BADM 650 International Financial Management Spring
2007
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Instructors: |
D. Sykes Wilford (W.) and Stephen J. Silver (S.) |
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Office: |
Bond Hall Room 271 (W.) and 358 (S.) |
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Phones: |
(953-5163 (S.); 953-5056 (department); 953-6764 (fax) |
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email: |
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Office Hours: |
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Class Meeting: |
Class meets Th |
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Prerequisites: |
BADM 604 and BADM
605 |
Text and Materials:
All students will benefit by having a financial calculator and knowing how to use it. We have also included hyperlinks to Financial Tables at the bottom of the syllabus. All students will also need to have a working email address and Internet access.
Course Description:
A study of broad international financial topics to include and understanding of: financial markets and how they work; using financial markets and various instruments to guard against the risks of doing business globally; and how to manage international portfolios.
Course Objectives:
To build upon skills, knowledge and techniques acquired from previous courses by increasing the depth and breadth of theoretical understanding and practical application.
To add new skills, knowledge and techniques not covered in previous courses.
Conduct of Class:
This class will concentrate on the application of financial concepts and techniques to problem solving and decision making. All students are expected to come to class prepared to engage in discussion of the scheduled topic for the day. Effective class participation includes both quantity and quality of input.
Exams and Quizzes:
There will be two exams, a midterm and a final. Each exam will be administered in class) comprehensive to the material covered up to the time of the exam. The tentative dates are given on the syllabus.
Homework:
While any homework assignments will not be graded, these are useful for preparing for the exams. Furthermore, homework is fair game for class discussion and may be taken for a grade.
Presentation:
More on this will be provided under separate cover.
Grading:
Grading will be on a standard 10-point scale to include a B+ and C+ based on the following criteria:
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Grade |
A |
B+ |
B |
C+ |
C |
F |
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Minimum Percentage |
90 |
85 |
80 |
75 |
70 |
Below 70 |
Numeric grades will be rounded according to the rule that a portion of ˝ or greater rounds up
Grade will be determined by the following proportions.
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Grade Element |
% of Grade |
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Homework |
25% |
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Midterm Exam |
25% |
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Presentation |
25% |
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Final Exam |
25% |
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Total |
100% |
Attendance:
Attendance is mandatory for all classes. Students are responsible for all material, announcements, etc that take place in class whether in attendance or not. It is the instructor’s default policy to not accept late assignments. However, as long as lateness does not become habitual, an assignment may be accepted late (with a reasonable excuse as to why it is late) and will be automatically assessed a 20 point penalty for being late if it is turned in before the next class meeting after the assignment was originally due. It is the student’s responsibility to keep current on all assignments that are submitted for a grade. It is also the instructor’s default policy to return graded work in class only once, after that, it will be the student’s responsibility to pick up all graded work in the instructor’s office.
Academic Dishonesty:
Cases of academic dishonesty will not be tolerated. All students are expected to abide by The Citadel honor code. Instances of cheating will result in an F for the course and the student being remanded to the college’s administration for action. Cheating is generally defined as receiving help on work that is intended to be individual work. I am a big proponent of collaborative learning, but also believe that sometimes, you need to demonstrate what you know yourself. When in doubt as to whether collaboration is permitted, please ask.
Changes:
This syllabus and course outline represents the instructors’
initial plan and is subject to change without notice at the sole discretion of
the instructor.
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Lecture |
. Topical
Coverage |
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Homework |
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Lecture
1: Jan. 11 |
Why the
world is different: Gold Standard, War
Years, Bretton Woods, Flexible Exchange Rates,
Politics and Monetary Policy, Demographics, Present System issues,
Explanation of systems with the historical discussion simultaneously done |
PPT: Presentation
1 |
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Lectures
2 and 3 Jan. 18,
25 |
Balance of Payments, Monetary Policy and Reserves, Monetary approach to the Balance
of Payments, Trade balances, current account, relative prices, Monetary
approach to exchange rate determination, Forecasting exchange rates (why one
should not try), Reserve Country issues, How the Gold Standard actually would
work, Taxation and Trade, China, India, Trade and the exchange rate for the
reserve currency, Property rights and their importance in exchange rate
determination, Investment expectations, risk, and exchange rates |
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Lecture
4: Feb. 1 |
Discussion
of the Basics of Capital Markets: Discounted Cash Flows, Revisiting exchange
rate calculations, Forwards and Interest, Arbitrage – Fisher Parity,
Arbitrage versus Economic determination of prices, The Central Banks and
interest rate policies, Forward Rates |
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Lecture
5: Feb. 8 |
Forwards
and futures: Basics of Forward contracts, Forward-forward contracts, Workshop
on Forwards, The Basics of Risk Management and the forward contract The building
block introduction: Futures Contracts and their relationship to forwards,
Financial instruments as zeros and forwards |
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Lecture 6: Feb. 15 |
Swaps and Risk Management: Swaps contracts, Bonds as combinations of zeros and swaps, Linear Risks, Duration Workshop
in Risk Management |
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Lecture
7: Feb. 22 |
Non-linear
Risks: Basics of Option Theory: Understanding
the pricing of an option, Exchange
Rate Risks and Options, Put-Call Parity |
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Midterm
Exam Mar.1 |
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Lecture
8: Mar. 8 |
Forwards, Futures, Swaps, and Options: Creating financial
instruments using the building blocks, International Bonds as zeros,
forwards, swaps and options, Thinking about imbedded options, Risk management
Concepts |
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Lecture
9: Mar. 15 |
International Portfolio Management Concepts: History
is a bad forecaster, Markowitz, Global market
place, Stacking Trades versus building a portfolio, Theory and Practice |
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Lecture
9: Mar. 22 |
History
of Risk Management Development: Risk
Management Concepts, Value at Risk, Monte Carlo Simulations |
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Lecture
10: Apr. 2 |
Project
Presentations |
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Lecture
11: Apr. 5 |
Risk, Economic
Systems, and Capital Markets: Risk Management, Integrating knowledge of the
Financial System and Risk, Using different Risk Management Techniques, LTCM
Crisis |
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Lecture
12: Apr. 12,
19 |
Review and catching up |
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Final
Exam Apr. 26 |
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Financial Tables:
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Future Values of a: |
Present Values of a: |
CSBA Student
Code
CIVILITY
I
will treat classmates, professors, and CSBA
staff with respect. I will display a healthy tolerance
for individual differences in demographics, gender,
race, religion, and thought. I will respect the
authority, rules, and regulations of The Citadel.
SCHOLARSHIP
I
will continue to develop and demonstrate a passion
for learning. I will be intellectually honest.
BEHAVIOR
My
behavior will be professional and ethical and
will be reflected in my preparation for class, my
attendance in class, my conduct in class, and my
relationships within the CSBA community.
ATTITUDE
My
attitude will reflect teamwork, personal
responsibility, and a positive approach to being a
member of the class.