Course Description (Franklin College Switzerland 2001-2002 Catalog)

This course deals with financial problems of multinational business. Topics include sources of funds for foreign operations, capital budgeting and foreign investment decision, foreign exchange losses, and evaluation of securities of multinational and foreign corporations. Particular emphasis is placed on international capital and financial markets (Prerequisites: BUS 326 and BUS 306 recommended).

Course Objectives

This course provides an overview of many of the world's capital markets, with particular emphasis on equity markets of specific countries and regions. The course examines, at a macro level, the development and operations of major and emerging capital markets and involves extensive analysis, comparisons, and forecasting of their respective performance from databases provided. The course is designed to provide students with a comprehensive understanding of the similarities and differences among the world's developed and emerging capital markets in all regions, including North and South America, Asia, Europe, Middle East, and Africa.

The course is designed to enable students to gain a reasonable understanding of:

1. The operations of global equity markets
2. How to measure the performance and volatility of these markets
3. The impact of exchange rates on performance and volatility
4. The correlation (or lack thereof) of returns among global and regional markets
5. Investing and hedging using market index options and futures

At the same time, many of the world's equity markets remain staunchly independent. How do they operate? How can international investors participate in potential profit opportunities? What are the tax implications of investing in foreign markets? These are some of the questions which the course attempts to address. The successful outcome of the course depends heavily on the students' willingness to engage in applied research on world markets, as well as to prepare frequent analyses on global market data.

General Comments on the Course

As one might conclude, this course in international finance will be extensive. Not only will assignments be made from the text, but also supplementary articles will be assigned on a periodic basis that will be available as class handouts or placed on reserve in the library. It is expected, on a daily basis, students will read the business section of the International Herald Tribune or The Wall Street Journal (both available in the library) so that we might apply current events to the principles of international finance during class discussions.

The new analytical tool consists in applying this test. Observe closely, record findings exactly, and frame generalities that cover the facts, without coloring from myth, poetry, or other preconceived idea. The lessons learned will enable you to predict without fail the future behavior of things and thereby guide action with assurance and wisdom. Knowledge is Power!

Evaluation and Grading

Your grade in the course will be determined by your performance in activities like; case studies and final term project. The weight given to each is as follows:

Your grade will be determined solely based on your performance on the exams and activities indicated. There will be NO extra credit. The only points that can be earned are noted above.

Text

International Financial Management, Jeff Madura, Southwestern College Publishing, 6th Edition, 2000.

Methodology

The format of the class will be lecture-oriented, based on the assigned reading and exercises.

Homework will be assigned for every class that will also provide the basis for class discussion.

Class participants are encouraged to actively engage the instructor to clarify points, and ask questions pertaining to the issues at hand, and to seek assistance during posted office hours.

Preparation includes (1) reading material, (2) solving the assigned exercises and problems, and (3) identifying questions that you need answered. Attendance may be taken and assignments may be picked up on an unannounced basis. Also, students may be asked to present problems in class. While attendance and homework assignments will not be graded per se, they may factor into the Subjective Assessment noted in the Evaluation and grading section.

Attendance Policy

Attendance will be taken regularly. A student who for no valid reason remains absent from campus for an excessive length of time during the semester may be asked to withdraw from the course and from the college. Non-compliance with the expectation of attendance may result in the student being dropped from the roll for the course by the professor in consultation with the Dean and, in any case, will incur a reduction of the student's final grade by up to 15% after the course evaluation criteria (see section below) have been computed. The reduction of the final grade will be determined by the instructor after a careful consideration of the following guidelines:

• 1 - 3 unexcused absences: reduction by up to 5%.
• 4 - 6 unexcused absences: reduction by 10 - 15%.
• More than 6 unexcused absences: grounds for withdrawal from the course.

Students who miss a class due to illness must provide the instructor with a valid medical certificate if they wish to prove cause of absence.

Students will be expected to arrive for class promptly. Tardiness is distracting and time consuming for both the instructor and class participants. Students who consistently arrive late will be charged with unexcused absences, which may affect final grades as noted above.

Course Calendar: Bus 426