International Finance
Bachelor	TR-NQF-HE: Level 6	QF-EHEA: First Cycle	EQF-LLL: Level 6

General course introduction information

Course Code:

FNS305

Course Name:

International Finance

Course Semester:

Fall

Course Credits:

Theoretical	Practical	Credit	ECTS
3	0	3	6

Language of instruction:

Course Requisites:

Does the Course Require Work Experience?:

Type of course:

Compulsory

Course Level:

Bachelor

TR-NQF-HE:6. Master`s Degree

QF-EHEA:First Cycle

EQF-LLL:6. Master`s Degree

Mode of Delivery:

Face to face

Course Coordinator :

Prof. Dr. GÖKÇE TUNÇ

Course Lecturer(s):

Dr.Öğr.Üyesi TURGAY MÜNYAS
Prof. Dr. HALİT TARGAN ÜNAL
Prof. Dr. GÖKÇE TUNÇ

Course Assistants:

Course Objective and Content

Course Objectives:

The main objective of this course is to introduce the topics of globalization of the World economy; evolution of the international monetary system; European monetary system; fixed versus flexible exchange rate regimes; Balance-of-payments accounting; balance-of-payments accounts; the foreign exchange market; the spot market and forward market; international parity relationships and forecasting foreign exchange rates; interest rate parity, purchasing power parity, the Fisher effects; international bond market; international equity market.

Course Content:

Globalization of the World economy; evolution of the international monetary system; European monetary system; fixed versus flexible exchange rate regimes; Balance-of-payments accounting; balance-of-payments accounts; the foreign exchange market; the spot market and forward market; international parity relationships and forecasting foreign exchange rates; interest rate parity, purchasing power parity, the Fisher effects; international bond market; international equity market.

Learning Outcomes

The students who have succeeded in this course;

Learning Outcomes

1 - Knowledge
Theoretical - Conceptual
1) Introduce the various types of international monetary systems under which the world economy can function and has functioned at various times.
2) Describe the importance of balance of trade and balance of payments to the development of macroeconomic policy.
3) Identify opportunities for arbitrage and discuss methods to exploit these opportunities in the foreign exchange market.
4) Describe the organization of the foreign exchange market and distinguish between the spot and forward transactions.
5) Define several key international parity relationships, such as interest rate parity and purchasing power parity and judge whether international parity conditions are met.
2 - Skills
Cognitive - Practical
3 - Competences
Communication and Social Competence
Learning Competence
Field Specific Competence
Competence to Work Independently and Take Responsibility

Lesson Plan

Week	Subject	Related Preparation
1)	• Syllabus • Discuss Library Orientation Course, Instructor to verify completion • What’s Special about “International” Finance? • Goals for International Financial Management in accordance with the ethical considerations throughout the world. • Globalization of the World Economy • Evaluation of Multinational Corporations	Read the syllabus Read of Seyidoğlu (2013), Chapter 1
2)	• Identify the stages of corporate expansion overseas by which companies gradually become MNCs • Identify the advantages of being multinational, including the benefits of international diversification • Describe the general importance of financial economics to multinational financial management • Explain the theory of comparative advantage • Discuss why do firms become multinational • Theory of Comparative Advantage • What is Different about Global Financial Management? • Market Imperfections • Globalization Process • The Process of Overseas Expansion by Multinationals	Reading of Seyidoğlu(2013), Chapter 4. Answer the research questions at the end of the chapter and preparing for class discussion.
3)	• Structure and Functions of the Foreign Exchange Market • Traders of the foreign exchange market • Spot exchange rate quotation • Buying-selling exchange rate margin • Spot currency transactions • Alternative expressions of cross rates	Reading of Seyidoğlu(2013), Chapter 4. Answer the research questions at the end of the chapter and preparing for class discussion.
4)	• Triangle (Three-ended) arbitrage • Spot market microstructure • Forward exchange rate quotation • Long and short forward positions • Forward cross rates • Swap transactions • Forward premium	Reading of Seyidoğlu(2013), Chapter 6. Answer the research questions at the end of the chapter and preparing for class discussion.
5)	• Interest rate parity and the law of one price • Purchasing power parity • Fisher effect • International Fisher effect	Reading of Seyidoğlu(2013), Chapter 5. Answer the research questions at the end of the chapter and preparing for class discussion. Prepare for the quiz.
6)	• Interest rate parity • Guaranteed interest rate arbitrage • Determination of interest rate parity and exchange rate • Reasons for deviation from interest rate parity • Estimation of exchange rates • Effective market approach • Fundamental analysis approach • Technical analysis approach • Performance of estimation methods • Quiz	Reading of Seyidoğlu(2013), Chapter 7. Answer the research questions at the end of the chapter and preparing for class discussion. Preparation for the midterm exam.
7)	Midterm Exam	None
8)	• Features of futures contracts • Currency futures markets • Features of FX futures contracts • Similarities and differences between foreign exchange futures and forward contracts • Futures Contracts: Some Preliminaries	Reading Seyidoğlu(2013), Chapter 8. Answer the research questions at the end of the chapter and prepare for class discussion.
9)	• Terminology related to options • Currency option markets • Quotation and prices of currency options • Risk and return in option transactions • Value and pricing of the option	Reading of Seyidoğlu(2013), Chapter 9. Answer the research questions at the end of the chapter and preparing for class discussion. Prepare for the quiz.
10)	• Interest rate risk • Managing interest rate risk • Quiz	Reading of Seyidoğlu(2013), Chapter 10. Answer the research questions at the end of the chapter and preparing for class discussion.
11)	• Types of currency exposure • Hedging strategy with forward market • Money market hedge strategy • Hedging strategy with options markets	Reading Seyidoğlu(2013), Chapter 11. Answer the research questions at the end of the chapter and preparE for class discussion.
12)	• Risk sharing agreements • Determining the costs of using different hedging techniques • Defining the operational effect and understanding its difference from the transaction effect • Calculation of transaction effect in certain exchange rate change and cost, income scenarios • Determination of appropriate marketing, production and financing strategies to combat the economic consequences of exchange rate changes. • Impacts of exchange rate risk	Reading Seyidoğlu(2013), Chapter 11 Answer the research questions at the end of the chapter and prepare for class discussion.
13)	• Identification of the accounting impact • Define the four basic conversion methods • Calculation of accounting impact with different methods • Understanding the management of accounting impact • Conversion methods • Transformation effect and economic reality • Development of accounting hedge strategy	Reading of Seyidoğlu(2013), Chapter 3. Answer the research questions at the end of the chapter and prepare for class discussion.
14)	• Definition of balance of payments • Structure of the balance of payments • Basic account groups of the balance of payments • Balancing of balance of payments balance	Prepare for the final exam
15)	Final Exam	None

Sources

Course Notes / Textbooks:	International Finance Cheol S. Eun, Bruce G. Resnick McGrawHill, 7th edition, 2014 ISBN-13: 978-0-07-716161-3
References:	Uluslararası Finans Prof. Dr. Halil Seyidoğlu Güzem Can Yayınları, 5. Baskı, 2013. ISBN: 9757516112

Course-Program Learning Outcome Relationship

Learning Outcomes	1	2	3	4	5
Program Outcomes
1) Explain the essential body of knowledge in the area of banking and insurance, including evolution of the discipline, the state-of-the-art concepts, scientific methodology, theories and models.
1) -explain the essential body of knowledge in the area of banking and insurance, including evolution of the discipline, the state-of-the-art concepts, scientific methodology, theories and models.
2)  employ the appropriate tools and analytical techniques to collect and analyze quantitative and qualitative data in the related areas, interpret results and propose solutions.
2) Employ the appropriate tools and analytical techniques to collect and analyze quantitative and qualitative data in the related areas, interpret results and propose solutions.
3)  recognize and assess legal environment in banking and insurance industries
3) Recognize and assess legal environment in banking and insurance industries.
4) Explain ongoing operational and managerial methods in banking and insurance industries.
4)  explain ongoing operational and managerial methods in banking and insurance industries.
5) Discover and create entrepreneurial opportunities and expertise to successfully establish and develop their own ventures.
5)  discover and create entrepreneurial opportunities and expertise to successfully establish and develop their own ventures.
6)  develop the capacity to assess current global economic issues.
6) Develop the capacity to assess current global economic issues.
7)  express he role of international capital markets in the global economy; accordingly define the concept of risk in terms of measurement and management.
7) Translate and explain the content of the documents written in English related to the field .
8)  translate and explain the content of the documents written in English related to the field .
8) Express he role of international capital markets in the global economy; accordingly define the concept of risk in terms of measurement and management.
9) Identify standards of personal, professional, social and business ethics, evaluate the ethical implications of various practices in the related areas, and be aware the importance of ethical behavior in adding value to the society.
9)  identify standards of personal, professional, social and business ethics, evaluate the ethical implications of various practices in the related areas, and be aware the importance of ethical behavior in adding value to the society.

Course - Learning Outcome Relationship

No Effect	1 Lowest	2 Low	3 Average	4 High	5 Highest

	Program Outcomes	Level of Contribution
1)	Explain the essential body of knowledge in the area of banking and insurance, including evolution of the discipline, the state-of-the-art concepts, scientific methodology, theories and models.	5
1)	-explain the essential body of knowledge in the area of banking and insurance, including evolution of the discipline, the state-of-the-art concepts, scientific methodology, theories and models.	5
2)	 employ the appropriate tools and analytical techniques to collect and analyze quantitative and qualitative data in the related areas, interpret results and propose solutions.
2)	Employ the appropriate tools and analytical techniques to collect and analyze quantitative and qualitative data in the related areas, interpret results and propose solutions.	5
3)	 recognize and assess legal environment in banking and insurance industries
3)	Recognize and assess legal environment in banking and insurance industries.	4
4)	Explain ongoing operational and managerial methods in banking and insurance industries.	4
4)	 explain ongoing operational and managerial methods in banking and insurance industries.
5)	Discover and create entrepreneurial opportunities and expertise to successfully establish and develop their own ventures.
5)	 discover and create entrepreneurial opportunities and expertise to successfully establish and develop their own ventures.
6)	 develop the capacity to assess current global economic issues.	4
6)	Develop the capacity to assess current global economic issues.	4
7)	 express he role of international capital markets in the global economy; accordingly define the concept of risk in terms of measurement and management.
7)	Translate and explain the content of the documents written in English related to the field .
8)	 translate and explain the content of the documents written in English related to the field .
8)	Express he role of international capital markets in the global economy; accordingly define the concept of risk in terms of measurement and management.	4
9)	Identify standards of personal, professional, social and business ethics, evaluate the ethical implications of various practices in the related areas, and be aware the importance of ethical behavior in adding value to the society.
9)	 identify standards of personal, professional, social and business ethics, evaluate the ethical implications of various practices in the related areas, and be aware the importance of ethical behavior in adding value to the society.

Learning Activity and Teaching Methods

Individual study and homework
Lesson
Homework
Project preparation

Assessment & Grading Methods and Criteria

Written Exam (Open-ended questions, multiple choice, true-false, matching, fill in the blanks, sequencing)
Oral Examination
Homework
Individual Project
Group project

Assessment & Grading

Semester Requirements	Number of Activities	Level of Contribution
Quizzes	3	% 20
Midterms	1	% 35
Final	1	% 45
total		% 100
PERCENTAGE OF SEMESTER WORK		% 55
PERCENTAGE OF FINAL WORK		% 45
total		% 100

Workload and ECTS Credit Grading

Activities	Number of Activities	Workload
Course Hours	16	48
Study Hours Out of Class	16	64
Project	3	15
Homework Assignments	4	8
Quizzes	2	1
Midterms	1	15
Final	1	22
Total Workload		173