International Finance

International Finance
Hours: 45
Prerequisites: none
Instructor name: Jorge Colvin, Ph.D.
E-mail: jcolvin@nebrija.es
Office hours: to be communicated the first day of class

 

1. Course Description
Presumed an understanding of basic corporate finance, this course is organized to provide a background on the international environment with a focus on the important role of modern multinational corporations in global commerce. Using a strong corporate perspective, it discusses a wide range of managerial topics and emphasizes the most recent changes in the international environment.

2. Learning Objectives
Students who successfully complete this course will be able to:

•  Demonstrate their knowledge of International Finance
• Think critically and deal with challenging questions, problems and cases
• Demonstrate awareness of their role in the international finance management
• Use information to recognize opportunities, implement strategies, and manage the risk
• Use knowledge to develop relevant solutions

3. Formative Activities
Educational activities will be developed by means of different didactic strategies:

• Theory and Practice
• Collective and individual tutoring
• In-class presentations
• Team work assignments
• Workshops and additional training

4. Methodology
The course syllabus follows the Communicative Approach methods, based on the core principles of procedure conception and constructive acquisition of knowledge. The methodology is based on the teaching-learning procedures, focused on the learner, which encourages active participation and results in the development of general and specific competencies that provide knowledge, capacities and attitudes for their future professional careers.

5. Evaluation
The form of assessment is based on the core principles of the educational assessment, i.e., an active and  participative teaching-learning process focused on the learner. The instructor uses numerous and differentiated forms of assessment to calculate the final grade received for this course. For the record, these are listed below. The content, criteria and specific requirements for each assessment category will be explained in greater detail in class.

5.1. Grading system
In the Spanish educational system, it is required to quantitatively express the result of each student’s evaluation. In order to do so, Nebrija faculty uses different strategies and instruments such as: papers, exams, tests, projects, self-evaluation activities, etc. In order to issue a final grade for the Spanish Plus programs the following scale is established:

• 33 % Attendance and active participation in class
• 33% Daily work
• 34% Exams/papers/projects

Therefore, the final grade is the average between attendance and participation, daily work and exams, presentations, projects and essays.
Active participation in class is evaluated by means of different activities such as:

• Activities and exercises correction;
• Reflection upon the different contents in the course
• Oral activities (individual, in pairs or in groups). Fluency, correction, adequacy and relevance are taken into account.
• Daily work makes reference to any activity or task that is done inside or outside of the classroom, whether during the class time or at any other time.
• Exams/papers/projects

The course includes a midterm and a final written exam on theoretical concepts and course facts. Also, two projects will be elaborated, both including an oral presentation in front of the class. If a student, unjustifiably, does not do or submit an exam, paper or project, it will be graded with a ‘0’.

 

5.2. Attendance, participation and grading policies

5.2.1. Attendance policy
Attendance is mandatory. In case of missing 5 or more sessions in one course, the student will receive a zero in his/her participation and attendance grade. In addition, not attending classes will not excuse the student from handing in in any homework, papers or essays previously assigned.

The following situations must be considered:

• Each session of class will count as an absence.
• Two delays of more than 15 minutes will be considered an absence. The entrance to class will not be allowed after 30 minutes once it has started.
• There are no excused absences. E.g.: Not attending class because of sickness will count as an absence. The student is responsible for catching up with any homework done while absent.
• Exams dates have been officially approved by the University, therefore, they will not be changed.*

*Except for those courses where the professor will set up specific dates and inform the students at the beginning
of the program.

 

5.2.2. Criteria to evaluate participation
The student participates very actively in the class activities. S/he
successfully does the requested tasks. S/he contributes to a good
development of the course, encourages his/her classmates and favor
debate in class.
8.5 - 10

The student participates actively in the class activities. S/he does the
requested tasks and submits them on time. Shows great interest to learn.
7 - 8.4

The student, occasionally, makes interesting remarks, but s/he basically
answers when s/he is asked. S/he does not show a clear interest in the
course. Misses classes occasionally.
5 - 6.9

The student does not participate unless s/he is asked. S/he has unjustified
absences and delays. His/her attitude is not very participative.
0 - 4.9

 

5.2.3. Criteria to evaluate Daily Work
The student always does all the work demanded by the professor, not
only during the class but also at home. He/she always or almost always
meets the deadlines established.
8.5 - 10

The student almost always does all the work demanded by the professor,
not only during the class but also at home. Occasionally, he/she submits
work after the established deadline.
7 - 8.4

The student occasionally does the work demanded by the professor, not
only during the class but also at home. He/she does not normally meet
the established deadlines and even occasionally does not submit the
work.
5 - 6.9

The student never or almost never does the work demanded by the
professor. He/she never or almost never meets the established deadlines.
0 - 4.9

5.3. Warning on plagiarism
When writing a University paper or essay and reference is made to certain authors, it is mandatory to cite them by means of a footnote or a direct reference. In no case it is acceptable that a student uses a text, no matter how brief it is, written by somebody else without putting it in inverted commas, as this means s/he is trying to make it look as his/her own. This is called plagiarism and in a university context it could be penalized with expulsion.

6. Course Content

WEEK 1:

-Introduction
-The International Financial Environment
READINGS: Ranger Supply company – Motivation for International Business

WEEK 2 :

-International Flow of Funds
-International Financial Markets
READINGS: Savanta Company – Assessing the Effect of Possible Trade Barriers

WEEK 3:

-Exchange Rate Determination
-Currency Derivatives
READINGS: Gretz Tool Company – Using International Financial Markets

WEEK 4:

-Exchange Rate Behavior
-Government Influence on Exchange Rates
READINGS: Capital Crystal, Inc. – Using currency Futures and Options

WEEK 5:

-International Arbitrage and Interest Rate Parity
-Relationships among Inflation, Interest Rates, and Exchange Rates
READINGS: Hull Importing Company – Effects of Intervention on Import Expenses

WEEK 6:

-Exchange Rate Risk Management
-Forecasting Exchange Rates
READINGS: Whaler Publishing Company– Forecasting Exchange Rates

WEEK 7:

Mid-Term Review & Mid-Term Exam

WEEK 8:

-Measuring Exposure to Exchange Rates Fluctuation
-Managing Transaction Exposure
-Managing Economic Exposure and Translation Exposure
READINGS: Crayson Co. – Using Covered Interest Arbitrage

WEEK 9:

-Long-Term Asset and Liability Management
-Direct Foreign Investment
READINGS: Flame Fixtures, Inc. –Business Application of Purchasing Power Parity

WEEK 10:

-Multinational Capital Budgeting
-International Corporate Governance and Control
READINGS: North Star Company – Capital Budgeting

WEEK 11:

-Country Risk Analysis
-Multinational Cost of Capital and Capital Structure

READINGS: King, Inc. – Country Risk Analysis

WEEK 12:

-Long-term Debt Financing
-Short-Term Asset and Liability Management
READINGS: Devil Corporation – Long-Term Debt Financing

WEEK 13:

-Financing International Trade
-Short-Term Financing
READINGS: North Star Company – Capital Budgeting

WEEK 14:

Group Case Presentations & Final Exam

 

7. Bibliography
Madura, Jeff: International Financial Management 13th Edition 2018.

 

8. Lecturer Brief CV
Jorge Colvin, Ph.D.
Ph.D. in Business Administration and Management from the Antonio de Nebrija University. Diploma in
Business Management (PDD) by IESE (University of Navarra). Master’s degree in Stock Exchange and
Financial Markets by the IEB (Institute of Stock Market Studies). In addition to being a professor at the
Nebrija Business School and the Nebrija University, he is currently a professor in the area of Finance and
Accounting at the American University Schiller International University (SIU) among other universities.
As a researcher, he has developed several academic collaborations with IESE, as well as publications in
several scientific journals. He has over 15 years of professional experience in leading companies in its sector
such as PricewaterhouseCoopers (supervisor -audit manager), KPMG and Codere Group. The latter being
responsible for mergers and acquisitions for Spain and member of the Presidency. He is currently a
Presidency advisor to Spanish multinational companies, as well as several investment banks in mergers and
acquisitions and business angel operations by IESE.

*Course content subject to change. Please contact your ISA Site Specialist for more information.