Subject-Guide-FNCE90016-2020-SM2 PDF

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FNCE90016 International Financial Management SUBJECT GUIDE

Semester 2, 2020

Prepared by Qi Zeng [email protected] Department of Finance Melbourne Business School

Subject Outline Introduction

Welcome to FNCE90016, International Financial Management. Our world has become more and more inter-connected in terms of economic activities. Looking around, one can hardly find a product that is purely domestically produced. Turning on the news, one constantly hears about the benefit and cost of trades across countries. Financial systems, acting as the source to finance the investment and the consumption of the firms and consumers, also become more and more international. This subject will present a comprehensive study of international financial management. It takes the principles and knowledge that you have learned from domestic finance subjects, and expands to the international setting. Right now, we are facing enormous uncertainties and challenges. A proper understanding of concepts and tools of international finance is much more urgent compared to before. This is an exciting time to learn international financial management. I hope that you will enjoy the ride! Subject Overview and Aims

This subject is designed to give students a sound understanding of the international environment in which firms and investors operate and to introduce corporate financial management in a global economy. It provides an introduction to the workings of the foreign exchange markets, factors impacting the determination of exchange rates, the nature of foreign exchange risk, and important aspects of financial management of multinational corporations. Topics covered include spot and forward markets for foreign currencies, exchange rate determination, interest rate and purchasing power parity conditions, foreign currency derivatives, measuring and managing foreign exchange rate exposure, fundraising in international capital markets, international portfolio investment, and cross border valuations.

Learning Outcomes Learning Outcomes and Generic Skills To view the subject objectives and the generic skills you will develop through successful completion of this subject, please see the University Handbook: https://handbook.unimelb.edu.au/view/2020/FNCE90016

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Eligibility and Requirements To view the eligibility and requirements, including prerequisites, corequisites, recommended background knowledge and core participation requirements for this subject, please see the University Handbook: https://handbook.unimelb.edu.au/2020/subjects/FNCE90016/eligibility-and-requirements

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Academic Staff Contact Details Please see the subject LMS site for full contact details of the teaching staff in this subject. Subject Coordinator Contact Details Name: Qi Zeng Email: [email protected] Phone: 83445359 Consultation Hours: Wednesdays, 1-3pm Email Protocol Please note that we are only able to respond to student emails coming from a University email address. Please do not use personal email addresses such as Yahoo, Hotmail or even business email addresses. Emails from non-University email addresses may be filtered by the University’s spam filter, which means that we may not receive your email. All correspondence relating to this subject will only be sent to your University email address. Note that you must first activate your University email address before you can send or receive emails at that address. You can activate your email account at this link: http://accounts.unimelb.edu.au/. While academic staff endeavour to address queries received via email, it is more appropriate to resolve substantive questions during lectures and tutorials and during normal consultation hours. With this in mind, we encourage students to attend all lectures and to familiarise themselves with the consultation hours offered by the lecturer in this subject.

Lectures Lecture Times Stream 1: Wednesdays 9am-12pm Stream 2: Thursdays 6:15pm-9:15pm I will hold live zoom lectures during Thursday stream. The lectures will be recorded and uploaded when zoom makes it available. You should be able to access the recordings each Friday. Lecture Participation Requirements There is no participation requirement. However, previous cohorts do find attendance of lectures are quite helpful. I believe it is even more so under the current circumstances. That is why I try to give live lectures instead of just recordings.

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Lecture Schedule Week Date Commencing

Chap

Subject

1

Aug 3

1,2

Subject Intro; Overview

2

Aug 10

3

Balance of Payment

3

Aug 17

5

Foreign Exchange Market

4

Aug 24

6

International Parity Relationship

5

Aug 31

7

Currency Futures and Options

6

Sept 7

14

Interest Rate and Currency Swaps

7

Sept 14

--

Mid-term Test

8

Sept 21

8,9

Foreign Exchange Exposure and Management (I)

9

Sept 28

10,12,13 Foreign Exchange Exposure and Management (II) International Equity and Debt Financing

10

Oct 12

15

International Portfolio Investments

11

Oct 19

17,18

International Capital Budgeting

12

Oct 26

16

FDI and Final Review

Lecture Slides

Lecture slides will be placed on the LMS page for this subject. Textbook

The prescribed textbook is: Eun and Resnick (2017), International Financial Management, 8th edition, McGraw-Hill Irwin. You can also buy the ebook version from McGrawHill directly.

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Using Lecture Capture Audio and video recordings of lectures delivered in this subject will be made available for review following each lecture. These recordings allow you to revise lectures during the semester, or to review them in preparation for the end of semester exam. You can access recorded lectures by clicking on the Lecture Recordings (or similar) menu item on the LMS page for this subject. The University has recently moved to a new Lecture Capture platform with additional features. Please review the Lecture Capture Student Guides page for more information: https://lms.unimelb.edu.au/support/guides/students/lecture-capture-student-guide

Workshops There are no tutorials for this subject. However, I will conduct live workshops starting in Week 2. I will go over the exercises from the previous weeks’ lecture, as well as answering your questions. It is NOT recorded. Workshop Times This will hold during Wednesday lecture sessions: 11am-12pm. Workshop Participation Requirements The participation of workshops is voluntary. The solutions to the exercises will be posted online.

Private Tutoring Services Faculty has become increasingly concerned about the existence of a number of private tutoring services operating in Melbourne that heavily target University of Melbourne students enrolled in FBE subjects. Students are urged to show caution and exercise their judgement if they are considering using any of these services, and to please take note of the following: Any claim by any of these businesses that they have a “special” or “collaborative” or “partnership” style relationship with the University or Faculty is false and misleading. Any claim by a private tutoring service that they are in possession of, or can supply you with, forthcoming University exam or assignment questions or “insider” or “exclusive” information is also false and misleading. The University has no relationship whatsoever with any of these services and takes these claims very seriously as they threaten to damage the University’s reputation and undermine its independence.

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It is also not appropriate for students to provide course materials (including University curricula, reading materials, exam and assignment questions and answers) to operators of these businesses for the purposes of allowing them to conduct commercial tutoring activities. Doing so may amount to misconduct and will be taken seriously. Those materials contain intellectual property owned or controlled by the University. We encourage you to bring to the attention of Faculty staff any behaviour or activity that is not aligned with University expectations or policy as outlined above.

Assessment Assessment Overview Your assessment for this subject comprises the following: Assessment Task

Details

Due

Weighting

Assignment

Group

TBD

20%

Mid-semester exam

MCQ

TBD

20%

Final Examination *

TBD

Assessment period

60%

Please note that the Final Examination has a hurdle requirement. You must pass the final exam to pass this subject.

Assessment 1: Group Assignment The group assignment will contribute 20% to your overall marks. It will be distributed in week 4. Additional details will be provided in class and on the LMS.

Assessment 2: Mid Semester Test A one-hour mid semester test will contribute20% to your overall marks. The test will cover materials from weeks 1 – 5 inclusive. Additional details will be provided in class and on the LMS.

Assessment 3: Final Examination A two-hour end of semester, open book examination will contribute 60% to your overall marks. Additional details will be provided in class and on the LMS. Assignment Submission All written assignments are submitted via the Assignments tab in the navigation menu on the LMS page for this subject. More information will be provided on LMS.

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Please note that you are required to keep a copy of your assignment after it has been submitted as you must be able to produce a copy of your assignment at the request of teaching staff at any time after the submission due date. Penalties for Late Submission 10% per day deduction for late submission. Students with a genuine and acceptable reason for not completing an assignment (or other assessment task), such as illness, can apply for special consideration (see policy below).

Subject Resources Prescribed References

The prescribed textbook is: Eun and Resnick (2017), International Financial Management, 8th edition, McGraw-Hill Irwin. Supplementary Readings

A separate reading list will be posted on the LMS.

Academic Integrity Academic Honesty The University maintains high academic standards in its courses and subjects and expects students to conduct themselves in a manner which is fair, honest and consistent with the principles of academic integrity, particularly when undertaking assessment and research. http://academicintegrity.unimelb.edu.au/ Referencing All sources used for a written piece of assessment must be referenced. This is to acknowledge that your material is not based entirely on your own ideas, but is based, in part, on the ideas, information, and evidence of others. This is desirable as you are attending University in order to learn from others. You will be required to use the APA system of referencing. The library has prepared a website to help students correctly reference: http://www.lib.unimelb.edu.au/recite/citations/harvard/generalNotes.html It is important that all material you present for assessment is referenced correctly. Material that has not been referenced correctly may be considered to be plagiarised, and as such may be penalised. We will also look for evidence that material included in the bibliography has been used in the assignment. Including references that have not been used may also result in your assignment being penalised 8

The Academic Skills Unit has produced resources to assist students with referencing https://services.unimelb.edu.au/academicskills/undergrads/top_resources The Library also provides advice on referencing: http://library.unimelb.edu.au/cite

University Services Timetable MyTimetable is a class timetabling system that creates individual timetables for students based on submitted class preferences, ensuring everyone has an equitable opportunity of getting their preferred class timetable. You will use this system to create your class timetable prior to each study period. By following a preference-based model, students who have other commitments, such as employment or carer responsibilities, or who are returning or living overseas during the timetabling period, aren’t disadvantaged by their limited availability. When allocating class timetables, MyTimetable also takes into consideration factors such as class size limits and potential clashes to ensure all students are equally accommodated. Further information is available on the web at https://students.unimelb.edu.au/admin/class-timetable Stop 1: Connecting Students and Services Stop 1 is here to provide you with a range of support services throughout your university degree, from help with enrolment, administration and wellbeing to advice on building your skills and experiences. https://students.unimelb.edu.au/stop1 Academic Skills Academic Skills offers a range of workshops and resources to help you with study skills including researching, writing and referencing, presentation skills and preparing for exams. Visit their website via http://services.unimelb.edu.au/academicskills. Service Finder The University of Melbourne offers one of the most comprehensive student support networks in Australia. Use this site to locate a wide range of services http://services.unimelb.edu.au/finder Student Counselling Students attend counselling to talk about personal, emotional, or mental health issues which might be affecting their study and life. The University’s Counselling and Psychological Services (CAPS) provides free, confidential, short-term professional counselling to currently enrolled students and staff. https://services.unimelb.edu.au/counsel/individual Student Equity and Disability Support Student Equity and Disability Support provides services for students who need ongoing support with their studies. They understand that adjustments to learning and assessment 9

are sometimes required to allow all students to reach their full potential. Learn more about the services provided, how to find support and how to register for assistance. http://services.unimelb.edu.au/student-equity University of Melbourne Library Services As well as holding an extensive collection of books, ebooks, digital media and periodicals, library staff provide research guidance and support for students. http://library.unimelb.edu.au/ These Business and Economics Library Guides have been designed specifically for Faculty of Business and Economics staff and students. http://unimelb.libguides.com/sb.php?subject_id=80310

Policy Alternative Exam Arrangements (AEA) The definition of and eligibility requirements for alternative exam arrangements (AEA) can be found via http://students.unimelb.edu.au/admin/alternate . Mid-semester examinations/tests are organised by the Department of Finance. If you wish to request alternative arrangements, email [email protected] with a copy of your approved Academic Adjustment Plan. Assessment and Results Policy The University’s assessment policy provides a framework for the design, delivery and implementation of assessment of students in award and non-award courses and subjects. Assessment is designed to contribute to high quality learning by students, and to allow for quality assurance and the maintenance of high academic standards. https://policy.unimelb.edu.au/MPF1326 Assignment Extension Requests for an assignment extension should be submitted here: http://go.unimelb.edu.au/yh9n. Before completing this form, please read the Assignment Extension Policy, which can be found at: http://policy.unimelb.edu.au/MPF1326 Exam Policy The University requires that you are available for the entire examination period. Please see the University's Principal Dates via http://www.unimelb.edu.au/dates#2020 for the full annual calendar. Supplementary exams will not be provided in cases of absence during the examination period unless the absence is due to serious illness or other serious circumstances and a Special Consideration application is submitted and approved.

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Information on Calculators in Examinations Effective from 1 January 2017, the approved calculator for all subjects is the Casio FX82 (any suffix). No equivalent models of calculators will be permitted in exams. You are required to purchase your own calculator and are responsible for ensuring your calculator is in good working order with fresh batteries. Plagiarism and Collusion Plagiarism (failure to cite your sources correctly and completely) and collusion (unauthorised collaboration with another person to prepare an assessment task) are considered academic misconduct and attract severe penalties. More information is available on the University’s Academic Integrity website via http://go.unimelb.edu.au/rha6. Special Consideration As a student, you may experience extraordinary or unusual circumstances, or ongoing circumstances that adversely affect your academic performance. The University has policies in place to support students who are experiencing academic disadvantage. For more information, visit http://students.unimelb.edu.au/admin/special.

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