Class History: International Financial Management (Summer 2018)

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Course: International Financial Management (Summer 2018)

Total classes: 28 (18 regular classes and 10 extra classes).

Class 1

May 14; Room 702; Time 11:45 -12:30 

An overview of the whole course.

Class 2

May 16; Room 702; Time 11:30 -12:30 

MNC defined. Goals of MNC. Why do firms engage in international business?

Class 3

May 21; Room 702; Time 11:15 -12:00 

Comparative advantage theory. Agency problem. Types of international business.

Class 4

May 23; Room 702; Time 12:10 -1:20 

How to reduce agency cost? Higher agency cost in MNCs. Management style in MNCs. Risks in international business.

Class 5

May 28; Room 702; Time 11:30 -12:30 

Risks in international business. Exchange rate movement risk. Risk associated with change in national economy. Political risk.

Class 6

May 30; Room 702; Time 11:45 -12:45 

Balance of payment. Balance of trade. Current account of a country. Math: find out the balance of trade of a country from a list of transactions.

Class 7

June 4; Room 702; Time 11:15 -12:20 

Capital account of a country. Factors affecting international trade flow. How to fix a deficit balance of trade? Is it really beneficial to fix a deficit balance of trade?

Class 8

June 6; Room 702; Time 11:25 -12:45 

Factors affecting foreign direct investment in a country. Global financial crisis defined. The cause of global financial crisis (phase 1 to 12 discussed).

Class 9 (Extra)

June 6; Room 702; Time 1:50 -2:25 

Global financial crisis (phase 13 to 19 discussed). 

Announcement: class test (MCQ) on 27 June on chapter 1, 2, 7. 

(Last class before the Eid vacation)

Class 10

June 25; Room 702; Time 11:20 -12:20 

Review of the midterm exam Syllabus.

Class 11

June 27; Room 702; Time 11:30 -12:25 

MCQ quiz.

Solution to the mathematical problems of MCQ quiz.

Midterm Exam

June 30. Time: 5:00 PM.

Syllabus: Chapter 1, 2, 7.

Class 12

July 18; Room 702; Time 11:30 -1:05 

What is exchange rate? Direct and indirect quotation. Exchange rate systems. The exchange rate system in Bangladesh. Math: pegged exchange rate system.

Class 13

July 23; Room 702; Time 11:40 -1:00 

Derivatives and their types. Underlying asset. Currency derivatives. Forward contract. Mathematical examples on forward contract.

Class 14

July 25; Room 702; Time 11:25 -1:00 

Futures contract and their features. Options and their types. Strike price vs delivery price. Delivery date vs exercise date. Payoff from call and put option. Explanation with graph: how does a futures option work?

Class 15

August 1; Room 702; Time 11:00 -12:35 

Mathematical problems: Payoff from call options and payoff from forward contracts (same underlying asset). Speculation. Math: profit from speculation with and without the support of loan (loan and cash combined).

Class 16

August 6; Room 702; Time 12:15 -1:40 

Mathematical problems:

1.      Bid Ask spread

2.      Math: calculate the loss due to cancellation of a foreign trip. Here, bid and ask prices are given

3.      Math: calculate the loss due to cancellation of a foreign trip. Only bid ask spread is given.

4.      Math: arbitrage with and without the support of short term loan.

Class 17

August 8; Room 702; Time 11:15 -12:40 

Optimum borrowing amount for speculation to make a desired amount of profit (mathematical problem). Finding the desired exchange rate that will ensure a certain amount of profit from a call option (mathematical problem).

Class 18 (Extra)

August 11, Room 702; Time 12:45 - 2:15 

Appreciation and depreciation of home currency. Demand and supply of foreign currency and equilibrium exchange rate. Classic factors behind exchange rate movements: short run and long run. Interaction of factors. Exchange rate forecasting methods. Market based forecasting. Technical forecasting.

Class 19, Class 20 (Extra)

August 28, Room 601;

Time:

2:30 - 3:45 (class 19)

3:45 - 5:00 (class 20) 

Capital components: kd, kdT, ke, ks, kp. Cost of capital or WACC of a multinational project. Valuation of a multinational project using NPV method (math).

Class 21

August 29, Room 702; Time 1:00 - 1:40 

Cash Flow patterns of multinational firms. Valuation of the whole MNC.

Class 22 (Extra)

August 29, Room 701; Time 1:45 - 2:45 

Model Test.

Class 23 (Extra), Class 24 (Extra), Class 25 (Extra)

August 29, Room 701;

Time:

4:00 - 5:15 (class 23)

5:15 - 6:15 (class 24)

6:15 - 7:15 (class 25) 

Solution to the model test. Solution to other problems in the final exam Syllabus.

Final Exam

September 1. Time: 4:30 PM. Room: 602

Syllabus: Chapter 3, 4, 5, 6.

Class 26 (Extra), Class 27 (Extra), Class 28 (Extra)

September 12, Room: Computer lab;

Time:

3:30 - 4:45 (class 26)

4:45 - 6:00 (class 27)

6:00 - 7:30 (class 28) 

Workshop on exchange rate forecasting using fundamental /empirical method with computer. Marks were given based on the performance.

Course Details

• International Financial Management (Summer 2018)