Class History: International Financial Management (Summer 2018)
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.