UNIVERSITY OF SOUTHERN CALIFORNIA

Marshall School of Business

INTERNATIONAL FINANCIAL MANAGEMENT/FBE 436

Aris Protopapadakis
COURSE SYLLABUS
Fall 2005
The class meets in HOH 405, on Mondays & Wednesdays@ 2:00 to 3:50 pm.
INSTRUCTOR
Professor Aris Protopapadakis
Office:
Hoffman Hall 702E
Phone:
213-740-6537
Fax:
213-740-6650
aris.protopapadakis@marshall.usc.edu
E-mail:
Course Material: On Blackboard
OFFICE HOURS
Office hours are 11:00 am to 12:00 noon on Monday and Wednesday, and 2:00 to 3:15 pm on
Friday. My schedule varies on Fridays so make sure you check with me first. Below is my schedule
for the Fall semester; my office hours are indicated by the shaded boxes. Please stop by during office
hours if you have any questions, difficulties, or if you just want to talk about the course or anything else.
If you know when you are planning to come, please let me know in advance so that I will be sure to be
in my office (I tend to wander into other peoples offices). If my office hours are inconvenient, feel free
to make arrangements with me in class or by e-mail for a mutually convenient time; phone messages
dont work.
Time

Monday

Tuesday

Wednesday

Thursday

Friday

8 10

n.a.

n.a.

n.a.

n.a.

n.a.

10 - 12

11:00
12:00

n.a.

11:00
12:00

n.a.

Seminar

12 2

n.a.

n.a.

n.a.

n.a.

Seminar

24

Class
HOH 405

n.a.

Class
HOH 405

n.a.

2:00 - 3:15
check w/me

n.a.

Seminar

n.a.

n.a.

45
5 6:30

n.a.
Class
JPK 102

n.a.

Class
JPK 102

FBE 436

COURSE OBJECTIVES
The course will help you develop critical skills in key areas of corporate international financial
management through lectures, case analyses, and homework problems. The major topics we study are
the assessment and management of foreign exchange risk exposure, the valuation of foreign investment
and international capital budgeting decisions. We will also study many of the financial instruments
available in the international financial markets.
The course is organized around four topics of international financial management:
(i)
foreign exchange exposure,
(ii)
cross-border valuation,
(iii)
the foreign exchange market, and
(iv)
international financial instruments.
Lecture time is devoted to each topic, there is problem set for each topic, and there is a mini-exam for
each topic. Three cases are related to foreign exchange exposure and three to cross-border valuation.
As a consequence of this organization, the first part of the course is more heavily weighted towards
lectures while the latter part is more heavily weighted towards cases.
REQUIRED MATERIALS
Book:
Foundations of Multinational Financial Management by Alan Shapiro, 5th edition, Allyn and Bacon,
2005.
Course Packet:
Lufthansa: To Hedge Or Not To Hedge; Ivey 9B00N022.
Aspen Technology Inc.: Currency Hedging Review. HBS 9-296-027
Simmons Japan Ltd. HBS 9-289-001.
Tom.Com: Valuation of an Asian Internet Co. Ivey 9B00N013.
Strategy Under Uncertainty, by Hugh Courtney, Jane Kirland, and Patrick Viguerie. Harvard
Business Review.
Cases:
Lufthansa: To Hedge Or Not To Hedge,
Aspen Technology Inc.: Currency Hedging Review,
Simmons Japan Ltd,
Tom.Com: Valuation of an Asian Internet Co.
Austin Gladstone Inc. To be distributed (2 parts).
COURSE REQUIREMENTS AND GRADING
The requirements for the course and the associated grading is:

FBE 436

Requirement

Grade Value

Four exams
Lufthansa case report (individual report)
Case reports (team reports)
Class participation
Attendance and connectivity
Five problem sets to be handed-in according to the
schedule

30% (7.5% each)

5%
30% (6.0% each)
15%
7.5%
12.5%. Graded based
on demonstrated effort.

GRADING
The final grade is based on a curve. I adhere to the school guidelines, which suggest an average grade
of 3.15 out of 4.00 for undergraduate elective courses. Since this is halfway between a B and a B+
average, it means more B+ than B- grades and more As than Cs. I do not assign letter grades to
individual exams and team reports. However, I will occasionally post the full distribution of all your
grades, so you can tell where you stand in the class. Ws are counted as Fs in the computation of the
average class grade.
The Federal government and the University are very concerned with the privacy of your academic
information. Consequently, I cannot post anywhere your grades with your name or even with your
truncated social security number or your University ID number. Therefore, if you wish to have your
grades posted in Blackboard, you must give me a signed statement with a number code known only to
you. I will then post your grades under this code. I will accept any number you give me but for your
own security you should not use you social security number, your home or cell phone numbers. A form
for this purpose is attached.
NOTE:
In order to receive a passing grade for the course, you must
1. Have a combined grade from the four exams, the Lufthansa case, homework, class
participation, and attendance at least equal to 75% of the class average.
2. You must turn in the Peer Evaluation form related to the case teams.
EXAMS
Each exam will address the subject matter that precedes it; exams are not cumulative. The exams are
intended to assess how well you understand the main ideas. You will not find trick, off-the-wall, or
obscure questions in these exams. Each exam will cover the required readings from the text and all the
material covered in class.
The exams consist of numerical problems, multiple choice questions, and possibly short essays. Each
exam will take approximately hour. All exams will be closed-book, closed-notes. I will provide key
formulae for each exam. Any violation of the code of academic honesty will be treated severely.

FBE 436

MAKE UP EXAMS
Current department policy to which I adhere is the following:
No make-up midterm or final exams will be allowed. If for any reason a
student must miss an exam, he/she will be given a 0 for that exam. If
they have an extenuating circumstance that prevents them from taking an
exam, they must discuss their reason with the instructor before the time of
the exam. Current department policy is that a student will not be given a
make-up exam unless he/she obtains a written permission from the
instructor in advance. In addition, a student must be able to document
the extenuating circumstance.
The permission form is attached to this syllabus.
CASES
Case preparation is an important part of the learning process in the course, because it will help you learn
to apply your new international financial management skills to real business problems. In order to get
the most out of the cases and prepare for case discussions as effectively as possible, I will ask you to
prepare the cases as teams. Effective teamwork should both lighten the workload and improve the
quality of learning for everyone.
Students must form teams of 4 students by the date indicated on the schedule. Students who do not
have a team by the deadline will be assigned teams in class. Teams are not final until I approve them.
Each team is asked to prepare a case report (or memorandum) that analyses the case and presents
recommendations, except for the Lufthansa case see below. Case reports are to be handed in at the
beginning of class. The length cannot exceed four (4) typed, double-spaced pages (plus supporting
appendices of exhibits, graphs, and tables). Please keep a copy for yourselves for the class discussion.
No case reports will be accepted after the class has met. Questions around which you should organize
your memorandum are listed in a separate document called Case Instructions_2005.
For the Lufthansa case, each student is required to submit a no-more-than-one-page summary of the
case. This summary should concentrate on the key issues. You dont have to solve this case! You
may discuss the case with anyone and in particular with your team members but the report must be your
own work.
I will lead the class discussion mainly by asking questions. This means you must be prepared to
participate in the class discussion hence the participation grade. Every student must be prepared to
explain to the class and me how his or her team dealt with the specific issues in the case and why. The
discussion will be extensive and will focus on the specifics of each case.

FBE 436

At the end of the term each student is to submit a Peer Evaluation. You must evaluate the overall
contribution of each team member, including your own. This peer evaluation grade will multiply your
case grade. A 100% peer eval grade will leave your case grade unchanged; a 75% peer evaluation
grade will give you s of your case grade, etc. The impact of a poor peer evaluation grade can be
substantial! You will get an incomplete in the course if you dont turn in the peer evaluation form. The
necessary form is attached to this syllabus.
Students often ask for copies of my notes for the cases. I will not distribute copies of my solution or
that of the author(s) to any case. There are two reasons for this. First, my approach is not necessarily
the only correct one, and distributing my approach would give it undue authority. Second, distribution
of such case notes effectively renders that case unusable in the future, since it reduces the incentives for
future students to expend time and effort in case preparation. Furthermore, since we use cases that we
believe are the most useful and informative, replacements, even when they are available, are frequently
of lower educational value. For these reasons, none of the faculty teaching case courses distributes case
notes or analyses; indeed under copyright laws the faculty are not authorized by HBS to distribute case
teaching notes.
CLASS PARTICIPATION
Class participation is a central aspect of case method learning. During class I will keep track and
record meaningful participation by students; I will also keep track of negative participation. Well before
we start the case discussions I will make up a seating chart; you can insure of being correctly identified
by always being at your assigned seat. I will call on you even when you have not expressed an interest
in participating. Consistent lack of preparation when called upon will result in lowering your
participation grade.
ATTENDANCE
I will circulate an attendance sheet each class. Please make sure you sign next to your name by the end
of class. I will start taking attendance after the first two weeks of class. There will be 24 remaining
class sessions; if you attend 20 of these you will have a perfect attendance grade. This arrangement
gives you 4 pre-excused absences to be used for the usual schedule conflicts, job interviews,
sickness, etc.
Please be sure to
1. sign your name the same way all the time,
2. never sign anyone elses name.
BLACKBOARD CONNECTION
All course material will be on Blackboard. In addition it will be my principal means of communication
with you outside of class. Therefore, it is important that,
1. You can get on Blackboard and know how to download the files,
2. That you have your messages forwarded to your favorite e-mail account so that you can receive
them promptly,
3. That your e-mail account is functioning and not overfull.

FBE 436

FBE 436

After the end of the drop-add period I will send all of you a message through Blackboard to which you
should respond promptly. This will complete your connectivity requirement. However, if during the
semester your account refuses to accept mail or is otherwise unavailable, it will reduce your
connectivity grade. Note that if your account is unavailable it means that I cannot warn you that your
grade is being marked down.
HOMEWORK
The due dates for the homework assignments are listed on the course schedule. The problem sets will
be posted in Blackboard. Each student is responsible for turning in her or his homework at the
beginning of class on the due dates. You get full credit for an honest effort by trying to do the
homework and turning it in on time. You will not be graded on the accuracy of your answers. I will
hand out answers when I return the homework to you. I encourage you to work on the homework
problems with your classmates or your team members. However, each student must submit his or her
own homework!
GRADE APPEAL
If you think there is an error or you otherwise have reason to question a grade, you can appeal to me in
writing, within one week after you have received the grade. Be clear and specific about the reason for
your appeal. As a result of re-grading your score may increase or decrease.
USEFUL SKILLS
An important technical skill required for the course is the ability to use a spreadsheet program. Most
case preparation involves developing analysis on a spreadsheet. You are welcome to bring notebook
computers to class. However, you may not connect your computers to the Internet at any time
during class, unless I explicitly ask you to do so for class purposes. If you are unfamiliar with
EXCEL or a similar spreadsheet program, sign up for a suitable tutorial offered by the Keck center or
go through the on-line tutorials that come with EXCEL.
ACADEMIC INTEGRITY
The following is from section 10.0 of the USC publication SCAMPUS:
Because the functions of a university depend on honesty and integrity
among its members, the university expects from its students a higher
standard of conduct than the minimum required to avoid disciplinary action.
http://www.usc.edu/dept/publications/SCAMPUS/governance/gov03.html
Furthermore, section 11.00 in the same publication outlines behavior violating university standards and
appropriate sanctions. Acts of dishonesty include, but are not limited to, cheating, plagiarism,
falsification of official records and documents, theft My personal policy will be to assign the harshest
penalties allowed for any given violation.

FBE 436

The use of unauthorized materials, communication with fellow students during an examination,
attempting to benefit from the work of another student, and similar behavior that defeats the
intent of an examination or other class work is unacceptable to the University. It is often
difficult to distinguish between a culpable act and inadvertent behavior resulting from the
nervous tensions that accompany examinations. Where a clear violation has occurred, however,
the instructor may disqualify the student's work as unacceptable and assign a failing mark on the
paper. (SCampus)

ACADEMIC ACCOMMODATIONS BASED ON A DISABILITY

Any student requesting academic accommodations based on a disability is required to register
with Disability Services and Programs (DSP) each semester. A letter of verification for
approved accommodations can be obtained from DSP. Please be sure the letter is delivered to
me as early in the semester as possible. DSP is located in STU 301 and is open 8:30 a.m. - 5:00
p.m., Monday through Friday. The phone number for DSP is (213) 740-0776.

FBE 436

DUE DATES OF DELIVERABLES

Lufthansa report
Homework #1
Test #1
Form team & report
Homework #2a
Homework #2b
Test #2
Aspen Technologies
Homework #3
Test #3
Simmons
Tom.Comt
Homework #4
Austin Gladstone Valuation
Austin Gladstone FX exposure
Homework #5
Test #4 (Final)

09/07
09/07
09/12
09/12
09/21
09/26
09/28
10/05
10/31
10/31
11/02
11/09
11/14
11/16
11/28
11/30
12/09

MATERIAL TO BE COVERED IN EACH TEST

Test #1:
FX markets
PPP
Eurocurrencies
Forecasting
Test #2:
FX exposure
Test #3:
Cross-border valuation
Test #4:
FX regimes
Central Bank Intervention
Forwards
Futures
IRPs
Swaps
Global equity markets
Case questions

FBE 436

COURSE SCHEDULE AND READING ASSIGNMENTS FOR FBE 436

Date

Topic

Assignment Due

Week 1:
08/22
08/24

Course Intro. Get acquainted.

Discussion of the case studies & reports.
Foreign Exchange --FXmarkets: in Ch. 7
Eurocurrencies: in Ch. 13

Week 2:
08/29

PPP, Real FX rates: in Ch. 4

08/31

Forecasting FX rates: in Ch. 4

Week 3:
09/05
09/07

Holiday
Homework #1 due
Lufthansa report due
Last day to register & last day to drop without a W: 9/9

Lufthansa; FX Economic Exposure: Ch. 11

Week 4:
09/12

Test # 1:
FX Exposure: Ch. 11

09/14

FX Exposure

Form teams by today

Week 5:
09/19

FX Exposure

Respond to the connectivity

message by today

09/21

FX Exposure
Ch. 10.5 7, 11.5
Managing FX Exposure
Recommended: Ch. 10.1 - 4 Measuring
Translation & Transaction Exposure

Homework #2a due

Interest Rate Parities; UIRP, CIRP: in Ch. 4

Homework #2b due

Week 6:
09/26
09/28

Test #2:
Catch Up

Week 7:
10/03

UIRPT, CIRPT

10/05

Aspen Technologies

Aspen Technologies report due

10

FBE 436

Date

Topic

Assignment Due

Week 8:
10/10

Cross-Border Valuation: Chs. 14, 17

Handout

10/12

Cross-Border valuation

Week 9:
10/17

Cross-Border valuation

10/19

Cross-Border valuation

Week 10:
10/24

Cross-Border valuation

10/26

Cross-Border valuation
Recommended: Ch. 6 Country Risk

Week 11:
10/31
11/02

Test #3:

Homework #3 due

Catch up
Simmons

Simmons report due

Week 12:
11/07

Forwards: in Ch. 7
Futures: in Ch. 8

11/09

Tom.Com

Tom.Com report due

Last day to drop with a W: 11/11

Week 13:
11/14

FX regimes: in Ch. 2; Central bank intervention.

Homework #4 due

11/16

Austin Gladstone; Valuation

Gladstone valuation report due

Week 14:
11/21

Introduction to Swaps: in Ch. 9

11/23

No Class

Week 15:
11/28

Austin Gladstone; FX exposure

Gladstone FX exposure report

due

11/30

Global equity markets. Ch. 15

Homework #5 due

Week 16:
12/09

Final Exam Test #4: 2:00 4:00 pm

11

FBE 436

12

UNIVERSITY OF SOUTHERN CALIFORNIA

MARSHALL SCHOOL OF BUSINESS

FBE 436 INTERNATIONAL FINANCIAL MANAGEMENT

RELEASE FORM FOR GRADE POSTING
The Department of Education has notified us that we may not post grades electronically or otherwise that
contain any personal identifiable information. This includes the use of abbreviated social security numbers.

If you wish to be able to access your grade information in Blackboard you must provide me with a 7digit identification number of your own choosing and fill out and sign this form. Please return this form to
me in class.

,
Last Name

First Name

I ask that you post my grades on a list or on the web, using the following 7-digit identification number.
Note: This number may not start with a zero

My identification number

Signature

Date

FBE 436

LETTER OF PERMISSION

This is to verify that I, Aris Protopapadakis

have given permission to

INSTRUCTOR

to be excused

STUDENT

from the

SOCIAL SECURITY #

in

FBE 436

MID-TERM/FINAL

during this

COURSE

TERM/YEAR

semester. The student must make alternative arrangements to take a make-up exam.

,
INSTRUCTOR SIGNATURE

.
DATE

FBE 436

PEER EVALUATION FORM FBE 436

Confidentiality will be maintained.
Evaluating Students Name:________________________________________________
Team No:_____________
Instructions: Each team member is asked to assess the relative contributions/efforts of all the team
members. This applies to both the quality and quantity of contributions to the project and to the
cohesiveness and energy of the team.
Divide 100 points between all members of the group (including yourself).
Please list the names of all your team members (including yourself) in the table below. Assign points to
everyone and provide an explanation/reasoning for your distribution.
Team Member Name

Total

Rating

Explanation/Reasoning