Free Essay

123123123123

In: English and Literature

Submitted By edward92yl
Words 2523
Pages 11
| |UNIVERSITI TUNKU ABDUL RAHMAN (UTAR) |
| |FACULTY OF ACCOUNTANCY AND MANAGEMENT |
| | |
| |Bachelor of International Business (Hons) |
| | |

| |Unit Code & |UKFF4024 |
| |Unit Title: |MULTINATIONAL FINANCE |
| |Course of Study: |Bachelor of International Business (Hons) |
| |Year of Study: |Year Three, Trimester Two |
| |Trimester Year |Jan 2016 |
| |Credit Hour: |4 credit hours |
| |Lecturing hours and |3 hours lecture per week for the duration of 14 weeks |
| |Tutoring hours |1.5 hours tutorial per week for the duration of 14 weeks |
| |Lecturer: |Miss Tan Kok Eng (tanke@utar.edu.my) (K629) |
| |Tutor: |Miss Tan Kok Eng (tanke@utar.edu.my) (K629) |
| |Moderator |Ms. Siti Nurhidayah Mohd Roslen |
| |Mode of delivery |Lectures and Tutorials |
| |Objectives: |This unit offers the field of study that focuses on business activities that cross national boundaries. It |
| | |includes exports and imports as well as foreign direct investment (FDI) and raising finance in foreign capital |
| | |markets. Besides that, this unit provides basic understanding on how multinational enterprises (MNEs) use |
| | |various hedging strategies to reduce exchange rate risk and formulate global business strategies to deal with |
| | |intensified competition globally. The aim is to provide a panorama of the most important activities in |
| | |international business and to offer a framework of working from managerial perspective. |
| |Learning Outcomes: |Upon completion of this unit, students will be able to: |
| | |1. Recognise the role of financial management in a multinational enterprise. |
| | |2. Differentiate between various exchange rate systems and explain the pros and cons of each system. |
| | |3. Explain how trade and capital flows affect a country’s Balance of Payments, and analyse factors that caused |
| | |changes in trade and capital flows; explain how Balance of Payments changes and exchange rate changes influence|
| | |multinational enterprise’s decision making. |
| | |4. Explain how foreign exchange market functions; differentiate between bid and ask rates, spot and forward |
| | |rates; compute cross rates, forward premiums and discounts. |
| | |5. Explain the relationship between exchange rates, interest rates and inflation rates; apply Interest Rate |
| | |Parity and Purchasing Power Parity to compute arbitrage profits; explain factors that influence the demand and |
| | |supply of a currency and how they affect exchange rates. |
| | |6. Explain how governments intervene in foreign exchange market and affect exchange rates. |
| | |7. Differentiate between transaction, economic and translation exposures; apply various techniques to hedge |
| | |transaction and economic exposures. |
| | |8. Compute the payoffs from forward market hedge, money market hedge and options hedge. |
| | |9. Recognise the features of foreign currency futures, options and swaps and illustrate how these instruments |
| | |could be used to hedge currency risks. |
| | |10. Identify alternative sources of financing for a multinational enterprise and analyse how a multinational |
| | |enterprise make capital structure decision. |
| | |11. Describe various methods to undertake foreign direct investment. |
| | |12. Appraise the profitability of potential foreign investment projects using Adjusted Present Value Model, |
| | |coupled with risk-adjustment and sensitivity analysis. |
| | |13. Explain how multinational enterprise manages its cash in practice and describe various methods of |
| | |international trade financing. |
| |Reading List: |Main Text Books: |
| | |1. Eun, C., Resnick, B. G., Ng, K.K., Tee, P.L., & Maran, M. (2011). International financial management. |
| | |McGraw-Hill. |
| | |2. Moffett, M. H., Stonehill, A. I., & Eiteman, D. K. (2006). Essentials of global finance (2nd ed.). Boston: |
| | |Pearson Addison Wesley. |
| | |3. Madura, J. (2010). International corporate finance (10th ed.). Ohio: Thomson South-Western. |
| | | |
| | |Supplementary Reading: |
| | |4. Crum, R. L., Brigham, E. F., & Houston, J. F. (2005). Fundamentals of international finance. Florida: |
| | |Thomson South-Western. |
| | |5. Homaifar, G. A. (2004). Managing global financial and foreign exchange rate risk. New Jersey: John Wiley & |
| | |Sons. |
| | |6. Melvin, M. (2004). International money and finance (7th ed.). Boston: Pearson Addison Wesley. |
| | |7. Moosa, I. A. (2004). International finance: An analytical approach (2nd ed.). Sydney: McGraw-Hill Irwin. |
| | |8. Shapiro, A. C. (2005). Foundations of multinational financial management (5th ed.). New Jersey: John Wiley &|
| | |Sons. |
| |Method of Assessment: |METHOD OF ASSESSMENT |
| | |Coursework (40% of Total Assessment) |
| | |Components of Coursework |
| | |Marks |
| | |Weightage of Total Assessment |
| | | |
| | |a. Mid-Term Test |
| | |40 marks |
| | |16% |
| | | |
| | |c. Group Assignment |
| | |60 marks |
| | |24% |
| | | |
| | |Total |
| | |100 marks |
| | |40% |
| | | |
| | | |
| | |Component a: Mid-Term Test |
| | |This test consists of 30 multiple choice questions. It will be held in WEEK 6 and will cover Topic 1 to Topic 3|
| | |(refer Teaching Plan below). |
| | | |
| | |Component b: Assignment (Group) |
| | |Students are advised to strictly comply with all requirements stated for the assignment. Students are required |
| | |to group themselves into a group of at least FOUR or a maximum of FIVE members and register their grouping with|
| | |respective tutor by WEEK 1 or ten (10) marks will be deducted for any delay in registration. Each assignment |
| | |group is required to select a pair of multinational corporations (MNCs) to analyse on. Assignment groups from |
| | |the same tutorial group are not allowed to choose the same pair of MNCs for analysis. No changes are allowed |
| | |after the submission. Lead lecturer’s approval must be obtained if there is any change in the number of |
| | |students due to withdrawal from the unit. |
| | | |
| | |Assignment will be submitted in WEEK 9. All assignment groups are required to submit their work according to |
| | |the format stated in assignment question. Failure submit assignment on the due date will be subject to Late |
| | |Submission Penalty Clause. |
| | | |
| | |Any assignment groups that are caught plagiarising or letting part or whole of their work to be plagiarised |
| | |will be penalised, with all the groups involved be awarded ZERO (0) mark for the assignment. In addition, the |
| | |students involved could face disciplinary action from the University. (please read Plagiarism below) |
| | | |
| | |Late Submission Penalty Clause |
| | |Deadline for submission of assessment item(s) is to be strictly adhered to. No extension of time will be |
| | |allowed except in extenuating circumstances, e.g. medical reasons. Students who wish to apply for extension of |
| | |time for submission of assessment item(s) after the due date shall put in writing the request together with |
| | |validated documentary evidence to support the application to his/her class tutor. The lead lecturer may |
| | |consider and grant such extension of due date for the assessment item(s) based on the tutor's recommendation. |
| | |Any assessment item required by the Coursework Assessment which is submitted after the due date, without an |
| | |approved extension, will be penalised. A penalty of 10% (from awarded marks) for each calendar day of delay |
| | |from the specified deadline will apply. No assignment submitted FIVE (5) calendar days after the due date will |
| | |be accepted and hence the assignment will be awarded ZERO (0) mark. |
| | | |
| | | |
| | |Final Examination (60% of Total Assessment) |
| | |The final examination for this unit will be based on a three (3) hours closed-book written examination. In |
| | |Section A (40 marks), students are required to answer one compulsory question. In Section B (60 marks), |
| | |students are required to answer any 2 questions of 30 marks each out of 3 questions. |
| | | |
| | |Aggregate Marks |
| | |Students must achieve at least 50 marks out of the aggregate marks for coursework and final examination in |
| | |order to Pass this unit with a grade C. Failure to achieve this will result in repeat for this unit in future |
| | |trimester. |
| | | |
| | | |
| |Remarks |INDEPENDENT LEARNING |
| | |As a third year university student, you are expected to undertake independent learning and reading up on each |
| | |topic in addition to attending lectures and tutorials each week. To assist you to do this, a schedule of |
| | |recommended reading has been prepared. International finance is a dynamic subject and you are also expected to|
| | |keep up-to-date with current events by reading the financial pages of the newspapers and financial magazines, |
| | |such as www.imf.org, www.adb.org, www.ft.com www.bnm.gov.my, biz.thestar.com.my, www.nst.com.my, , |
| | |www.awsj.com, www.theedgedaily.com, etc. |
| | | |
| | | |
| | |ACADEMIC REGULATIONS |
| | | |
| | |Plagiarism |
| | |Plagiarism is defined as the submission or presentation of work, in any form, which is not one's own, without |
| | |acknowledgment of the sources. If a student obtains information or ideas from an outside source, that source |
| | |must be acknowledged. Another rule to follow is that any direct quotation must be placed in quotation marks and|
| | |the source immediately cited. Plagiarism is also defined as copy of all or part of the work of another |
| | |student(s) of current or previous batch of this University or another higher learning institution. |
| | | |
| | |The University's degree and other academic awards are given in recognition of the candidate's personal |
| | |achievement. Plagiarism is therefore considered as an act of academic fraudulence and as an offence against |
| | |University discipline. |
| | | |
| | |Intellectual Property |
| | |Copyright must be seriously protected. The University takes a strong stand against any illegal photocopying of |
| | |textbooks and any other materials by students. Students are forewarned of the consequences and the penalty that|
| | |may be meted out if they are "caught in the act". |
| | | |
| | | |
| | |Mode of Referencing |
| | |Students are advised to incorporate proper academic modes of referencing. The normally acceptable mode of |
| | |academic referencing is the American Psychological Association (APA) system. |
TEACHING PLAN - WEEKLY SCHEDULE

|Week |Lecture Topic |Tutorial Topic |Assignment/Test |Reference |
|1. |Topic 1: Multinational Financial Goals |Tutorial 1 |Group Assignment |Moffett |
|18/1 – 24/1 |Multinational Financial Management |Description of Assignment.| |(Chapter 1) |
| |Globalisation: Transitions from | |Date given: Week 1 |Eun et al |
| |Domestic Phase to International Phase |Clarify what are required |Due date: Week 9 |(Chapter 1) |
| |to Multinational Phase |from students for this |Description: |Madura |
| |Shareholder Wealth and Corporate Wealth|unit. |Assignment |(Chapter 1) |
| |Maximization | | | |
|2. |Topic 2: The Balance of Payments |Tutorial 2 | |Moffett |
|25/1 – 31/1 |Typical BOP Transactions |(Topic 1) | |(Chapter 3) |
| |Fundamentals of BOP Accounting |Minimum 4 questions to be | |Eun et al |
| |BOP Flow Statement |answered and will be | |(Chapter 2) |
| |Current Account and Capital Account |discussed in tutorial | |Shapiro |
| |Direct Investment and Portfolio |class. | |(Chapter 5) |
| |Investment | | |Madura |
| |BOP in Total: Surplus and Deficit | | |(Chapter 2) |
| |Capital Mobility | | | |
| |Factors affecting the BOP position | | | |
| |Correcting a Balance of trade deficit | | | |
|3. |Topic 3: International Monetary System |Tutorial 3 | |Moffett |
|01/2-07/2 |History of the International Monetary |(Topic2) | |(Chapter 2) |
| |System |Minimum 4 questions to be | |Eun et al |
| |Exchange Rate Systems |answered and will be | |(Chapter 3) |
| |Fixed exchange rate, Freely and Managed|discussed in tutorial | |Madura |
| |Floating exchange rate, Pegged exchange|class. | |(Chapter 6) |
| |rate | | | |
| |Currency Boards | | | |
| |Dollarization | | | |
| |The Birth of Euro Currency | | | |
| |Sterilized and Non-sterilized | | | |
| |Interventions | | | |
| |Government Intervention on Exchange | | | |
| |Rate | | | |
|4. |Topic 4: The Foreign Exchange Market |Tutorial 4 | |Moffett |
|08/2– |Foreign Exchange Market |(Topic 3) | |(Chapter 6) |
|14/2 |Market Participants |Minimum 4 questions to be | |Eun et al |
| |Interbank and Client Markets |answered and will be | |(Chapter 4) |
| |Foreign Exchange Rate & Quotations |discussed in tutorial | |Madura |
| |Bid and Ask Rates |class. | |(Chapter 3) |
| |Cross Rates | | | |
| |Intermarket Arbitrage | | | |
| |Spot and Forward Rates, Premiums and | | | |
| |Discounts | | | |
|5. |Topic 5: International Parity |Tutorial 5 | |Moffett |
|15/2 – |Conditions |(Topic 4) | |(Chapter 4) |
|21/2 |Prices and exchange rates |Minimum 4 questions to be | |Eun et al |
| |Purchasing Power Parity (PPP) |answered and will be | |(Chapter 5) |
| |Fisher Effect |discussed in tutorial | |Madura |
| |International Fisher Effect |class. | |(Chapter 7 & 8) |
| |Interest Rate Parity (IRP) | | | |
| |Covered and Uncovered Interest | | | |
| |Arbitrage | | | |
| |Locational Arbitrage | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
|6. |Topic 6: Exchange Rate Determination |Tutorial 6 |Mid-Term Test |Madura |
|22/2 – |Factor affecting supply and demand for |(Topic 5) |Topic 1 to 3 |(Chapter 4 & 9) |
|28/2 |foreign exchange rates |Minimum 4 questions to be | |Eun et al |
| |Expectation |answered and will be |30 multiple choice questions |(Chapter 6) |
| |Speculation in foreign exchange market |discussed in tutorial | | |
| |Exchange Rate Forecasting |class. | | |
|7. |Topic 7: Foreign Currency Derivatives |Tutorial 7 | |Moffett |
|29/2 – |Foreign Currency Futures |(Topic 6) | |(Chapter 7) |
|06/2 |Foreign Currency Options |Minimum 4 questions to be | |Eun et al |
| |Net Payoff for Options Buyer or Seller |answered and will be | |(Chapter 7) |
| |Pure Spot Market Speculation |discussed in tutorial | | |
| |Forward Market Speculation |class. | | |
| |Options Market Speculation | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
|8. |Topic 8: Measuring Foreign Exchange |Tutorial 8 | |Moffett |
|07/2 – |Exposure |Discuss Mid-Term Test. | |(Chapter 8, 9 & 10) |
|13/3 |Types of Exposure: Transaction, | | |Eun et al |
| |Economic and Translation | | |(Chapter 9) |
| |Why Hedge? | | |Madura |
| |Techniques to eliminate Transaction | | |(Chapter 10 & 11) |
| |Exposure: | | | |
| |Futures Hedge, Forward Hedge, Money | | | |
| |Market Hedge, Option Hedge, Leading and| | | |
| |Lagging, Cross-Hedging, Exposure | | | |
| |Netting | | | |
| |Comparison of Hedging Techniques | | | |
| |Limitations of Hedging | | | |
| | | | | |
| | | | | |
|9. |Topic 9: Managing Foreign Exchange |Tutorial 9 |Assignment Due |Moffett |
|14/3 – |Exposure |(Topic 7) |Submit on the day of lecture.|(Chapter 8, 9 & 10) |
|20/3 |Techniques to reduce Economic Exposure:|Minimum 4 questions to be | |Eun et al |
| | |answered and will be | |(Chapter 10 & 11) |
| |Selecting Low Cost Production Site, |discussed in tutorial | |Madura |
| |Diversification of Markets, Flexible |class. | |(Chapter 12) |
| |Sourcing Policy | | | |
| | | | | |
| | | | | |
| |Topic 10: Currency and Interest Rate | | |Moffett |
| |Swap | | |(Chapter 14) |
| |Management of Interest Rate Risk | | |Eun et al |
| |Interest Rate Swap | | |(Chapter 8) |
| |Currency Swap | | | |
| |Unwinding Currency Swap | | | |
| |Cross-Currency Interest Rate Swap | | | |
| | | | | |
| | | | | |
|10. |Topic 11: Multinational Cost of Capital|Tutorial 10 | |Madura |
|21/3 – |and Capital Structure |(Topic 8 & 9) | |(Chapter 17 & 18) |
|27/3 |Weighted Average Cost of Capital |Minimum 4 questions to be | |Eun et al |
| |Country differences in cost of debt and|answered and will be | |(Chapter 13) |
| |equity |discussed in tutorial | | |
| |Capital Asset Pricing Model under |class. | | |
| |cross-listing | | | |
| |Using the cost of capital to assess | | | |
| |foreign projects | | | |
| |MNE's Capital Structure Decision | | | |
| |Interaction between subsidiary and | | | |
| |parent financing decisions | | | |
| |Target capital structure: local versus | | | |
| |global | | | |
| |Sources of short-term financing | | | |
| |Effective Financing Rate | | | |
|11. |Topic 12: Multinational Capital |Tutorial 11 | |Madura |
|28/3 – |Budgeting |(Topic 8 &9) | |(Chapter 14) |
|03/4 |Revision of domestic capital budgeting |Minimum 4 questions to be | |Eun et al |
| |Adjusted Present Value (APV) model |answered and will be | |(Chapter 14) |
| |Capital budgeting from parent firm’s |discussed in tutorial | | |
| |perspective |class. | | |
| |Sensitivity analysis | | | |
| |Real option | | | |
| | | | | |
| |Topic 13: Foreign Direct Investment | | | |
| |Motives for FDI | | | |
| |Comparing Benefits of FDI Among | | | |
| |Countries | | |Madura |
| |International Diversification Benefits | | |(Chapter 13) |
| |Government Incentives and Barriers | | |Moffett |
| |How to invest abroad? | | |(Chapter 16) |
| | | | |Eun et al |
| | | | |(Chapter 12) |
|12. |Topic 14: Multinational Cash Management|Tutorial 12 | |Madura |
|04/4 – 10/4 |The management of international cash |(Topic 11) | |(Chapter 21) |
| |balances |Minimum 4 questions to be | |Eun et al |
| |Bilateral netting of internal and |answered and will be | |(Chapter 15) |
| |external net cash flows |discussed in tutorial | | |
| |Reduction in precautionary cash |class. | | |
| |balances | | | |
| |Transfer pricing and related issues | | | |
| |Blocked funds | | | |

|Week |Topic | | |Reference |
|Week 13 |Topic 15: Financing International Trade|Tutorial 13 | |Madura |
|11/4 – |Financing International Trade |(Topic 13) | |(Chapter 19) |
|17/4 |Payment Method: Prepayment, Letter of |Minimum 4 questions to be | |Eun et al |
| |Credit, Bills of Exchange, |answered and will be | |(Chapter 16) |
| |Consignments, Open Accounts |discussed in tutorial | | |
| |Trade Finance Method: Accounts |class. | | |
| |Receivable, Factoring, Letter of | | | |
| |Credit, Banker's Acceptance, Working | | | |
| |Capital Financing, Forfaiting, | | | |
| |Contertrade | | | |
|Week 14 |Revision |Tutorial 14 | | |
|18/4 – | |(Topic 14 & 15) | | |
|24/4 | |Minimum 4 questions to be | | |
| | |answered and will be | | |
| | |discussed in tutorial | | |
| | |class. | | |

This Unit Plan is
|Prepared by: |Moderated by |Approved by: |
| | | |
| | | |
| | | |
| | | |
| | | |
|Lecturer in charge |Moderator |Head of Department Economics |
|Miss Tan Kok Eng |Ms. Siti Nurhidayah Mohd Roslen |Mr. Sia Bik Kai |
|Date |Date |Date |

Note: The information provided in this Unit Plan is subject to change by the Lecturer. Students shall be notified in advance of any changes.

Similar Documents

Premium Essay

123123123123

...Review of Related Literature Why do people smoke? According to http://healthliteracy.worlded.org, Most people start smoking when they are in their teens and are addicted by the time they reach adulthood. Some have tried to quit but have returned to cigarettes because smoking is such a strong addiction. It is a habit that is very difficult to break. There are many different reasons why people smoke. Three of the main reasons that young people smoke are to look mature, to be like their friends, and to experiment. Since teens see older people all around them smoking, especially their parents and relatives, they smoke to act older. If their friends or peers smoke, they may feel pressured into doing the same to be accepted. The last reason is the excitement of experimenting with something that is forbidden. As defined by The 1988 report, The Health Consequences of Smoking: Nicotine Addiction: A Report of the Surgeon General “,”Nicotine addiction is the fundamental reason that individuals persist in using tobacco products, and this persistent tobacco use contributes to many diseases”. And according to the WHO (World Health Organization) official website, tobacco kills up to half of its users, it also kills nearly 6 million people each year. More than five million of those deaths are the result of direct tobacco use while more than 600 000 are the result of non-smokers being exposed to second-hand smoke and nearly percent of the world's one billion tobacco users live in low-......

Words: 1195 - Pages: 5