2009/2010 Course Plan
MG-306 International Financial Management Benny Budiawan Tjandrasa, SE, MM.
MANAGEMENT DEPARTMENT HARAPAN BANGSA BUSINESS SCHOOL 2010
HARAPAN BANGSA BUSINESS SCHOOL Semester Genap 2009/2010 MG-306 International Financial Management Management
SASARAN KULIAH
Sharing knowledge about the usefulness of international financial management in for private business as well as in Multinational Company.
MATERI KULIAH
This subject explain about the use of international financial management in business, which include explanation about foreign exchange market, option and future market, interest parity and forecasting.
DAFTAR PUSTAKA 1. INTERNATIONAL FINANCIAL MANAGEMENT HANDOUT, 2010 2. INTERNATIONAL CORPORATE FINANCE 9th edition, Jeff Madura 3. MULTINATIONAL BUSINESS FINANCE, ninth edition, David K.Eiteman, Arthur L.Stonehill, Michael H.Moffett 4. FUNDAMENTALS OF CORPORATE FINANCE. Richard Brealey, Stewart Myers, Alan Marcus
EXPECTATION
After finishing the class, students should be able to: • Understand the importance of international financial management in business / corporation • Analyze foreign exchange market and able to prepare financial plan that related to changes of foreign exchange • Understand the use of international financial management as a tool for decision making.
EVALUTION SYSTEM Quiz Tutorial Duties Mid Exam Final Exam
:10% :10% :10% : 30% : 40%
MINGGU KE1
2
3
4&5
6
7
TOPIK Multinational Financial Management: 1. To identify the main goal of the multinational corporation (MNC) and potential conflicts with that goal; 2. To describe the key theories that justify international business; and 3. To explain the common methods used to conduct international business. A. International Fund Flows 1. To explain the key components of the balance of payments; and 2. To explain how the international flow of funds is influenced by economic factors and other factors. B. International Financial Markets 1. foreign exchange market, 2. international money market, 3. international credit market, 4. international bond market, and 5. international stock markets Determining Exchange Rates 1. To explain how exchange rate movements are measured; 2. To explain how the equilibrium exchange rate is determined; and 3. To examine the factors that affect the equilibrium exchange rate. Exchange Rate Derivatives 1. To explain how forward contracts are used for hedging based on anticipated exchange rate movements; and 2. To explain how currency futures contracts and currency options contracts are used for hedging or speculation based on anticipated exchange rate movements. Governments and Exchange Rates 1. To describe the exchange rate systems used by various governments; 2. To explain how governments can use direct and indirect intervention to influence exchange rates; and To explain how government intervention in the foreign exchange market can affect economic conditions. Interest Rate Parity and International Arbitrage
PERSIAPAN (bahan yang harus dibaca mahasiswa sebelum kuliah) Ref.1 , chapter 1
Ref.1, chapter 2 &3
Ref.1, chapter 4
Ref.1, chapter 5
Ref. 1, chapter 6
Ref. 1, chapter 7
MINGGU KE-
8 9
10
11
12
13
TOPIK 1. To explain the conditions that will result in various forms of international arbitrage, along with the realignments that will occur in response; and 2. To explain the concept of interest rate parity, and how it prevents arbitrage opportunities. UJIAN TENGAH SEMESTER Relationships among Exchange Rates, Inflation, and Interest Rates 1. To explain the purchasing power parity (PPP) and international Fisher effect (IFE) theories, and their implications for exchange rate changes; and 2. To compare the PPP, IFE, and interest rate parity (IRP) theories. Exchange Rate Forecasting 1. To explain how firms can benefit from forecasting exchange rates; 2. To describe the common techniques used for forecasting; and 3. To explain how forecasting performance can be evaluated. Exchange Rate Fluctuation Exposure: Measurement 1. To discuss the relevance of an MNC’s exposure to exchange rate risk; 2. To explain how transaction exposure can be measured; 3. To explain how economic exposure can be measured; and 4. To explain how translation exposure can be measured. Transaction Exposure: Management 1. To identify the commonly used techniques for hedging transaction exposure; 2. To show how each technique can be used to hedge future payables and receivables; 3. To compare the pros and cons of the different hedging techniques; and 4. To suggest other methods of reducing exchange rate risk. Economic Exposure and Translation Exposure: Management 1. To explain how an MNC’s economic exposure can be hedged; and 2. To explain how an MNC’s translation exposure can be hedged
PERSIAPAN (bahan yang harus dibaca mahasiswa sebelum kuliah)
Ref. 1, chapter 8
Ref.1, chapter 9
Ref.1, chapter 10
Ref.1, chapter 11
Ref.1, chapter 12
MINGGU KE14
15 16
TOPIK International Cash Management 1. To explain the difference in analyzing cash flows from a subsidiary perspective versus a parent perspective; 2. To explain the various techniques used to optimize cash flows; 3. To explain common complications in optimizing cash flows; and 4. To explain the potential benefits and risks of foreign investments. Review minggu 1- 14 UJIAN AKHIR SEMESTER
PERSIAPAN (bahan yang harus dibaca mahasiswa sebelum kuliah) Ref.2, chapter 21
