NORTHERN CARIBBEAN UNIVERSITY

College of Business and Management

Department of Business Administration & Hospitality Management
Spring Semester 2023

DEGREE BACHELOR OF SCIENCE IN BUSINESS

ADMINISTRATION

MAJOR: FINANCE

COURSE NAME: INTERNATIONAL FINANCE

COURSE CODE: FNCE 480

NUMBER OF CREDITS: 3

NUMBER OF HOURS: 45 Hours

LECTURE TIME: 11:00am – 12:20 pm (Tuesdays & Thursdays)

SPECIAL NOTE: This is an online blended (synchronous and asynchronous) course.

There is no onsite class meetings.

DURATION OF CLASS: This class begins on Jan. 9, 2023 and ends Apr. 20, 2023

FINAL EXAM: TBD.

NAME OF LECTURER: Andrew M. Carty, MBA

EMAIL ADDRESS: andrew.carty@ncu.edu.jm

OFFICE HOURS: 24/7 Online; Allow up to 72 hours for a response.

PREREQUISITES: FNCE343: Financial Markets & Institutions

FNCE 480 International Finance – Course Outline – Page 1 of 17

INSTRUCTIONAL MATERIAL

Required Text:

Title: Multinational Business Finance

Names: Eiteman, David K. | Stonehill, Arthur I. | Moffett, Michael H.

Description: Fifteenth Edition. | Boston: Pearson, [2019] | Revised edition of | Includes

bibliographical references and index.
Identifiers: ISBN 9780136878889

Supplementary Text:
Madura, J. (2003). International financial management. Mason, Ohio: Thomson/South –
Western.

Supplementary Materials
Print Journal articles
Newspaper articles
Online journal articles

COURSE OVERVIEW AND INTRODUCTION

Welcome to FNCE 480 International Finance. This course will be conducted online via lectures,
readings and discussions based on the text, supplemental materials, group, and individual
assignments. Discussions are designed to enhance collaborative learning and assignments and
exams are to enhance an understanding of the material presented in the course.

FNCE 480 International Finance – Course Outline – Page 2 of 17

Course Description

This course attempts to provide a comprehensive and integrated introduction to the discipline of
modern international finance. The use of historical, institutional, economic, and managerial
paradigms to analyze and understand the various issues and concepts will be employed in this
course of study. In addition, students will be exposed to the study of foreign exchange markets,
exchange rate determination, balance of payments, international parity conditions, managing
foreign exchange risks and exposure, and optimal policy tools to manage the international
financial environment.

LEARNING OBJECTIVES

The objective of the course is to expose students to the basic principles and applications of
finance management. By the end of this course students should be able to:
1. Appraise the international financial environment and the factors associated with foreign
exchange rate determination.
2. Compute and explain with examples knowledge of foreign exchange terminology,
balance of payments etc.
3. Categorize and measure the various forms of financial instruments available for foreign
exchange risk management.
4. Provide an in-depth understanding of the process and techniques used to make
international investment decisions.

Faith and Learning Outcomes

Throughout the course we will:

1. Communicate the principle of honesty in relation to international finance as this will have
long-term effects on our moral and spiritual lives.
2. Become skilled in the manifestation of God’s purpose in our individual lives.
3. Relate topics covered to everyday, practical, ethical and moral issues.
4. Recognize that the choices we make in our everyday lives must be guided by the Holy
Spirit.

These will be brought out in each unit, specific to the concept being taught.

ASSESSMENT AND MEASUREMENT

Grades will be the composite of assignments (both individual and group), three examinations,
two quizzes, an oral presentation and a final exam valued 40 percent of the total grade.

FNCE 480 International Finance – Course Outline – Page 3 of 17

Grading Information/Course Work Weighting

%
Sectional Exams (2) 30%
Quizzes (2) 10%
Oral Presentation 10%
Worksheets/Assignments (2) 10%
Final Assignment 40%
Total 100%

Grading Policy

Percentage Score Letter

Equivalent
90 – 100% A
85 – 89% A-
80 – 84% B+
75 – 79% B
70 – 74% B-
65 – 69% C+
60 – 64% C
55 – 59% C-
50 – 54% D
Less than 50% F

Course Schedule
The schedule below describes the learning activities that will help you achieve the course
outcomes listed above and the assignments that will be used to measure your mastery of the
outcomes. Each weekly section is divided into readings, lectures, activities, discussions, and
assignments.
Assignments: Learning objectives will be concretized through individual and group assignments.
These assignments will cover particular concepts/chapters.
Quizzes: Learning outcomes will also be assessed using quizzes that will cover one or two
chapters and will include objective type questions (True or False, multiple choice, fill in the
blanks).
Sectional tests: Two (2) Sectional tests will be done over the semester. The first sectional test
will cover chapters 1-6, and the second sectional will cover chapters 7-12.
The due dates for the assignment submissions, quizzes and sectional tests are outlined on the
Class Schedule. Quizzes and sectional tests will be timed and once you access a test, you must
FNCE 480 International Finance – Course Outline – Page 4 of 17
complete it in one sitting. Tests will close automatically after the time is expired. Therefore, read
the text before you start the test. Students are expected to maintain academic integrity and thus
duplicated or plagiarized work will be penalized.
LEARNING ACTIVITIES AND LEARNER INTERACTION
Course Format
Students are expected to allocate their time among a set of interrelated activities in and outside of
the classroom. The following activities will be expected from each student:
1. Independent reading and preparation for exams and class discussions.
2. Independent and or group preparation of projects and assignments.
3. Online exams
4. Presence online. You are expected to log in to each class to be considered present in this class.
The university’s attendance policy will be enforced.

COURSE CONTENT

UNIT 1: Global Financial Environment (6 Hrs)

Instructional Outcomes: At the end of Unit 1, the student – teacher will

1.1 Define and discuss terms such as globalization and multinational enterprise
1.2 Discuss the principle of comparative advantage
1.3 Discuss the importance of corporate governance
1.4 Examine the importance of the international monetary system
1.5 Define and discuss aspects of balance of payments

Content
 Globalisation and the multinational enterprise
 Financial goals and corporate governance
 The international monetary system
 The balance of payments
 Current multinational financial challenges

Key terms:
 
 Agency problem  Competitive Advantage
 
 Balance of payments  Credit crisis
 
 Collateralized debt obligations  Credit quality

FNCE 480 International Finance – Course Outline – Page 5 of 17

 
 Currencies  Globalization
 Greenfiel investment
 Currency board 
 Gross domestic product

 Current account  Impossible trinity

 Devaluation  Initial public offering
 International monetary fund

 Devaluation  Joint venture
  Knowledge assets
 Dollarization
 LIBOR
  Licensing management contract
 Emerging markets
 Mortgage-backed securities

 Eurocurrencies  Multinational enterprise
  Real assets
 Exchange rate quotations  Securitization

 Exchange rates  Stakeholder capitalism model

 Stockholder wealth maximization
 Financial assets model
  Theory of comparative advantage
 Global outsourcing

UNIT 2: Foreign Exchange Theory and Markets (8 Hrs)

Instructional Outcomes: At the end of Unit 2, the student- teacher will

2.1. Discuss the operations of the foreign exchange market
2.2 Calculate interbank quotations, forward market and spot market transactions
2.3. Compute and assess international parity conditions
2.4 Discuss and evaluate foreign currency derivatives
2.5 Calculate and analyse the importance of interest rate and currency swaps

Content:
 The foreign exchange market
 International parity conditions
 Foreign currency derivatives
 Interest rate and currency swaps
 Foreign exchange rate determination and forecasting
Key terms:
 Arbitragers  Asset market approach
 Ask rate  Balance of payment approaches
FNCE 480 International Finance – Course Outline – Page 6 of 17
  Bid rate  Indirect quote
 Call  Intermarket arbitrage
 Capital controls  Long positions
 Cross rates  Monetary approaches
 Direct intervention  Purchasing power parity
 Direct quote  Purchasing power parity approaches
 Exchange rate pass-through  Put
 Fisher effect  Short positions
 Foreign currency futures  Speculators
 Foreign exchange market  Spot transactions
 Foreign exchange transaction  Swap transactions
 Forward transactions  Technical analysis
 Indirect intervention  Uncovered interest arbitrage

Unit 3: Foreign Exchange Exposure (6 Hrs)

Instructional Outcomes: At the end of Unit 3, the student-teacher will

3.1 Define and discuss the importance of transaction exposure
3.2 Discuss the importance of hedging in managing transaction exposure.
3.3 Discuss the attributes of operating exposure in relation to strategic management
3.4 Define and discuss the importance of translation exposure and methods used to manage
same

Content:
 Transaction exposure
 Operation exposure
 Translation exposure

Key terms:

 Backlog exposure  Integrated foreign entity

 Back-to-back or parallel loans  Intercompany receivables/payables
 Billing exposure  Intracompany receivables/payables
 Cross-currency swaps  Matching currency cash flows
 Currency risk  Natural hedge
 Current rate method  Operating exposure
 Financial hedge  Quotation exposure
 Functional currency  Risk-sharing agreements
 Hedging  Self-sustaining foreign entity

FNCE 480 International Finance – Course Outline – Page 7 of 17

  Temporal method  Translation exposure
 Transaction exposure  Uncovered position

UNIT 4: Financing the Global Firm (7 Hrs)

Instructional Outcomes: At the end of Unit 4, the student-teacher will

4.1 Illustrate the usage of the weighted cost of capital method to analyse whether the
multinational enterprise is competitive with its domestic competitors.
4.2 Discuss the design of a strategy to source equity and debt capital globally
4.3 Analyse alternative instruments to source equity abroad
4.4 Define localization
4.5 Discuss international debt markets

Content:
 The global cost and availability of capital
 Sourcing equity globally
 Sourcing debt globally

Key terms:

 Asymmetric information  International bond market

 Demutualization  Market liquidity

 Depository receipts  Market segmentation

 Offshore financial centers
 Desired capital structure
 Optimal financial structure
 Directed public share issue  Private placement
 Risk-free rates
 Equity risk premium
 Strategic alliances
 Syndicated credits
 Eurobond
 Systematic risk
 Euroequity issue  Target capital structure
 Global betas  Tax havens
 Transfer pricing
 Global portfolio  Weighted average cost of capital

FNCE 480 International Finance – Course Outline – Page 8 of 17

  World portfolio

Unit 5: Foreign Investment Decisions (8 Hrs)

Instructional Outcomes: At the end of Unit 5, the student–teacher will
5.1 Define and discuss how application of portfolio theory reduces risk of asset portfolios
held by multinational enterprises
5.2 Identify risk reduction of multinational enterprises through international diversification.
5.3 Explain the strategic decision to undertake foreign direct investment
5.4 Discuss the impact of political risk on foreign direct investment

Content
 International portfolio theory and diversification
 Foreign direct investment theory and political risk
 Multinational capital budgeting

Key terms:
 Compensation settlement  Global-specific risk
 Contingent exposure  Institutional risk
 Contingent foreign currency exposure  Optimal domestic portfolio
 Country-specific risk  Optimal international portfolio
 Cross-border acquisition  Protectionism
 Cultural risk  Real options
 Firm-specific risk  Security market line
 Foreign direct investment  Transfer risk

Unit 6: Managing Multinational Operations (8 Hrs)

Instructional Outcomes: At the end of Unit 5, the student–teacher will
6.1 Explain how international trade is financed
6.2 Discuss the types of trade relationships
6.3 Assess the trade dilemma and impacts thereof
6.4 Describe the main trade documents

Key terms:
 Branch banks  In-house banks
 Cash conversion cycle  Multilateral netting
 Cash pooling  Payment netting
 Conduits  Quotation period
 Correspondent banks  Self-liquidating bills
FNCE 480 International Finance – Course Outline – Page 9 of 17
  Tax credit  Wire transfers
 Unbundle

Content
 International Trade Finance

Course Schedule

Dates Course Content Reading Assignment/Activity Due

Current Multinational Financial Chapter 1
Week 1 Jan 9 – 13 Management: Opportunities and
Challenges.
The International Monetary System Chapter 2
Week 2 Jan 16 – 20
The Balance of Payments Chapter 3 Assignment # 1
Week 3 Jan 23 – 27
Financial Goals and Corporate Chapter 4
Week 4 Jan 30 – Feb 3 Governance Chapter 5
The Foreign Exchange Market
The Foreign Exchange Market Chapter 5
Week 5 Feb 6 – 10
International Parity Conditions Chapter 6
Foreign Currency Derivatives: Futures Chapter 7 Quiz # 1 (Chpt. 1-3)
Week 6 Feb 13 – 17 and Options

Interest Rate Risk and Swaps Chapter 8

Week 7 Feb 20 – 24 Foreign Exchange Rate Determination Chapter 9
and Intervention
Transaction Exposure Chapter 10 SECTIONAL # 1
Week 8 Feb 27 – Mar 3 (Chpt. 1-6)
Transaction Exposure Chapter 10 Assignment # 2
Week 9 Mar 6 – 10 Translation Exposure Chapter 11

Operating Exposure Chapter 12

Week 10 Mar 13– 17 The Global Cost and Availability of Chapter 13
Capital
Week 11 Mar 20 – 24 Funding the Multinational Firm Chapter 14 SECTIONAL # 2

FNCE 480 International Finance – Course Outline – Page 10 of 17

 (Chpt. 7-12)

Multinational Tax Management Chapter 15 Quiz # 2 (Chpt. 8-10)

Week 12 Mar 27 – 31
Apr 3 – 7 International Trade Finance Chapter 16
Week 13 Foreign Direct Investment and Chapter 17
Political Risk
Apr 10 – 14 Multinational Capital Budgeting and Chapter 18 SECTIONAL # 3
Week 14 Cross-Border Acquisition (Chpt. 13-17)

Week 15 Apr 17 – 21
Revision

Oct 19 FINAL EXAM

Rubric for Assessment of Written Assignments

Rating Poor Fair Good Very Good Student’s

Criteria and Score
weighting &Max
score
Headings & Absent/Poor Fairly Proper layout; Outstanding
Introduction Relevant relevant layout; great
/5
flow and
relevance
Organization Not Some Organized; events Very good
and flow of organized, organization, and material are organization,
information material and events fairly clear events and
events do organized; material are
/15
not flow beginning logically
logically and end hazy ordered, very
clear beginning
and end
Quality & Poor Reasonable Very relevant Excellent
applicability of quality; quality; material; clear supporting
information material connections link and subject details; strong /70
hardly can be made and direct links
applicable to subject to subject
FNCE 480 International Finance – Course Outline – Page 11 of 17
 Grammar & Very Moderate Negligible errors Excellent
spelling frequent volume grammar and
grammar grammar and spelling
/5
and/or spelling
spelling errors
errors
Neatness and Illegible Fairly legible Overall legible Excellent
general writing, writing, few writing; well- writing; very
presentation frequent corrections; formed clean paper; neat
cross-outs; little soiling characters; papers and attractive
/5
defaced clean and neatly assembly,
pages assembled, outstanding
illustrations illustrations
provided provided

Rubric for Assessment of Oral Assignments

ASSIGMENT: Date:

Presenter(s):
Presentation Components Possibl Actual Remarks
e score
Content Definition, interpretation of the topic 10

Soundness of argument (brief 10

description)
Research organization (brief 10
description)
Relevance & potential of 20
recommendation for nation building
Manifestation of Ability to start and continue a logical 10
reasoning progression of thought. Use of
supporting evidence and authors of
research literature.
Sub total 60
Delivery Eloquence, Persuasion 5
Pronunciation of words
Use of language
Voice Pitch & modulation 5
Control of emphasis
FNCE 480 International Finance – Course Outline – Page 12 of 17
 Gesture Eye contact 5
Facial expression
Use of hands
Stance Assurance & confidence 5

Team work Evidence of working collaboratively, 5

willingness to “fill in” on short notice

Use of time Carefully allocate time for introduction, 5

body, conclusion, accommodation of
questions.
Handling of Recognition of opposing position with 5
questions dignity. Exhibition of poise and
confidence in responding to questions.
Use of visual & 5
colour
Subtotal: 40
Total: 100
Ratings: 49- 59; Poor; 60-69- average; 70-80 – above average; 81-89 – good; 90-100 – excellent
Attendance Requirement:
Attendance is measured by the number of times you sign into LMS and do substantive work.
You are expected to sign in each session.

ONLINE COURSE RULES/POLICIES:

1. NO LATE ASSIGNMENTS (No assignment will be accepted late without prior arrangement
with the Instructor or/and a documented medical excuse.) At the lecturer’s discretion
acceptance of late assignments will incur a penalty. However, assignments exceeding one
class session will NOT be accepted. Early submission is allowed without penalty.

2. All papers and assignments submitted should include a certificate of authorship digitally
signed by the student.
3. Examinations will be automatically opened and will close after time expires. Unless you have
a valid reason for missing an exam, you will get a zero for that missed exam.
4. All assignments are posted on Aeorion LMS with specific cut-off or due dates. Please observe
those due dates. Late work can only be accepted if originally approved by the instructor.
5. Remember that discussion questions should include your substantive contribution and the
reaction to two of your colleagues are due on dates specified. Late submission will not be
accepted.

FNCE 480 International Finance – Course Outline – Page 13 of 17

6. All course requirements are to be submitted via Aeorion LMS and must not be sent by email.

7. Be aware that any submitted work for this course may be subjected to detection of plagiarism
and breach of copyright. DUPLICATION OF WORK AND PLAGIARISM CARRIES AN
AUTOMATIC ZERO FOR WORK PRESENTED.

8. Participation - students are required to login regularly to the online course website (how
often will be designated by instructor, e.g. 5 times per week). An audit/tracking feature
embedded in the eLearning system - Æorion DL, will be utilized to monitor student activity.
Students are also required to participate in all class activities such as discussion forums, online
chat or conference sessions and group collaboration.

9. Conduct within the Online Learning Environment - the same guidelines that apply to
traditional classes should be observed in the eLearning environment. Please use proper
netiquette when interacting with class members and the course instructor. Be sure to:
o avoid being judgmental of persons opinions,
o be courteous,
o avoid vernacular and or slang language,
o avoid using offensive language
o avoid attacking individuals. We are dealing with ideas, not personalities

ONLINE COURSE ACCESS

Students will use their Æorion user account credentials to login to the course through the Æorion
Learning Management System (Æorion LMS): http://aeorionde.ncu.edu.jm/. For assistance or
further details regarding access to online courses please visit:
https://aeorionde.ncu.edu.jm/corp/help.aspx

For first time users or those requiring further familiarity with the eLearning system, please visit
http://aeorionde.ncu.edu.jm/ and click on the orientation link.

University Information Systems Services (UNISS) provides technical support between the hours
of 8:00AM and 10:00PM Mondays through Thursdays and 8:00AM to 1:30PM on Fridays. The
help desk may be reached at (1-876-963-7300) or online chat for immediate assistance. Email
service requests can be directed to: helpdesk@ncu.edu.jm

POLICY ON SERVER UNAVAILABILITY OR OTHER TECHNICAL DIFFICULTIES

The university is committed to providing a reliable online course system to all users. However,
in the event of any unexpected server outage or any unusual technical difficulty which prevents
students from completing a time sensitive assessment activity, the instructor will provide an
appropriate accommodation based on the situation. Students should immediately report any
problems to the instructor and also contact the UNISS eLearning Help Desk:
http://uniss.ncu.edu.jm/elearninghelp , 1-876-963-7300. The instructor and the UNISS eLearning
Help Desk will work with the student to resolve any issues at the earliest possible time.

FNCE 480 International Finance – Course Outline – Page 14 of 17

TECHNICAL REQUIREMENTS
In addition to a competent level of computer and Internet literacy, there are some minimum
technical requirements must be met to enable a successful learning experience. Please review
the important technical requirements and the web browser configuration information at
http://aeorionde.ncu.edu.jm/ to ensure that your personal computer meets the outlined
requirements.
COMMUNICATIONS
This online course has integrated communication tools that may be used for to facilitate
interaction and communication. Other communication mediums such as email, instant
messaging and web conferencing tools may also be utilized throughout the course. For more
details please visit http://aeorionde.ncu.edu.jm/features .

Interaction with Instructor: The instructor will communicate with students primarily using the
Announcements and Discussions tools. Students may send personal concerns or questions to the
instructor via email or using the course messaging module. The instructor will, as much as
possible, reply to student’s queries within 72 hours.

LIBRARY SERVICES
Distance Learners will need an Æorion user account to access all of the library’s electronic
resources (reserves, journal articles, ebooks and search online databases) from off campus. For
NCU students living close to one of our extension campuses, a valid NCU ID card is required to
check out materials from the Library. For more information on library resources go to
http://www.ncu.edu.jm/library/

ASSIGNMENT SUBMISSION
Please use the Assignments link on the course menu or see the icon on the designated page to
upload assignments. You may click on the link for each assignment and follow the on-screen
instructions to upload and submit your file(s). Bear in mind that you may only submit each
assignment once, after which you should receive an onscreen confirmation. Please refer to the
Help menu for more information on using this tool. Please note: each assignment link will be
deactivated after the assignment due time. Additionally, unless stated otherwise, assignments are
typically due at 11:59 PM on the specified date. After your submission is graded, you may click
each assignment’s “Graded” tab to check the results and feedback. If necessary drafts of work for
mastery learning may be sent via email to the instructor for review prior to submission.

For team project assignments, one group member will submit the assignment for the group and
all group members will be able to view the results and feedback once it’s been graded.

Assignment Submission Instructions using Turnitin:

FNCE 480 International Finance – Course Outline – Page 15 of 17

Assignment(s) will be submitted and inspected via Turnitin, which is an integrated eLearning
tool for plagiarism detection. To submit your assignments, click on the Turnitin icon located on
the assignment submission web page. Next, click the submit icon. After which you will need to
upload your assignment file - please note that only one file may be submitted. To submit your
assignment, click on “Browse” and locate your file then click the Submit button. You will be
able to review before confirming your submission. You may return at a later time when the
report is available, typically within 24 hours, to review the Originality Report which indicates the
sources detected and how similar the assignment is to these sources. Please note it may take
some time for Turnitin to generate the originality report. For further information on using
Turnitin, please go to: http://www.turnitin.com/static/training.html.

COURSE EVALUATION
You are required to complete an evaluation of the course at the end of the semester/module.
These evaluations are used to garner valuable feedback that helps to improve the quality of
instruction. Online course evaluations will be made accessible around the end of the
semester/module and students will be informed via email or internal messages when they
become available.

FINAL EXAMINATION
A proctored final examination will be required for this course. Final exams are scheduled for
and administered on campus at the end of the semester. You will be required to present your
student’s ID and examination authorization form to the examiner.
If the campus for which the exam is slated is geographically inconvenient, arrangements may be
made to sit the examination at one of NCU’s extension campuses. Approval for this would need
to be secured from the instructor at least 4 weeks prior to the scheduled date for the exam.
NCU EMAIL
Northern Caribbean University is aware of the efficiency, effectiveness and overall importance
of communication between students and faculty/staff through electronic mail. At the same time,
e-mail raises some issues concerning security and the identity of each individual in an e-mail
exchange. The university encourages all official student email correspondence be sent only to a
student’s NCU e-mail address and that faculty or staff consider email from students official only
if it originates from a NCU student account. This allows the university to maintain a high degree
of confidence in the identity of all individual corresponding and the security of the transmitted
information. NCU furnishes each student with a free e-mail account that is to be used in all
communication with university personnel. The University Information Systems Services
Department at NCU also provides a method for students to have their NCU e-mail forwarded to
other accounts.
ACADEMIC HONESTY AND INTEGRITY
All students are expected to maintain a high level of responsibility with respect to academic
honesty. Students engaged in cheating or academic dishonesty of any form will be subject to
disciplinary penalties which include the possibility of failure for the course and/or dismissal from
the University. Cheating, dishonesty, plagiarism, copying portions of another student’s work are
FNCE 480 International Finance – Course Outline – Page 16 of 17
totally unaccepted and will be dealt with seriously. A minimum penalty will be a zero for the
course work submitted. Further action may be taken at the instructor’s discretion. In view of the
fact that such dishonesty harms the individual, all students and the integrity of the University,
policies on scholastic dishonesty will be strictly enforced.
CHEATING, DISHONESTY, AND PLAGIARISM
Any form of cheating is sufficient for an automatic “F” for the course. Cheating, dishonesty,
plagiarism, copying portions of another student’s work are totally unacceptable and will be dealt
with seriously. A minimum penalty will be a zero for the course work submitted. Further action
may be taken at the instructor’s discretion.

DISCLAIMER: The Department reserves the right to make adjustments to this course outline
as deemed necessary.

FNCE 480 International Finance – Course Outline – Page 17 of 17