Economics 249 Fall 2014

International Finance
Instructor: Dr. Edda Claus
Email: eclaus@wlu.ca
Office: P2028A
Telephone: 884-0710 ext. 4570
Office Hours: Wednesdays 9am to 11am (Or email me for an appointment.)

Calendar Description
This course is an introduction to issues in international finance. Topics may include
international financial institutions, the balance of payments, exchange rates, international
borrowing and lending and their relationship to international trade and the domestic
economy.
Course objective:
Canada is a small open economy. Not only do goods and services cross national borders, capital
also flows in and out of the country. In this course we will learn how these flows are recorded
in the balance of payments and how the foreign exchange market works. We will also study
international banking and money markets. We will examine in detail international bond and
equity markets, futures and options on foreign exchange, interest rate and currency swaps as
well as international portfolio investment. We will close the semester with analysing foreign
direct investment and cross border acquisitions.
Course evaluation:
Assignment 1 Thursday, September 25, 2014, 7pm 5%
Assignment 2 Tuesday, October 28, 2014, 7pm 5%
Midterm 1 Sunday, October 19, 2014, 7:00-8:30 PM 20%
Midterm 2 Sunday, November 9, 2014, 7:00-8:30 PM 20%
Final During examination period 50%

1


Please note carefully:
Students who miss a term test or an assignment for any reason will have the entire weight from
that term test or assignment transferred to the final examination. The final examination will
cover all the material in the course. There are no deferred term tests or assignments for any
reason. You do not need to document the reason to miss a midterm on either October 19 or
November 9.
The assignments are due in class. If you are unable to attend class, please DO NOT put your
assignments under my door. Also, please do not send it to me via e-mail, or via
MyLearningSpace. If you cannot attend class, please leave your assignment at the courses drop
box outside the Economics Office, located at P3082, by 7pm on the due date.
If you have a complaint about your mark on either your assignments or midterm exams, you
need to outline your complaint in writing within one week of receiving that mark. I will not
engage in discussions regarding marking after class.
Course material
Text: International Financial Management: Canadian Perspectives, Third Edition. Donald
J.S Brean, Cheol S. Eun and Bruce G. Resnick. McGraw-Hill Ryerson: Toronto, 2014.
Lecture slides are posted on MLS under Content, Lectures. The lecture slides are designed to
have material added to them during the lectures. At least one week prior to each midterm and
prior to the final exam, practice questions and suggested answers will be posted on MLS under
Content, Problem Sets for the course. You are advised to try the questions without looking at
the answers, and then to check your answers.
2



Wilfrid Laurier University uses software that can check for plagiarism. Students may
be required to submit their written work in electronic form and have it checked for
plagiarism.
Accessible Learning:
Students with disabilities or special needs are advised to contact Lauriers Accessible
Learning Centre for information regarding its services and resources. Students are
encouraged to review the Calendar for information regarding all services available on
campus.
Academic Misconduct:
You are reminded that the University will levy sanctions on students who are found to have
committed, or have attempted to commit, acts of academic or research misconduct. You are
expected to know what constitutes an academic offense, to avoid committing such offenses,
and to take responsibility for your academic actions. For information on categories of
offenses and types of penalty, please consult the relevant section of the Undergraduate
Academic Calendar. If you need clarification of aspects of University policy on Academic and
Research Misconduct, please consult your instructor.
Mobile Devices in the Classroom:
Mobile devices, specifically laptops and tablets may be used in this course for educational
purposes only (i.e., learning directed related to the course). Those who choose to use such
devices, except for accessibility reasons, are asked to sit at the back of the room. Use of all
other mobile devices is not permitted in class. Off-task use (e.g., Facebook, texting, other)
will result in your device being confiscated for the class and/or being asked to leave the
classroom for all or part of the class or course.


3


Course Outline
Part One: Foundations of International Financial Management
Chapter 1: Globalization and the Multinational Firm
Chapter 2: International Monetary Systems
Chapter 3: Balance of Payments
Chapter 4: The Market for Foreign Exchange
Chapter 5: International Parity Relationships and Forecasting Foreign Exchange Rates
Part Two: World Financial Markets and Institutions
Chapter 6: International Banking and Money Market
Chapter 7: International Bond Market
Chapter 8: International Equity Markets
Chapter 9: Futures and Options on Foreign Exchange
Chapter 10: Interest Rate and Currency Swaps
Chapter 11: International Portfolio Investment
Part Four: Financial Management of the Multinational Firm
Chapter 15: Foreign Direct Investment and Cross-Border Acquisitions
4