especially important with respect to individuals and topics dealing with differences of race, culture, religion, politics, sexual orientation, gender variance, and nationalities.  Class rosters are provided to the instructor with the student's legal name. I will gladly honor your request to address you by an alternate name or gender pronoun. Please advise me of this preference early in the semester so that I may make appropriate changes to my records.  See polices

at:   and at



Campus "Classroom Behavior" policy describes examples of unacceptable classroom behavior. Please see  

(4)   The University of Colorado at Boulder policy on Discrimination and Harassment

(, the University of Colorado policy on Sexual Harassment and the University of Colorado policy on Amorous Relationships applies to all students, staff and faculty.  Any student, staff or faculty member who believes s/he has been the subject of discrimination or harassment based upon race, color, national origin, sex, age,

disability, religion, sexual orientation, or veteran status should contact the Office of Discrimination and Harassment (ODH) at 303-492-2127 or the Office of Judicial Affairs at 303-492-5550.  Information about the ODH and the campus resources available to assist individuals regarding discrimination or harassment can be obtained at  

(5)   All students of the University of Colorado at Boulder are responsible for knowing and adhering to the academic integrity policy of this institution. Violations of this policy may include: cheating, plagiarism, aid of academic dishonesty, fabrication, lying, bribery, and threatening behavior.  All incidents of academic misconduct shall be reported to the Honor Code Council

(honor@colorado.edu; 303-725-2273). Students who are found to be in violation of the academic integrity policy will be subject to both academic sanctions from the faculty member and non-academic sanctions (including but not limited to university probation, suspension, or expulsion). Other information on the Honor Code can be found at  and at

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