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FINC13-307: International Finance January 2020 [Standard]

General information

Learning to take advantage of opportunities in the global financial markets while managing the associated risks is the aim of this advanced finance subject. The primary themes include understanding the nature of international financial markets, risk management and hedging by firms with international operations, the advantages and disadvantages of the diverse sources of funds available from international financial markets and issues related to cross-border and multi-currency valuation. You will apply theoretical frameworks to analyse the macroeconomic environment of international finance and employ an array of financial instruments and tools for managing foreign exchange and country risk, raising capital in the global financial markets and valuing cross-border investments. The case method is central to the learning approach used in this subject, highlighting a number of contemporary organisations and issues in international finance. The material draws on and extends theories and concepts from previous subjects to provide an in-depth understanding of the themes noted above.

Details

Academic unit:Bond Business School
Subject code:FINC13-307
Subject title:International Finance
Subject level:Undergraduate
Semester/Year:January 2020
Credit points:10

Delivery & attendance

Timetable: https://bond.edu.au/timetable
Delivery mode:

Standard

Workload items:
  • Tutorial: x12 (Total hours: 24) - Lab Tutorial 2
  • Lecture: x12 (Total hours: 24) - Weekly Lecture
  • Personal Study Hours: x12 (Total hours: 72) - Recommended study time & reviewing materials
Attendance and learning activities: Attendance at all class sessions is expected. Students are expected to notify the instructor of any absences with as much advance notice as possible.

Resources

Prescribed resources:
  • Southam, Dunbar and Lindquist (2013). Initial Public Offerings.
  • Various Authors Media. [Readings] Provided on iLearn.
[email protected] & Email:[email protected] is the online learning environment at Bond University and is used to provide access to subject materials, lecture recordings and detailed subject information regarding the subject curriculum, assessment and timing. Both iLearn and the Student Email facility are used to provide important subject notifications. Additionally, official correspondence from the University will be forwarded to students’ Bond email account and must be monitored by the student.

To access these services, log on to the Student Portal from the Bond University website as www.bond.edu.au

Enrolment requirements

Requisites: ?

Nil

Restrictions: ?

Students must have completed 120 credit points prior to enrolling.

Assurance of learning

Assurance of Learning means that universities take responsibility for creating, monitoring and updating curriculum, teaching and assessment so that students graduate with the knowledge, skills and attributes they need for employability and/or further study.

At Bond University, we carefully develop subject and program outcomes to ensure that student learning in each subject contributes to the whole student experience. Students are encouraged to carefully read and consider subject and program outcomes as combined elements.

Program Learning Outcomes (PLOs)

Program Learning Outcomes provide a broad and measurable set of standards that incorporate a range of knowledge and skills that will be achieved on completion of the program. If you are undertaking this subject as part of a degree program, you should refer to the relevant degree program outcomes and graduate attributes as they relate to this subject.

Find your program

Subject Learning Outcomes (SLOs)

On successful completion of this subject the learner will be able to:
  1. Demonstrate knowledge of basic theorems of exchange rate determination, interest rates and inflation and the role of arbitrage in keeping the foreign exchange market efficient.
  2. Apply knowledge of foreign exchange hedging to identify and manage the foreign exchange risks faced by globally active firms.
  3. Demonstrate the ability to select global financing strategies and propose solutions that will take advantage of opportunities in the global financial markets to the benefit of relevant stakeholders.
  4. Demonstrate the ability to deliver an effective oral presentation with appropriate visuals.
  5. Demonstrate the ability to produce a clear and concise written report that demonstrates higher order understanding of key concepts in international finance.
  6. Demonstrate the ability to work in a team setting to coordinate analysis of a case study to arrive at a sound financial decision regarding an issue in capital raising and international valuation.

Assessment

Assessment details

TypeTask%Timing*Outcomes assessed
Class Participation Classroom Contribution Designed to encourage preparation and discussion of the cases as determined by the instructor and peer assessors. Mid-semester feedback will be provided. 20% Ongoing 1, 4.
Case Report § Partner case study report. Two-page written report (plus exhibits) for in-depth foreign exchange risk hedging case prepared with a partner of your choosing. 10% Week 5 1, 2, 3, 4, 5, 6.
Case Report Individual Case Study Report. Two-pages written report (plus exhibits) for in-depth international capital raising case. 10% Week 9 1, 3, 5.
Case Presentation § Team Case Study Presentation. Formal presentation (10-15 minutes) with visuals to support your team’s position on the pricing of the IPO. A peer evaluation system will be used to assess the performance of each group member during the project. 10% Week 12 1, 2, 3, 4, 5, 6.
Case Report § Team Case Study Report. Two-pages written report (plus exhibits) for in-depth qualitative and quantitative analysis for an international initial public offering (IPO). A peer evaluation system will be used to assess the performance of each team member during the project. 10% Week 12 1, 2, 3, 4, 6.
Paper-based Examination (Closed) Mid-semester examination consisting of short answer, calculations, quantitative and qualitative analysis to support recommendations. 40% Week 7 (Mid-Semester Examination Period) 1, 5.
  • § Indicates group/teamwork-based assessment
  • * Assessment timing is indicative of the week that the assessment is due or begins (where conducted over multiple weeks), and is based on the standard University academic calendar
  • C = Students must reach a level of competency to successfully complete this assessment.

Assessment criteria

High Distinction 85-100 Outstanding or exemplary performance in the following areas: interpretative ability; intellectual initiative in response to questions; mastery of the skills required by the subject, general levels of knowledge and analytic ability or clear thinking.
Distinction 75-84 Usually awarded to students whose performance goes well beyond the minimum requirements set for tasks required in assessment, and who perform well in most of the above areas.
Credit 65-74 Usually awarded to students whose performance is considered to go beyond the minimum requirements for work set for assessment. Assessable work is typically characterised by a strong performance in some of the capacities listed above.
Pass 50-64 Usually awarded to students whose performance meets the requirements set for work provided for assessment.
Fail 0-49 Usually awarded to students whose performance is not considered to meet the minimum requirements set for particular tasks. The fail grade may be a result of insufficient preparation, of inattention to assignment guidelines or lack of academic ability. A frequent cause of failure is lack of attention to subject or assignment guidelines.

Quality assurance

For the purposes of quality assurance, Bond University conducts an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.

Study information

Submission procedures

Students must check the [email protected] subject site for detailed assessment information and submission procedures.

Policy on late submission and extensions

In fairness to your classmates, case reports cannot be accepted after the class discussion of that case. With instructor permission, an alternative assignment will be provided in situations where the deadline cannot be met.

Policy on plagiarism

University’s Academic Integrity Policy defines plagiarism as the act of misrepresenting as one’s own original work: another’s ideas, interpretations, words, or creative works; and/or one’s own previous ideas, interpretations, words, or creative work without acknowledging that it was used previously (i.e., self-plagiarism). The University considers the act of plagiarising to be a breach of the Student Conduct Code and, therefore, subject to the Discipline Regulations which provide for a range of penalties including the reduction of marks or grades, fines and suspension from the University.

Bond University utilises Originality Reporting software to inform academic integrity.

Feedback on assessment

Feedback on assessment will be provided to students within two weeks of the assessment submission due date, as per the Assessment Policy.

Disability support

If you have a disability, illness, injury or health condition that impacts your capacity to complete studies, exams or assessment tasks, it is important you let us know your special requirements, early in the semester. Students will need to make an application for support and submit it with recent, comprehensive documentation at an appointment with a Disability Officer. Students with a disability are encouraged to contact the Disability Office at the earliest possible time, to meet staff and learn about the services available to meet your specific needs. Please note that late notification or failure to disclose your disability can be to your disadvantage as the University cannot guarantee support under such circumstances.

Additional subject information

A peer-evaluation system will be used in this subject to help determine the individual marks for all group assessments. As part of the requirements for Business School quality accreditation, the Bond Business School employs an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.

Subject curriculum

An introduction to the larger environment in which businesses operate. Consideration of the notion that both successful multinational and domestic firms must manage the risks and take advantage of opportunities in the global financial markets.

Reviews the fundamentals of the foreign exchange market, the world’s largest and most efficient market. Also highlights the importance of arbitrage in establishing and maintaining the properties of this market and applying this knowledge to convert currencies and measure the impact of bid-ask spreads. The use of Bloomberg to build cross-exchange tables and extract real-time and historical exchange rate data is also introduced.

Examines the progression of exchange rate regimes in Australia to gain an appreciation of why Australia (and most developed countries) have floating exchange rates. Also explores the impact of trade imbalances on inflation under Gold Standard, Bretton Woods and Floating Exchange Rate regimes.

Introduces an analytical framework for understanding the macroeconomic environment of global finance. The theoretical and applied perspectives of international parity conditions (i.e., interest rate parity and purchasing power parity) are contrasted to gain insight into solving real-world problems using the logic underlying arbitrage and the "Law of One Price".

Explores the qualitative and quantitative components of country risk including political, financial, and economic. A case study of a firm operating in an unstable country is introduced to assess the impact on the firm and explore potential solutions.

An overview and comparison of the different types of foreign exchange risk: transaction, translation and operational exposure for a variety of firms and situations.

Demonstrates the application of an array of financial instruments and tools (e.g., forwards, futures, options, swaps and money market hedges) using examples and an in-depth case study.

Explores a variety of structured finance products including securitised asset-backed securities, collateralised debt obligations and credit derivatives (e.g., credit default swaps, currency swaps and interest rate swaps). Considers how the nature of the swap market has changed with its evolution and expansion.

Introduces the diverse sources of funding available from the international financial markets. This includes consideration of the advantages and disadvantages of domestic versus foreign sources, public versus private sources, international debt versus international equity, foreign bonds, Eurobonds, Sukuk bonds, cross-listing and the three levels of American depository receipts.

Explore current topics in international finance including Islamic finance, sovereign wealth funds and other relevant international finance issues.

An examination of cross-border and multi-currency security pricing and issuance in the global markets within the context of initial public offerings (IPOs), leveraged buyouts and/or joint ventures) in international or cross-border settings. An IPO Roadshow role play provides a context to summarise and integrate the central themes of the subject overall.

Approved on: Nov 11, 2019. Edition: 3.5