UNIVERSITY OF WYOMING COLLEGE OF BUSINESS

DEPARTMENT OF ECONOMICS AND FINANCE

FINANCE 4460, MULTINATIONAL FINANCE

T/R 11:00AM – 12:15PM BU 23

FALL 2011

Instructor: Hilla Skiba, Ph.D., Assistant Professor of Finance

Office: BU 239 E

Telephone: Office #: 766-4199

Office Hours: Tuesdays and Thursdays 9:45am-10:45am

E-Mail: hskiba@uwyo.edu

Course Description and Learning Objectives:

Building on the fundamental concepts of international finance, the objective of this course is to give

students an understanding and the ability to identify the new risks and opportunities that investors and

firms face in the global financial markets. The course deals with techniques used by financial managers

and investors and the topics covered include, but are not limited to, exchange rate determination,

management of foreign exchange exposure, international portfolio investment, and current topics in

international finance. Students successfully completing this course will:

Understand how exchange rate risk can be quantified and hedged

Know how to quantify risk and returns in financial securities and portfolios in international setting

Know how to apply their quantitative skills to analyzing real world firms and how the addition of

international opportunities changes firms’ and portfolios’ risk/return/pricing

Develop understanding of other major markets outside the US, for example the Euro zone, and how

the global markets are increasingly correlated and integrated

Develop basic understanding of global money management industry

Required Textbook:

Short version of International Financial Management, 5th edition, by Eun and Resnick available at

Wyoming bookstore only (of course you may use the book as well). The text is the integrating document

for the entire course. The presumption is made that you will have the text material in hand prior to class.

Class time will usually be devoted to extensions of the book's coverage, relying heavily on supplemental

materials, numerical problems, and mini cases available on the course website.

Course Prerequisites: FIN 3250, FIN 3310, Junior class standing

Grading and Course Requirements:

Quizzes 10% 5-8 during the semester. Will be announced one week in advance

Homework assignments 5% 6-9 during the semester. Will be announced one week in advance

Attendance 5% 5-10 unannounced attendance quizzes will be given in class

Written project 20% Tuesday, November 29th, in class

Mid-semester Exam 25% October 13th

Final Exam 35% Thursday, December 8th, 10:15am-12:15pm

Grading and Course Requirements (cont’d):

I will assign final grades so that 100-90% guarantees an A, 89-80% guarantees a B, 79-70 guarantees a C,

and 69-60% guarantees a D. All assignments are due in class on the day of the due date unless otherwise

announced.

Homework assignments are graded so that completed and correct homework receives a grade of 10/10

points. Almost completed/correct assignment receives a grade of 8/10 points, incomplete assignment

receives a grade of 5/10 points, late assignments receive 0/10 points.

Quizzes are graded based on correctness out of 10 points, sometimes with partial credit.

Attendance quizzes are graded based on completion alone, but a student must be in class to receive points

on these attendance quizzes.

Written projects are graded based on three criteria, so that 40% of the written project grade comes from

completeness, 30% from clarity and finance literacy, and 30% of the grade comes from professionalism

and ethical research methods. More detail about the grading of the project will be handed out before mid-

semester.

Group Work

I expect each individual to turn in their own work, although group work is allowed and encouraged.

Course Outline and Assignment Schedule: The course builds on your learning in FIN 3250, but some basic stock valuation methods will be introduced.

Because the material in the course follows current events, the outline is subject to change so that current event

will be covered in class along with the corresponding textbook material. Because of this, the assignment

schedule is flexible. However, for each major topic on the outline (topics 1-6), the number of quizzes and

homework assignments are shown. The sequence of our study that is subject to change will be as follows:

Topic Assignments/Quizzes

1. Foundations of International Financial Management (Chapters 1 – 4) HW 1, Quiz 1

a. Globalization and financial markets

b. Introduction to exchange rates

c. Balance of payments

d. Corporate governance around the world

2. The Market for Foreign Exchange (Chapters 5 – 8) HW 2, 3, 4, Quiz 2, 3, 4

a. FX Markets

b. Interest rate parity and FX

c. Futures and Options

d. Managing FX risk

3. International Equity Markets (Chapters 13, 15, supplements) HW 5, 6, 7, Quiz 5, 6

a. Overview of Equity markets

b. Overview of Equity Valuation

c. International portfolio investment

d. Stock valuation basics

e. Asset pricing in international environment

f. International investing in practice

3. Bonds and Cost of Capital (12, 17) (Briefly)

a. World’s bond markets

b. International capital structure and cost of capital

5. Multinationals (Chapters 16, 19, 21) HW 8, Quiz 7

a. Reasons for FDI

b. Cash management

d. International tax environment

6. Interest Rate and Currency Swaps (Chapter 14) HW 9, Quiz 8

Attendance Policy: Your participation and attendance at each class meeting is expected, but not required.

Attendance quizzes that usually cover a simple question over the day’s lecture are given randomly throughout

the semester. A missed class activity can be made up only with a University authorized excuse. Text

messaging in class in not permitted. One text message will cost one attendance percent up to 5% total.

Academic Dishonesty:

Cases of academic dishonesty will be treated in accordance with UNIREG 802 Rev. 2.

Grade Dispute:

Grade appeals must be submitted to me, in writing, within one week after the assignment is returned to the

student. This written appeal should contain a description of the assignment question, student answer, and a

detailed objection to the current grade. Please submit this appeal along with the graded assignment that is in

dispute.

Disabilities: If you have a physical, learning, or psychological disability and require accommodations, please let me know

as soon as possible. You will need to register with University Disability Support Services (UDSS) in SEO,

room 330, Knight Hall, udss@uwyo.edu.

Disclaimer: Although the syllabus represents the contract between the students and the instructor, changes may be

warranted during the course of the semester. Whenever possible, such changes will occur by mutual

agreement. Students will be notified at the earliest possible time if any of these changes are required.