FINC3011: Semester 1, 2023

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Units FINC3011 Semester 1 2023 [Normal day]

Unit of study_

FINC3011: International Financial Management

Semester 1, 2023 [Normal day] - Remote

Overview

Markets are increasingly globalised. There are very few businesses or industries that are not required to deal with issues such as foreign currency, foreign competition and direct investment. This unit is designed to allow students to extend their understanding of basic principles in finance to an international environment. Globalisation of markets introduces risks but also opens up profitable opportunities. Topics covered include: foreign currency valuation and markets; international parity conditions; measuring and managing foreign exposure; international portfolio management; capital budgeting and foreign direct investment; international tax management and international financing strategy.

Unit details and rules

Unit code	FINC3011
Academic unit	Finance
Credit points	6
Prohibitions ?	None
Prerequisites ?	FINC2012
Corequisites ?	None
Assumed knowledge ?	None
Available to study abroad and exchange students	Yes

Teaching staff

Coordinator	Doowon Lee, doowon.lee@sydney.edu.au
Lecturer(s)	Doowon Lee, doowon.lee@sydney.edu.au

Type	Description	Weight	Due	Length
Supervised exam ?	Final exam Closed book	50%	Formal exam period	2 hours
Outcomes assessed:
Supervised test ?	Mid-semester exam Closed book	20%	Week 06 Due date: 01 Apr 2023 at 14:00	1 hour
Outcomes assessed:
Assignment	Group assignment Written report	30%	Week 11 Due date: 14 May 2023 at 23:59	10 A4 pages
Outcomes assessed:
= group assignment ?

Assessment summary

Mid-semester exam: The mid-semester exam will cover the topics studied during weeks 1 to 5 inclusive. The mid-semester exam will be closed book and a non-programmable calculator will be allowed. Details of the format for the mid-semester exam will be provided on Canvas.
Group assignment: Students will work in groups of 3 or 4 members to write a report on a company’s foreign currency hedging or international financing practices. Instructions and marking criteria for the report will be provided on Canvas.
Final exam: The final exam will cover the topics studied throughout the semester. The final exam will be closed book and a non-programmable calculator will be allowed. Details of the format for the final exam will be provided on Canvas.

Assessment criteria

The University awards common result grades, set out in the Coursework Policy 2014 (Schedule 1).

As a general guide, a high distinction indicates work of an exceptional standard, a distinction a very high standard, a credit a good standard, and a pass an acceptable standard.

Result name	Mark range	Description
High distinction	85 - 100	Awarded when you demonstrate the learning outcomes for the unit at an exceptional standard, as defined by grade descriptors or exemplars outlined by your faculty or school.
Distinction	75 - 84	Awarded when you demonstrate the learning outcomes for the unit at a very high standard, as defined by grade descriptors or exemplars outlined by your faculty or school.
Credit	65 - 74	Awarded when you demonstrate the learning outcomes for the unit at a good standard, as defined by grade descriptors or exemplars outlined by your faculty or school.
Pass	50 - 64	Awarded when you demonstrate the learning outcomes for the unit at an acceptable standard, as defined by grade descriptors or exemplars outlined by your faculty or school.
Fail	0 - 49	When you don’t meet the learning outcomes of the unit to a satisfactory standard.

For more information see sydney.edu.au/students/guide-to-grades.

For more information see guide to grades.

Late submission

In accordance with University policy, these penalties apply when written work is submitted after 11:59pm on the due date:

Deduction of 5% of the maximum mark for each calendar day after the due date.
After ten calendar days late, a mark of zero will be awarded.

Academic integrity

The Current Student website provides information on academic integrity and the resources available to all students. The University expects students and staff to act ethically and honestly and will treat all allegations of academic integrity breaches seriously.

We use similarity detection software to detect potential instances of plagiarism or other forms of academic integrity breach. If such matches indicate evidence of plagiarism or other forms of academic integrity breaches, your teacher is required to report your work for further investigation.

You may only use artificial intelligence and writing assistance tools in assessment tasks if you are permitted to by your unit coordinator, and if you do use them, you must also acknowledge this in your work, either in a footnote or an acknowledgement section.

Studiosity is permitted for postgraduate units unless otherwise indicated by the unit coordinator. The use of this service must be acknowledged in your submission.

Learning support

Simple extensions

If you encounter a problem submitting your work on time, you may be able to apply for an extension of five calendar days through a simple extension.  The application process will be different depending on the type of assessment and extensions cannot be granted for some assessment types like exams.

Special consideration

If exceptional circumstances mean you can’t complete an assessment, you need consideration for a longer period of time, or if you have essential commitments which impact your performance in an assessment, you may be eligible for special consideration or special arrangements.

Special consideration applications will not be affected by a simple extension application.

Using AI responsibly

Co-created with students, AI in Education includes lots of helpful examples of how students use generative AI tools to support their learning. It explains how generative AI works, the different tools available and how to use them responsibly and productively.

Weekly schedule

WK	Topic	Learning activity
Week 01	Introduction	Lecture (2 hr)
Week 02	Foreign exchange market	Lecture and tutorial (3 hr)
Week 03	Interest rate parity conditions	Lecture and tutorial (3 hr)
Week 04	Purchasing power parity and real exchange rates	Lecture and tutorial (3 hr)
Week 05	Currency futures and options	Lecture and tutorial (3 hr)
Week 06	Interest rate and foreign currency swaps	Lecture and tutorial (3 hr)
Week 07	International debt and equity financing	Lecture and tutorial (3 hr)
Week 08	Transaction exchange risk	Lecture and tutorial (3 hr)
Week 09	Foreign currency hedging	Lecture and tutorial (3 hr)
Week 10	Real exchange rate risk	Lecture and tutorial (3 hr)
Week 11	Exchange rate determination and forecasting	Lecture and tutorial (3 hr)
Week 12	International capital market equilibrium	Lecture and tutorial (3 hr)
Week 13	Professional development	Lecture and tutorial (3 hr)

Study commitment

Typically, there is a minimum expectation of 1.5-2 hours of student effort per week per credit point for units of study offered over a full semester. For a 6 credit point unit, this equates to roughly 120-150 hours of student effort in total.

Required readings

Bekaert, G.J. and Hodrick, R.J. (2017), International Financial Management, 3rd edition, Cambridge, ISBN 978-1-107-11182-0.

Week 1: Chapter 2; Week 2: Chapter 3
Week 3: Chapters 6 and 7; Week 4: Chapter 8
Week 5: Chapter 20; Week 6: Chapter 21
Week 7: Chapters 11 and 12; Week 9: Chapter 17
Week 10: Chapter 9; Week 11: Chapter 10
Week 12: Chapter 13

Chapters from the textbook will be supplemented by journal articles. All the journal articles can be accessed through the Library Reading List, available on Canvas.

Learning outcomes

Learning outcomes are what students know, understand and are able to do on completion of a unit of study. They are aligned with the University's graduate qualities and are assessed as part of the curriculum.

Outcomes
Graduate qualities

At the completion of this unit, you should be able to:

LO1. explain and identify the risks as well as the opportunities that underpin the financial operations of business firms operating in an environment of open and integrated financial markets
LO2. apply basic exchange rate concepts to foreign exchange markets as well as describe and explain how the foreign exchange market is organised and operates
LO3. understand and effectively apply the concepts of arbitrage and speculation in international financial markets
LO4. explain and effectively apply, fundamental international parity conditions such as Purchasing Power Parity and Covered and Uncovered Interest Parity
LO5. explain how currency derivative contracts such as futures, forwards, swaps and options can be used to hedge and speculate based on anticipated exchange rate movements. Apply different derivative tools to hedge and manage foreign exchange risk
LO6. recognise and explain the different forms of foreign exchange exposure that a business enterprise may confront and describe how such different exposures can be managed
LO7. evaluate why domestic firms may wish to indulge in foreign currency financing and investment as well as comprehend how the choice is made between domestic currency and foreign currency financing and investment decisions. Evaluate the benefits and risks of off-shore financing
LO8. work in groups to analyse and evaluate the hedging/financing practice of a multinational firm

Graduate qualities

The graduate qualities are the qualities and skills that all University of Sydney graduates must demonstrate on successful completion of an award course. As a future Sydney graduate, the set of qualities have been designed to equip you for the contemporary world.

GQ1	Depth of disciplinary expertise Deep disciplinary expertise is the ability to integrate and rigorously apply knowledge, understanding and skills of a recognised discipline defined by scholarly activity, as well as familiarity with evolving practice of the discipline.
GQ2	Critical thinking and problem solving Critical thinking and problem solving are the questioning of ideas, evidence and assumptions in order to propose and evaluate hypotheses or alternative arguments before formulating a conclusion or a solution to an identified problem.
GQ3	Oral and written communication Effective communication, in both oral and written form, is the clear exchange of meaning in a manner that is appropriate to audience and context.
GQ4	Information and digital literacy Information and digital literacy is the ability to locate, interpret, evaluate, manage, adapt, integrate, create and convey information using appropriate resources, tools and strategies.
GQ5	Inventiveness Generating novel ideas and solutions.
GQ6	Cultural competence Cultural Competence is the ability to actively, ethically, respectfully, and successfully engage across and between cultures. In the Australian context, this includes and celebrates Aboriginal and Torres Strait Islander cultures, knowledge systems, and a mature understanding of contemporary issues.
GQ7	Interdisciplinary effectiveness Interdisciplinary effectiveness is the integration and synthesis of multiple viewpoints and practices, working effectively across disciplinary boundaries.
GQ8	Integrated professional, ethical, and personal identity An integrated professional, ethical and personal identity is understanding the interaction between one’s personal and professional selves in an ethical context.
GQ9	Influence Engaging others in a process, idea or vision.

Outcome map

Learning outcomes	Graduate qualities
Learning outcomes

Responding to student feedback

This section outlines changes made to this unit following staff and student reviews.

No changes have been made since this unit was last offered.

Additional information

Face-to-face: Lectures will be used to set the scene and show how the topic fits into the overall unit of study aims. Tutorials will help you to further your understanding and apply concepts to more difficult problems.
Print: Chapters from the textbook and specified articles should be read prior to attending the lecture each week. Homework problems will be assigned at the end of lectures and these should be completed before coming to the tutorial the following week.
Online: Canvas (https://canvas.sydney.edu.au) provides the main online learning support. You should log in at least twice per week to keep abreast of unit-wide announcements and use the resources to supplement your learning. Lecture slides will be available the day before each lecture for you to download from Canvas. Solutions to homework problems will be made available online after the problems are discussed in the tutorial.

Disclaimer

The University reserves the right to amend units of study or no longer offer certain units, including where there are low enrolment numbers.

To help you understand common terms that we use at the University, we offer an online glossary.

Current students

Overview

Overview

Unit details and rules

Teaching staff

Assessment

Assessment

Assessment summary

Assessment criteria

Late submission

Academic integrity

Learning support

Learning support

Simple extensions

Special consideration

Using AI responsibly

Weekly schedule

Weekly schedule

Study commitment

Required readings

Learning outcomes

Learning outcomes

Graduate qualities

Outcome map

Responding to student feedback

Responding to student feedback

Additional information

Additional information

Disclaimer

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