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Unit outline_

FINC3011: International Financial Management

Semester 1, 2024 [Normal day] - Camperdown/Darlington, Sydney

Markets are increasingly globalised. There are very few businesses or industries that are not required to deal with issues such as foreign currency, foreign competition and direct investment. This unit is designed to allow students to extend their understanding of basic principles in finance to an international environment. Globalisation of markets introduces risks but also opens up profitable opportunities. Topics covered include: foreign currency valuation and markets; international parity conditions; measuring and managing foreign exposure; international portfolio management; capital budgeting and foreign direct investment; international tax management and international financing strategy.

Unit details and rules

Academic unit Finance
Credit points 6
Prerequisites
? 
FINC2012
Corequisites
? 
None
Prohibitions
? 
None
Assumed knowledge
? 

None

Available to study abroad and exchange students

Yes

Teaching staff

Coordinator Juan Yao, juan.yao@sydney.edu.au
Lecturer(s) Juan Yao, juan.yao@sydney.edu.au
The census date for this unit availability is 2 April 2024
Type Description Weight Due Length
Supervised exam
? 
Final exam
Closed book
50% Formal exam period 2 hours
Outcomes assessed: LO1 LO2 LO3 LO4 LO5 LO6 LO7
Supervised test
? 
Mid-semester exam
Closed book
20% Week 07
Due date: 12 Apr 2024 at 12:40
1 hour
Outcomes assessed: LO1 LO2 LO3 LO4 LO5
Assignment group assignment Group assignment
Written report
30% Week 11
Due date: 10 May 2024 at 23:59
10 A4 pages
Outcomes assessed: LO1 LO2 LO3 LO4 LO5 LO6 LO7 LO8
group assignment = group assignment ?

Assessment summary

  • Mid-semester exam: The mid-semester exam will cover the topics studied during weeks 1 to 5 inclusive. The mid-semester exam will be closed book and a non-programmable calculator will be allowed. Details of the format for the mid-semester exam will be provided on Canvas.
  • Group assignment: Students will work in groups of 3 or 4 members to write a report on particular topics covered during the semester. Instructions and marking criteria for the report will be provided on Canvas.
  • Final exam: The final exam will cover the topics studied throughout the semester. The final exam will be closed book and a non-programmable calculator will be allowed. Details of the format for the final exam will be provided on Canvas.

Assessment criteria

The University awards common result grades, set out in the Coursework Policy 2014 (Schedule 1).

As a general guide, a high distinction indicates work of an exceptional standard, a distinction a very high standard, a credit a good standard, and a pass an acceptable standard.

Result name

Mark range

Description

High distinction

85 - 100

Awarded when you demonstrate the learning outcomes for the unit at an exceptional standard, as defined by grade descriptors or exemplars outlined by your faculty or school. 

Distinction

75 - 84

Awarded when you demonstrate the learning outcomes for the unit at a very high standard, as defined by grade descriptors or exemplars outlined by your faculty or school.

Credit

65 - 74

Awarded when you demonstrate the learning outcomes for the unit at a good standard, as defined by grade descriptors or exemplars outlined by your faculty or school.

Pass

50 - 64

Awarded when you demonstrate the learning outcomes for the unit at an acceptable standard, as defined by grade descriptors or exemplars outlined by your faculty or school. 

Fail

0 - 49

When you don’t meet the learning outcomes of the unit to a satisfactory standard.

For more information see guide to grades.

Late submission

In accordance with University policy, these penalties apply when written work is submitted after 11:59pm on the due date:

  • Deduction of 5% of the maximum mark for each calendar day after the due date.
  • After ten calendar days late, a mark of zero will be awarded.

This unit has an exception to the standard University policy or supplementary information has been provided by the unit coordinator. This information is displayed below:

Any written work submitted after 11:59pm on the due date will be penalised by 5% of the maximum awardable mark for each calendar day after the due date. If the assessment is submitted more than ten calendar days late, a mark of zero will be awarded.

Academic integrity

The Current Student website provides information on academic integrity and the resources available to all students. The University expects students and staff to act ethically and honestly and will treat all allegations of academic integrity breaches seriously.

We use similarity detection software to detect potential instances of plagiarism or other forms of academic integrity breach. If such matches indicate evidence of plagiarism or other forms of academic integrity breaches, your teacher is required to report your work for further investigation.

Use of generative artificial intelligence (AI) and automated writing tools

You may only use generative AI and automated writing tools in assessment tasks if you are permitted to by your unit coordinator. If you do use these tools, you must acknowledge this in your work, either in a footnote or an acknowledgement section. The assessment instructions or unit outline will give guidance of the types of tools that are permitted and how the tools should be used.

Your final submitted work must be your own, original work. You must acknowledge any use of generative AI tools that have been used in the assessment, and any material that forms part of your submission must be appropriately referenced. For guidance on how to acknowledge the use of AI, please refer to the AI in Education Canvas site.

The unapproved use of these tools or unacknowledged use will be considered a breach of the Academic Integrity Policy and penalties may apply.

Studiosity is permitted unless otherwise indicated by the unit coordinator. The use of this service must be acknowledged in your submission as detailed on the Learning Hub’s Canvas page.

Outside assessment tasks, generative AI tools may be used to support your learning. The AI in Education Canvas site contains a number of productive ways that students are using AI to improve their learning.

Simple extensions

If you encounter a problem submitting your work on time, you may be able to apply for an extension of five calendar days through a simple extension.  The application process will be different depending on the type of assessment and extensions cannot be granted for some assessment types like exams.

Special consideration

If exceptional circumstances mean you can’t complete an assessment, you need consideration for a longer period of time, or if you have essential commitments which impact your performance in an assessment, you may be eligible for special consideration or special arrangements.

Special consideration applications will not be affected by a simple extension application.

Using AI responsibly

Co-created with students, AI in Education includes lots of helpful examples of how students use generative AI tools to support their learning. It explains how generative AI works, the different tools available and how to use them responsibly and productively.

Support for students

The Support for Students Policy 2023 reflects the University’s commitment to supporting students in their academic journey and making the University safe for students. It is important that you read and understand this policy so that you are familiar with the range of support services available to you and understand how to engage with them.

The University uses email as its primary source of communication with students who need support under the Support for Students Policy 2023. Make sure you check your University email regularly and respond to any communications received from the University.

Learning resources and detailed information about weekly assessment and learning activities can be accessed via Canvas. It is essential that you visit your unit of study Canvas site to ensure you are up to date with all of your tasks.

If you are having difficulties completing your studies, or are feeling unsure about your progress, we are here to help. You can access the support services offered by the University at any time:

Support and Services (including health and wellbeing services, financial support and learning support)
Course planning and administration
Meet with an Academic Adviser

WK Topic Learning activity Learning outcomes
Week 01 Introduction Lecture (2 hr) LO1 LO2 LO3
Week 02 Foreign exchange market Lecture and tutorial (3 hr) LO1 LO2 LO3
Week 03 Interest rate parity conditions Lecture and tutorial (3 hr) LO3 LO4
Week 04 Purchasing power parity and real exchange rates Lecture and tutorial (3 hr) LO3 LO4
Week 05 Currency futures and options Lecture and tutorial (3 hr) LO3 LO5
Week 06 Interest rate and foreign currency swaps Lecture and tutorial (3 hr) LO5 LO8
Week 07 Mid-term review and practice Group work preparation Lecture and tutorial (3 hr) LO1 LO2 LO3 LO4 LO5 LO8
Week 08 Exchange rate determination and forecasting Lecture and tutorial (3 hr) LO3 LO4 LO8
Week 09 Foreign currency hedging Lecture and tutorial (3 hr) LO5 LO6 LO7 LO8
Week 10 Real exchange rate risk Lecture and tutorial (3 hr) LO6 LO7
Week 11 International debt and equity financing Lecture and tutorial (3 hr) LO6 LO7
Week 12 International capital market equilibrium Lecture and tutorial (3 hr) LO7 LO8
Week 13 Professional development Lecture and tutorial (3 hr) LO1 LO2 LO3 LO4 LO5 LO6 LO7

Study commitment

Typically, there is a minimum expectation of 1.5-2 hours of student effort per week per credit point for units of study offered over a full semester. For a 6 credit point unit, this equates to roughly 120-150 hours of student effort in total.

Required readings

Bekaert, G.J. and Hodrick, R.J. (2017), International Financial Management, 3rd edition, Cambridge, ISBN 978-1-107-11182-0.

  • Week 1: Chapter 2; Week 2: Chapter 3
  • Week 3: Chapters 6 and 7; Week 4: Chapter 8
  • Week 5: Chapter 20; Week 6: Chapter 21
  • Week 7: Chapters 11 and 12; Week 9: Chapter 17
  • Week 10: Chapter 9; Week 11: Chapter 10
  • Week 12: Chapter 13

Chapters from the textbook will be supplemented by journal articles. All the journal articles can be accessed through the Library Reading List, available on Canvas.

Learning outcomes are what students know, understand and are able to do on completion of a unit of study. They are aligned with the University's graduate qualities and are assessed as part of the curriculum.

At the completion of this unit, you should be able to:

  • LO1. explain and identify the risks as well as the opportunities that underpin the financial operations of business firms operating in an environment of open and integrated financial markets
  • LO2. apply basic exchange rate concepts to foreign exchange markets as well as describe and explain how the foreign exchange market is organised and operates
  • LO3. understand and effectively apply the concepts of arbitrage and speculation in international financial markets
  • LO4. explain and effectively apply, fundamental international parity conditions such as Purchasing Power Parity and Covered and Uncovered Interest Parity
  • LO5. explain how currency derivative contracts such as futures, forwards, swaps and options can be used to hedge and speculate based on anticipated exchange rate movements. Apply different derivative tools to hedge and manage foreign exchange risk
  • LO6. recognise and explain the different forms of foreign exchange exposure that a business enterprise may confront and describe how such different exposures can be managed
  • LO7. evaluate why domestic firms may wish to indulge in foreign currency financing and investment as well as comprehend how the choice is made between domestic currency and foreign currency financing and investment decisions. Evaluate the benefits and risks of off-shore financing
  • LO8. work in groups to analyse and evaluate the hedging/financing practice of a multinational firm

Graduate qualities

The graduate qualities are the qualities and skills that all University of Sydney graduates must demonstrate on successful completion of an award course. As a future Sydney graduate, the set of qualities have been designed to equip you for the contemporary world.

GQ1 Depth of disciplinary expertise

Deep disciplinary expertise is the ability to integrate and rigorously apply knowledge, understanding and skills of a recognised discipline defined by scholarly activity, as well as familiarity with evolving practice of the discipline.

GQ2 Critical thinking and problem solving

Critical thinking and problem solving are the questioning of ideas, evidence and assumptions in order to propose and evaluate hypotheses or alternative arguments before formulating a conclusion or a solution to an identified problem.

GQ3 Oral and written communication

Effective communication, in both oral and written form, is the clear exchange of meaning in a manner that is appropriate to audience and context.

GQ4 Information and digital literacy

Information and digital literacy is the ability to locate, interpret, evaluate, manage, adapt, integrate, create and convey information using appropriate resources, tools and strategies.

GQ5 Inventiveness

Generating novel ideas and solutions.

GQ6 Cultural competence

Cultural Competence is the ability to actively, ethically, respectfully, and successfully engage across and between cultures. In the Australian context, this includes and celebrates Aboriginal and Torres Strait Islander cultures, knowledge systems, and a mature understanding of contemporary issues.

GQ7 Interdisciplinary effectiveness

Interdisciplinary effectiveness is the integration and synthesis of multiple viewpoints and practices, working effectively across disciplinary boundaries.

GQ8 Integrated professional, ethical, and personal identity

An integrated professional, ethical and personal identity is understanding the interaction between one’s personal and professional selves in an ethical context.

GQ9 Influence

Engaging others in a process, idea or vision.

Outcome map

Learning outcomes Graduate qualities
GQ1 GQ2 GQ3 GQ4 GQ5 GQ6 GQ7 GQ8 GQ9

This section outlines changes made to this unit following staff and student reviews.

No changes have been made since this unit was last offered.
  • Face-to-face: Lectures will be used to set the scene and show how the topic fits into the overall unit of study aims. Tutorials will help you to further your understanding and apply concepts to more difficult problems.
  • Print: Chapters from the textbook and specified articles should be read prior to attending the lecture each week. Homework problems will be assigned at the end of lectures and these should be completed before coming to the tutorial the following week.
  • Online: Canvas (https://canvas.sydney.edu.au) provides the main online learning support. You should log in at least twice per week to keep abreast of unit-wide announcements and use the resources to supplement your learning. Lecture slides will be available the day before each lecture for you to download from Canvas. Solutions to homework problems will be made available online after the problems are discussed in the tutorial.

Disclaimer

The University reserves the right to amend units of study or no longer offer certain units, including where there are low enrolment numbers.

To help you understand common terms that we use at the University, we offer an online glossary.