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25731 International Finance

Warning: The information on this page is indicative. The subject outline for a particular session, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

Subject handbook information prior to 2018 is available in the Archives.

UTS: Business: Finance
Credit points: 6 cp

Subject level:

Postgraduate

Result type: Grade and marks

Requisite(s): ((25742 Financial Management OR 25746 Financial Management: Concepts and Applications)) AND ( 25741c Capital Markets )
The lower case 'c' after the subject code indicates that the subject is a corequisite. See definitions for details.
These requisites may not apply to students in certain courses.
There are course requisites for this subject. See access conditions.

Description

This subject examines foreign exchange markets, multinational working capital, international investments and the financing of international operations. On completion, students are able to understand how firms operate in the international financial environment.

Subject learning objectives (SLOs)

Upon successful completion of this subject students should be able to:
1. discuss the foreign exchange market and key parity relationships between spot and forward exchange rates, interest rates and inflation rates
2. evaluate key hedging strategies involved in foreign exchange risk management
3. evaluate international investment decisions to decide whether foreign investment is viable
4. analyse different ways of financing foreign operations through global capital markets like Euromarkets.

Contribution to the development of graduate attributes

International Finance seeks to extend the corporate finance framework to an international setting. Consideration of foreign exchange markets and parity relationships forms the basis for dealing in corporate treasury management and synthetic financial products. International Finance sets the framework to examine the impact of international investment and financing issues on investment management decisions and strategies.The design of this subject and its delivery contributes to students acquiring the following business school graduate attributes: business knowledge and concepts, critical thinking and analytical skills and business practice oriented skills.

Teaching and learning strategies

The subject will be taught using a combination of lectures and workshops. These classes will be supplemented with both printed and electronic learning materials and resources. The UTS web-based communication tool (UTS Online) will be used to share information and encourage interaction between staff and students. Students will also use appropriate computer software such as spreadsheets and word processors to complete assigned tasks, as well as online interactive tools to assess their own learning progress throughout the semester.

Students are expected to prepare for class by attempting the end of chapter questions and weekly challenge questions posted on UTSOnline. Students should be prepared to discuss the material and tutorial questions during the class. There will be opportunities to go through examples and any difficult questions, and students are encouraged to participate in interactive classroom based quizzes and live Bloomberg demonstration.

There will be regular in-class quizzes which students will participate in using Kahoot! and Quizziz (interactive online quiz applications). The correct solutions will be uploaded to UTSOnline and allow students to self-assess their learning and give them feedback on their progress. Lecturers will also be reviewing highlighted questions from the quizzes in class.

During the semester, students are responsible for keeping up-to-date with any announcements and information and encouraged to utilize the Blackboard discussion forum for sharing ideas and assisting with their understanding of the concepts and topics. There will be fortnightly self-assessed challenge questions posted on UTSOnline, and students are encourage to discuss and seek answers from lecturers and other students via the Blackboard discussion forum.

Content (topics)

1. Introduction to international finance
2. Foreign exchange markets
3. Foreign exchange risk management
4. Multinational working capital management
5. Foreign investment analysis
6. Special financing vehicles - interest rate and currency swaps
7. Designing a global financing strategy

Assessment

Assessment task 1: Quiz (Individual)

Objective(s):

This addresses subject learning objective(s):

1

Weight: 10%
Length:

20 minutes quiz held on UTS online

Assessment task 2: Exam (Individual)

Objective(s):

This addresses subject learning objective(s):

1 and 2

Weight: 30%
Length:

The in-class (mid-semester) exam is of 60 mins duration with 10 mins reading time. No formula sheet is provided. The exam is closed book (no books or other teaching or learning materials are allowed). The exam is held at the usual class time and there are NO other opportunities whatsoever to sit the exam.

Students must bring a non-programmable calculator. Smart phones (or any device connectable to the internet; or any device which can be used for sending or receiving messages or other information; or devices with a camera or recording apparatus) of any description are NOT allowed under any circumstances. Students must bring their student ID card. No student ID card - no entry (and no catch up on a different day). Students must attend the exam at the time of the class that they are enrolled for. The exam is held at the usual class time and there are no other opportunities to sit the exam. This is a closed-book exam and NO formula sheet is provided. The questions are all multiple choice and some (but not all) involve numerical calculations. You will be provided with a booklet in which you do rough working. All rough working must be done in this booklet. Students are not allowed to bring in or use other pieces of paper or booklets for rough working.

Students should bring a pencil and a rubber (eraser) (a pencil is better than a pen as it is then possible, by using the rubber, to change answers later if you decide your original choice was no longer your preferred choice).

If you leave the exam early for any reason, you will not be allowed to return.

This mid-semester exam is a formal exam and strict exam rules apply.

Assessment task 3: Final Exam (Individual)

Objective(s):

This addresses subject learning objective(s):

1, 2, 3 and 4

Weight: 60%
Length:

2 hours plus 10 mins reading time. A sample final exam will be provided via UTS Online closer to the date to serve as a guide on the type of exam questions that students can expect.

Minimum requirements

Students must achieve at least 50% of the subject’s total marks.

Required texts

Shapiro, A.C., Multinational Financial Management, 10th ed., 2014, John Wiley & Sons, Inc. (S)

References

  1. Shapiro, A.C. & Sarin, A., Foundations of Multinational Financial Management, 10th ed., 2009, John Wiley & Sons, Inc.
  2. Bekaert, G., Hodrick, R.J., International Financial Management, 2009, Pearson Education International Edition
  3. Eiteman, D.K., Stonehill, A.I., Moffett, M.H., Multinational Business Finance,12th ed., 2010, Pearson
  4. Eun, C.S., Resnick, B.G., International Financial Management, 6th ed.,2012, McGraw Hill
  5. Madura, J., International Financial Management, 10th ed., 2010,Cengage Learning
  6. Levi, M.D., International Finance, 5th ed., 2009, Routledge
  7. Moosa, I.A., International Finance, 3rd ed., 2010, Irwin/McGraw Hill
  8. Sathye, M, Rose,L, Allen, L, Weston, R, International Financial Management, 2006,John Wiley & Sons
  9. Solnik, B., International Investments, 5th ed.,2004, Pearson Addison Wesley

Resources provided to each student via UTSOnline:

  1. Lecture notes: These will be uploaded onto UTSOnline prior to each week's lectures. They aim to reduce the amount of time that students spend copying information from lectures in order to ensure that students listen and learn from lectures. It is the students' responsibility to access and/or print these notes for their study prior to class.
  2. Solutions to tutorial questions and problems (provided at the end of the lecture week). Students are expected to go through all of these in their own time but some selected questions (listed in the "Tutorials" folder) will be explained during class times.
  3. Sample exams (and solutions)

Other resources

Lecture Overheads
Lecture overheads will be available on UTS online.

Other References
• Faculty of Business (2010), Guide to Writing Assignments (available through UTSOnline
or at http://www.business.uts.edu.au/resources/guide.html)