TRINITY WESTERN UNIVERSITY

MBA 680C

International Finance and Global Capital Market

Spring 2023

Instructor: Dr. Liping Zhang, CFA

Contact Information: [email protected]

Semester Hours: 3 semester hours

Course Description

This course is designed to develop a critical managerial perspective on key financial management issues confronting firms operating in a global environment. Through developing an understanding of financial markets, systems, and institutions, students will address a wide range of topics including equity, debt, foreign exchange, and credit instruments, as well as the principal derivative products. In a step-by-step fashion, making extensive use of real-world cases and examples, students will engage in such topics as: money markets, foreign exchange, bond markets, cash equity markets, equity valuation techniques, swaps, forwards, futures, credit derivatives, options, option risk management and convertible bonds.

Course Learning Outcomes

1. Knowledge and its Application

· demonstrate in‐depth knowledge of a particular field of study and/or profession

· demonstrate ability to apply knowledge and discipline specific methodology to solve unique problems

· demonstrate superior ability to identify and interpret new ideas and research in a specific discipline

· demonstrate superior skills in academic research, writing, and communication act as skilled practitioners to move beyond knowledge into practice

2. Complexity

· show ability to carry out discourse and research as an active member of a discipline

· demonstrate the ability to “undertake inquiry and analysis, to solve problems with a high degree of innovation, divergent thinking and risk taking”

· give evidence of integrating knowledge and applying the knowledge across disciplinary boundaries

· give evidence of originality in the application of knowledge (master’s) and undertaking of research (doctoral)

3. Inter‐and intra‐personal Wellness

· demonstrate a holistic awareness of their personhood, purpose, and calling within the context of the communities in which they live and study

· demonstrate an appreciation of the role of community in wellness.

· demonstrate increased professional capacity and autonomy

· demonstrate superior organizational and time management skills

· demonstrate academic and personal integrity

4. Aesthetic Expression and Interpretation

· consider and practice creative engagement and interdisciplinary thinking

· demonstrate the ability to engage in a dynamic educational environment within which intellectual and imaginative products are brought into relation with the most pressing human issues of our time

5. Social Responsibility and Global Engagement

· demonstrate the ability to analyze, appraise and evaluate their discipline in a social context

· develop the ability to become socially responsive agents with a commitment to understanding global issues

6. Leadership

· demonstrate high level innovative expertise, collaborative knowledge and the capacity to inspire others and achieve results

· demonstrate academic proficiency to communicate effectively and to enter into conversation and constructive dialogue with others

· demonstrate integrity and humility in all matters

Course Learning Objectives

·

Course Learning Outcomes	SLO
At the end of the course, students should have the knowledge and skills to:
1	study the concepts, techniques, facts, and theories that are critical to multi-nationals	1,2
2	gain a global understanding of international financial management and accounting	1,2
3	demonstrate their understanding by applying the learned materials to currently existing multi-nationals, and/or by completing various research papers, in class case presentations and quizzes	2,3,5,6
4	Demonstrate scriptural knowledge that relates to specific areas covered within a global enterprise in regard to their financial and accounting matters.	3,4,6

Required Texts and Materials

The Holy Bible, New International Version: Study Bible. Grand Rapids: Michigan.

Cheol Eun and Bruce Resnick (2014). International Financial Management: 7th edition.

More specific reading requirements are under each module outline.

Course Evaluation and Schedule

Prep reading (Feb 2nd-Feb 22nd) 10%

Students are expected to preview the readings under each module and post their understandings, thoughts related news, and/or applications about the 12 “prep concepts” listed under each module (Page 6-7 of this syllabus; minimum half-page, single space per concept and due on Feb 22nd).

35 hours’ residency (Feb 23rd– Mar 4th )

Case Study Presentation 6% x 4=24%

This part will be group effort and groups will be assigned. You are strongly encouraged to get started on the cases prior to our class.

The case description can be found as part of Course Outline on page 6-7 of this syllabus. Only one reference reading is provided to encourage more diverse research angles from the students’ side. Your group is expected to submit a PPT file and present on every case . The order of the presentation will be determined on the first day of class.

Pop Quizzes 10%

Pop quizzes should be expected during the course based on lectures/discussions to motivate 100% presence in class.

Final Exam 28%

Two-hour closed-book exam on the main topics of class discussion will be given at the end of the residency.

Post-course project (due date is April 16th, 2023) 28%

Minimum 10 pages. Choose a MNC which has gone through an international stock market financing or international public debt market financing in the past 5 years, conduct a comprehensive analysis on the decision making rational and provide an in-depth discussion about the related financial/business environment.

*APA Format

Anywhere between 10-20% of each assignment mark should be allotted for grammar, writing style, and proper APA referencing. A paper that does not adhere to APA (formatting & references) or does not communicate ideas clearly should fall within the B range.

*Any changes to this schedule will be announced in class or on Moodle.

6 | Page MBA680

MBA GRADING SYSTEM – Effective June 2007

In an effort to ensure consistency in the MBA assignment of grades and to inform graduate students of assessments of the quality of work at the graduate level, the following interpretation of grades in assignments and courses offers a guideline:

Letter Grade	%	Grade Point Value	Meaning in Graduate Work Note: For assignments that meet criteria in several categories, instructors will assign an average grade.
A+	95-100	4.3	Exceptionally well-reasoned, compelling development of position. Outstanding incorporation of personal vision as well as of references and resources. Strikingly appropriate examples. Extraordinary insight, critical analytical and evaluative ability, and creativity. Superlative style and language usage. Makes an original contribution and is potentially publishable.
A	90-94	4.0	Well-argued and convincing development of position. Insightful incorporation of personal vision as well as of references and resources. Notably appropriate examples. Excellent insight, critical analytic and evaluative ability, and creativity. Impressive style and language use.
A-	85-89	3.7	Thorough and plausible development of position. Skillful incorporation of personal vision as well as of references and resources. Very good examples. Very good insight, analytic and evaluative ability, and creativity. Commendable and fluent style and language usage.
B+	80-84	3.3	Proficient development of position. Appropriate incorporation of personal vision as well as of references and resources. Relevant examples. Good quality insight, analytic and evaluative ability, and creativity. Clear and correct style and language usage.
B	75-79	3.0	Competent development of position, but possibly with some gaps and/or limitations. Satisfactory incorporation of personal vision as well as of references and resources. Satisfactory examples. Reasonable insight, analytic and evaluative ability. Little creativity. Generally satisfactory style and language usage, but possibly with some minor flaws.
B-	70-74	2.7	Passable but unimpressive development of position. Position not completely consistent with personal vision or references and resources not taken fully into account or examples are basic or not completely convincing or barely acceptable insight and analytic and evaluative ability. Adequate style and language usage, but with weaknesses in some respects (e.g., clarity, coherence, grammar). Overall quality shows noticeable deficiencies.
C	<70	2.0	Unacceptable work at graduate level. Shows lack of understanding and/or competence in several of the criteria described above. This grade is a failing grade at the graduate level, and students receiving a “C” course grade are required to retake the course.

Other Designated Grades

P = Pass (not calculated into cumulative GPA).

F = Failure (below 70%). Used in pass/fail courses.

INC = Incomplete. A grade may be incomplete if assignments remain outstanding in a course or if the instructor has not yet submitted a grade. If assignments remain outstanding at the end of a course, students must obtain and complete an incomplete grade form from Enrolment Services.

W = Withdrew. This grade is assigned for students withdrawing during the first half of the course.

WP/WF = Withdrew passing/Withdrew failing. These grades are assigned to students withdrawing during the second half of a course. Grades are not computed into the cumulative GPA. A student may withdraw from a course only because of severe extenuating circumstances and if approval is granted by the Program Director and the Dean of Graduate Studies.

Course Outline

Module One – Introduction to the International Financial Environment & the Determination of Exchange Rates

Readings: Chapter 1-3

Identify and contrast the major markets that facilitate international business. Describe relationships between exchange rates and economic variables, and explain the forces that influence these relationships. Our focus will be on international trade, financial system, monetary policy, and capital flows.

Prep Concepts: Functions of money; Monetary policy; Floating exchange rate.

Case 1a: The EURO (understanding about its history, uniqueness, role, strength, challenges, and future)

Reference: https://www.economist.com/leaders/2019/01/03/the-euro-still-needs-fixing

Case 1b: The trend of legal tender? (Bitcoin, legal tender, and El Salvador)

Reference: https://www.thestreet.com/phildavis/news/bitcoin-will-soon-be-legal-tender-in-el-salvador-heres-what-that-means

Module Two –International Money Market, Bond Market and Equity Market:

Reading: Chapter 11-13; International financial markets, Madura, 2014

Building on the understandings of time value of money, pricing of bonds and stocks, an overview of global capital market will be discussed to help students to understand how capital could be moved efficiently across national borders to meet demand in other parts of the world.

Prep Concepts: Time value of money; Foreign bond; Yield to maturity

Case 2: China Evergrande debt-crisis

Reference: https://www.wsj.com/articles/china-evergrandes-debt-crisis-fallout-losses-layoffs-and-more-defaults-11665651773

Module Three – Foreign Exchange Transactions and Risk Management:

Reading: Chapter 5-7; https://www.theseus.fi/bitstream/handle/10024/104281/Vitalie+Antoci+-+Transaction+Exposure.pdf?sequence=1

Introduce three primary types of derivative contracts: Forwards vs Futures vs Options to equip students with an understanding about how these contracts work and thus used as hedging tools. Then we will have a dialogue on foreign exchange risk management for multinational corporations and how to use money market and derivative market to manage the risk.

Prep Concepts: Futures; Options; Hedge in Finance

Case 3: Propose and present on the detailed strategies for any MNC of choice of risk hedging (Your choice: either foreign exchange risk or oil risk).

Reference: https://www.wsj.com/articles/companies-warn-currency-swings-will-weigh-on-earnings-1533115800

https://www.bloomberg.com/news/articles/2021-11-05/airlines-are-hedging-against-higher-oil-prices-again

Module Four- International Taxation and Capital Budgeting

Readings: Chapter 16-19, and 21

Based on the solid understanding of international tax planning, discuss financing decisions with international bonds, equity and hybrids; cost of capital. Synthesize and evaluate options for the management of long-term assets and liabilities, including motives for direct foreign investment, multinational capital budgeting, country risk, analysis, and capital structure decisions.

Prep Concepts: Capital budgeting; Net present value; CAPM(capital asset pricing model)

Case 4: Please provide a detailed discussion on why BMW chose Hungary over Slovakia to build its new plant in 2018 AND updates.

Reference: https://www.reuters.com/article/us-bmw-production-factory/bmw-to-build-1-billion-euro-car-factory-in-hungary-idUSKBN1KL12X

Course Policies

ACADEMIC INTEGRITY AND AVOIDING PLAGIARISM AT TWU

One of the core values of Trinity Western University is the integration of academic excellence with high standards of personal and moral integrity. The University considers it a serious offence when an individual attempts to gain unearned academic credit. It is the student’s responsibility to be informed about what constitutes academic misconduct. For details on this, and on identifying and avoiding plagiarism go to the University Homepage > Academics > Academic Calendar (p. 47).

https://prezi.com/od62fxnkbmxh/plagiarism‐how‐to‐get‐it‐out‐of‐your‐life/ (Prezi presentation)

http://bit.ly/1p00KX3 (Google Slide presentation offering more comprehensive information)

STUDENTS WITH A DISABILITY

Students with a disability who need assistance are encouraged to contact the Equity of Access Office upon admission to TWU to discuss their specific needs. All disabilities must be recently documented by an appropriately certified professional and include the educational impact of the disability along with recommended accommodations. Within the first two weeks of the semester, students must meet with their professors to agree on accommodations appropriate to each class. Students should follow the steps detailed by the Equity of Access Office on their website at: http://www.twu.ca/student‐life/student‐success/disabilities‐and‐equity‐access.

HOSPITALITY IN THE CLASSROOM

TWU is committed to an ethic of inclusion centered on the principles of hospitality, reciprocity and reconciliation. We seek to cultivate generous learning spaces that are based on respect for differences and are open to diverse views, opinions, and identities that are thoughtfully expressed in a collegial manner. We welcome and value all voices, including those from under‐ represented groups or those who have been marginalized.

The following policies are optional but recommended, to allow you to efficiently respond to student challenges to the syllabus. Click on these fields and press delete if you do not wish to use them:

CAMPUS CLOSURE AND CLASS CANCELLATION POLICY

In the event of extreme weather conditions or other emergency situations go to the https://www.twu.ca/campus‐notificatio n.

FINAL EXAMINATIONS

Click here and type or use the following excerpt from the Academic Calendar below

“A student who is absent from a final examination without an acceptable excuse will be assigned a zero for that examination. Absence due to illness must be supported by a medical certificate indicating the nature of the illness. If an examination is missed for any reason, including illness, the student must notify the faculty member prior to the examination and the Office of the Registrar within 48 hours of the missed examination, giving written documentation explaining the absence.” 2022‐23 Academic Calendar

LATE ASSIGNMENTS POLICY

Assignments handed in late, without prior approval, will receive a penalty of 10% each day, and will not be accepted after 4 days past the due date.

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