BA31203

INTERNATIONAL FINANCIAL
SYSTEMS
A. COURSE SUMMARY
Code
BA31203
Title
International Financial Systems/Sistem Kewangan Antarabangsa
Session
Semester 2 2014/2015
Facilitators Mr. Jaratin Bin Lily
Tel: 088-320000 ext. 1592
Room: No.72, Level 4, SPE
Contact; 0198035574 (Whatsapp only)
Time/Place 4pm-6pm/Thursday/DKP9
This course examines the principles and theories of the international
Synopsis

Learning
Objectives
At the end
of the
course,
student is
able to

Assessmen
t

aspects of corporate finance, investing and operating multinational

organizations in a global economy and environment. It intends to
equip students with tools and methods to study and analyze
international finance issues and problems. This course will cover
foreign exchange and exchange rate determination, multinational
financing and investment decisions, currency risk management,
currency derivatives, principals of hedging and international capital
markets and portfolio investment. Current and historical policy issues
and how they relate to the financial markets are discussed throughout
the course.
1. Be able to discuss and compare the framework of the
international monetary system and point out their differences,
similarities, and respective advantages and limitations (PLO1,
C3).
2. Describe, explain and illustrate the various theories of
exchange rate determination. (PLO1, C4)
3. Identify and explain the various types of exchange rate risks
faced by firms and the financial instruments (forward/futures
contracts, currency options, and swap) and strategies they can
use to manage the risks.) (PLO3, C4, A3, LL)
4. Identify some of the sources of international finance and the
attitudes of international investors (PLO3, C4, CTPS)
5. Be able to work as part of a group to organize and produce a
project involving both descriptive and empirical material.
(PLO3, PLO5, CS, CTPS)
Component
Percentage
a.
b.
c.

a.
b.
c.

Individual
Assignment
Quiz
Final Exam

10
10
40

Total

60

Group
Case Study
Report
Presentation
Total

15
20
5
40

Grand Total

References

100

Textbooks and references:

Main Reference
Moffett, M.H., Stonehill, A.I. & Eiteman, D.K. (2014). Fundamental of
Multinational Finance, 4th Edition, Pearson Addison Wesley
Additional References
Eun, C.S & Resnick, B.G. et. al,. (2011). International Financial
management, 6th Edition, Malaysian edition: McGraw Hill International

BA31203
SYSTEMS

INTERNATIONAL FINANCIAL
Eiteman, D. K., Stonehill, A. I. & Moffett, M H (2012), Multinational
Business Finance, 12th Edition, Pearson Addison Wesley
Solnik, B. & McLeavey, D. (2014). Global Investments, Sixth Edition: Pearson
Addison-Wesley
Madura, J (2012) International Financial Management, 11th Edition : South-Western,
Shapiro, A C (2013) Multinational Financial Management, 10 th Edition : John Wiley &
Sons,

At the end of the semester, students may evaluate themselves how much
knowledge they have gained from the course. Students are welcomed to give any
comments and suggestion to improve the quality of teaching and course.
B. Course Schedule:
Lec.

Subject

Date
Chap.

2
3
4

The International
Monetary System

The Foreign Exchange

Market

Balance of Payments
International Parity
Conditions

4,7

International Parity
Conditions
Exchange rate
determinants

10

11

12

1,2

Course introduction
Current Multinational
challenges and the
global economy
Financial goals and
corporate governance

Foreign Currency
Derivatives: Forward,
Futures, Market Hedge,
Options, Swaps
Foreign Currency
Derivatives: Forward,
Futures, Market Hedge,
Options, Swaps

7,9

Case 1
The Saga of
the
Venezuelan
Bolivar Fuerte

8
Case 2
The Japanese
Yen
Intervention of
2010

Transaction exposure/
Operating/Economic
exposure

10

The global cost and

availability of capital

11

Sourcing equity and debt

globally

12

Foreign Direct
Investment and Political
risk

14

International Trade
Finance
Group and individual
report

Add.

Prepared for class/Tutorial/

Self-Exercises
Cases
Question
Problem
(due date)

Case 3
Toyotas
European
Exposure

BA31203
SYSTEMS
13

INTERNATIONAL FINANCIAL

Group Project
presentation

Group Project
presentation
15 Study week
14

NOTE: While every attempt will be made to keep to the schedule listed above, unexpected
circumstances may necessitate modifications throughout the semester. REFER YOUR
SMARTUMS FOR UPDATED INFORMATION REGARDING THE COURSE SCHEDULE

BA31203
SYSTEMS
C. GROUP ASSIGNMENT

INTERNATIONAL FINANCIAL

1. Group Project
List of titles:
a. Determinants of Foreign Direct Investment Inflows (e.g exchange rate,)
b. Determinants of Foreign Exchange Rate (e.g Interest rate)
c. The effect of exchange rate movements on macro (eg. GDP, market value) and
microeconomic variables (eg inflation)
d. Determinants of Inflation (e.g Exchange rate, World Crude Oil price)
e. Determinants of Foreign Direct Investment Outflows
f. Determinants of exchange rate exposure (market level or firm level) (e.g world
crude Oil price)
The number of the determinants (factors) depends on the number of member in
the group.
The writing guideline
Methodology lecture):

is

as

follows

(Remember

your

Research

1. Introduction
a. Background of issues
b. Statement of problems
c. Research Objectives
2. Literature Reviews (more than 60 % of the articles are within 5 years
from the current year)
a. Previous research or articles regarding the issues
b. At least 30 articles from journal or recognized sources (At least 15
articles per person)
Refer UMS library website : Journals or Google Scholar
c. Citation guide: APA style (Download the manual from your Smartums)
d. Strictly use Mendeley for citation manager
e. Always start with theory and then empirical evidence
f. Use Table 1 for article compilation.
3. Research Methodology
a. Explain in detail your methods (where do you get your data, type of data,
countries selected, what model/equation you use to testing your hypothesis,
etc).
4. Empirical Results
a. Your group needs to collect and analyze data to support your argument on
the determinants. Comparison at least three countries are required (ASEAN
countries). One of the countries must be Malaysia. Students are required to
have EVIEWS program for testing procedure. You may ask it from UMTP
for installment.
5. Conclusion and Recommendations
a. Give conclusion and recommendations to the issues based on your
literature reviews and empirical results
Guidelines
Font
: 11 Tahoma;
Spacing
: 1.5;
Size
Pages: Maximum 30 pages (excluding tables and figures)
Dateline: Week 12
4

: A4

BA31203
SYSTEMS

INTERNATIONAL FINANCIAL

Requirement
1. Please attach the articles and the table compilation. Burn all of your
work (report, articles, eviews output) in a CD. All groups are required to
present their report.
2. You must submit your report to UMS library checking for plagiarism
report using turnitin program. Any plagiarism report exceeds 20 percent
will not be accepted.
2. Case Study
List of case studies will be informed soon.
Case study report Guidelines
Font
: 11 Tahoma
Spacing
: 1.5
Margin
: Top, Bottom, Left, Right =1 inch
Due date (Report) : One week
In preparing the case study report, students must follow the following format:
CASE SUMMARY
ANSWER THE CASE QUESTIONS
CONCLUSION-LESSON LEARNT
3. Presentation
The presentation will be graded based on the following: Business Like Attire;
Presentation Skills; Audio/Video/Power Point Quality; Contents of Presentation; and
Question and Answer Session Skills.
D. INDIVIDUAL ASSIGNMENTS
Each of your group members will decide on one of the variables to study
depending on the title you have been given. As an example, some of the
determinants of Foreign Direct Investment are foreign exchange rate, inflation,
interest rate and GDP of ASEAN country (Malaysia, Thailand, Singapore,
Philippines, Indonesia, Vietnam). Your individual assignment is included in
chapter two of your group project assignment.

E. Most of the information you may get them from the following sources:
Data sources:
IMF database
World bank database
UNTCD database
Department of statistics publication
Yahoo finance
Central bank website
List
of
central
bank
for
countries
can
be
accessed
at
http://www.bis.org/cbank.htm

BA31203
SYSTEMS

INTERNATIONAL FINANCIAL