UCR BUS 138 Winter 2020 Syllabus PDF

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Download UCR BUS 138 Winter 2020 Syllabus PDF

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BUS 138 – 01 Course Title Instructor: Z. Ayca Altintig, PhD Office: OLMH 2331 Classroom: OLMH 1212 E-mail: [email protected]

Quarter: Winter 2020 Lecture time: M 6:30 – 9:20 pm Course Website: http://ilearn.ucr.edu/ Office Hours: M 5:00 – 6:30 pm

School of Business: Vision We pursue excellence in all that we do, as our vision is to be an internationally recognized leader in business education and research. Mission We create knowledge through impactful research, unlock potential through exceptional educational experiences, and foster success in an innovative and collaborative environment. Strategy We pursue excellence in all we do by cultivating our environment, engaging our community and empowering our stakeholders. Undergraduate Program – Learning Goals Problem Solving Skills Students will be able to use a variety of theoretical perspectives to identify and critically evaluate implications of business decisions for organizational stakeholders (e.g., customers, colleagues, employees, stockholders, suppliers, foreign governments, communities, cultures, regulatory agencies) and the natural environment. Professional Integrity / Ethical Reasoning Skills Students will be able to recognize ethical issues, demonstrate familiarity with alternative frameworks for ethical reasoning, and discern trade-offs and implications of employing different ethical frames of reference when making business decisions.

Global Context Skills Students will be conversant with major economic, social, political, and technological trends and conditions influencing foreign investment and development of the global economy and demonstrate an understanding of the cultural, interpersonal and analytical competencies required for engaging in global business activities. Written Communication Skills Students will demonstrate proficiency in written communications by creating written documents that are clearly written, with appropriate content and conclusions.

A survey of international financial institutions and the financial factors that affect the modern multinational corporation. Covers trade and international investment theories and empirical analysis. Topics include the international financial systems, balance of payments, foreign exchange markets, measurement of foreign exchange risk, hedging, international asset pricing, and trade financing. This course aims to equip students with the advanced knowledge and skills necessary to participate in the increasingly integrated global financial markets. The course overviews the evolution of the complex international financial environment over the last century, studies the various structures of financial markets around the world, and analyzes the different financial instruments that have developed in these markets. The class provides students with a solid background to develop the skills they would need in a global financial market.

Course/Learning objective       

Identify the determinants of currency prices and explain how these prices change in the foreign exchange (FX) markets; Distinguish how various exchange rate systems affect currency prices in the FX markets; Explain how a country’s balance of payments affect currency prices in the FX markets; Explain international parity conditions which link the prices of goods, interest rates, spot rates and forward rates throughout the world; Distinguish between three foreign exchange exposures; Compare and contrast the basic characteristics of various financial instruments in the currency markets (eg. forward contracts, futures contracts, options, and swaps) ; Explain how foreign exchange instruments may be used to earn speculative profits, or hedge against exchange rate exposure;

Prerequisite BUS 106 or ECON134

Course Materials

 Textbook: International Financial Management , 8th edition by Eun & Resnick, McGraw-Hill (ISBN: 9781259717789).  Other material: It is highly recommended to keep up with current developments in the business environment. You can do this by reading the relevant articles in a good newspaper (e.g., Financial Times, Wall Street Journal, New York Times) or weekly magazine (e.g., BusinessWeek, Economist). You are encouraged to bring up current events for discussion in class, as time permits.  Calculator: All students need a calculator. Financial calculators are preferred, but you can use any calculator that can carry out the functions in class. Mastery of the specific calculator is the responsibility of the student. No other electronic devices will be permitted on the exam other than a calculator. (You cannot use the calculator functions on your smartphones or tablets…etc).

Grading policy Midterm Exam Final Exam Assignments and Cases Group Project Total

25 % 30 % 20 % 25 % 100%

Grades will be posted throughout the term on iLearn. If you find any problem with your score, you must inform the instructor within one week from the time this score is posted. After one week, scores will not be reviewed. In the case of score dispute, the entire exam or assignment will be reviewed, not just the question(s) in dispute. The score could go up, down, or remain the same.

Class Format Most of the class time will be structured in the traditional lecture format. A number of business cases will be included to provide examples of real world situations involving international finance events, practices and specialized applications of international financial tools and instruments. Students are expected to have read the assigned material before class. Student participation and questions are strongly encouraged. Assignments and Cases: There will two assignments and three business cases throughout the quarter. Students are expected to complete these before class and turn them in at the beginning of class. They will be discussed during class on the day they are due. Group project

There will be a final group project. The project will involve a detailed analysis of the financial environment of a foreign country for portfolio or foreign direct investment purposes and will include an assessment of the relevant currency, transaction and political risks. The projects will be turned in at the end of the quarter and discussed throughout the quarter. Exams There will be two in-class exams: one midterm and a cumulative final exam. All examinations will be closed books/notes. Students are expected to take exams at the scheduled times. There will be no make-up exams. Participation and Attendance Regular class attendance and participation is vital to the learning process and is required. Students should come to class prepared enough to effectively participate. On the days when assignments and cases are discussed, active participation will earn extra points in the class. Though there may not be a written attendance on a given day, I WILL recognize your absence. Please do not come to class late or leave early.

Integrity statement: At the University of California, Riverside (UCR) honesty and integrity are fundamental values that guide and inform us as individuals and as a community. The academic culture requires that each student take responsibility for learning and for producing work that reflect their intellectual potential, curiosity, and capability. Students must represent themselves truthfully, claim only work that is their own, acknowledge their use of others’ words, research results, and ideas, using the methods accepted by the appropriate academic disciplines and engage honestly in all academic assignments. Misunderstanding of the appropriate academic conduct will not be accepted as an excuse for academic misconduct. If a student is in doubt about appropriate academic conduct in a particular situation, he or she should consult with the instructor in the course to avoid the serious charge of academic misconduct. To ensure the highest standard of academic integrity, all students should be familiar with the guidelines posted at: http://conduct.ucr.edu/SiteCollectionDocuments/DocumentsFromStudentConduct/AcademicIntegrity BrochureStudent.pdf

Course Schedule January 6 January 13 January 20 January 27 February 3

February 10 February 17 February 24

March 2 March 9 Thursday March 19

Introduction and Syllabus Introduction to International Finance International Monetary System Balance of Payments What influences exchange rates? Assignment 1 Due Foreign Exchange Markets International Parity Conditions International Parity Conditions – Wrap-up Exam Review Assignment 2 Due Midterm Exam Foreign Currency Derivatives Barings Bank Case Due Managing Foreign Exchange Exposure Transaction Exposure – Lufthansa Case Due Economic and Translation Exposures Interest Rate and Currency Swaps Disney Case Due International Financial Markets Final Exam 3:00 – 6:00 pm

Chapter 1 +4 Chapter 2 Chapter 3 Chapter 5 + 6 Chapter 6

Chapter 7 Chapters 8 +10

Chapter 14...