STONY BROOK UNIVERSITY

College of Business
Course: BUS 331, International Finance
Prerequisite: BUS 330
Semester: Spring 2023 – HVY ENGR LAB 201, T/R: 11:30 AM – 12: 50 PM
Instructor: Dr. Matthew Wynter
Email: [email protected]

Office hours: Tuesday 3:00 pm – 4:00 pm via Zoom (subject to change), or by Zoom appointment
Link: https://stonybrook.zoom.us/j/99618530639?pwd=Y0NhSXg3MUtETHFHUllyMHZBTmVRdz09
Course homepage: Blackboard, http://blackboard.sunysb.edu If you are having trouble logging into
Blackboard, you will need to log into SOLAR to verify your NETID username and set your NETID Security
Question and Password. For more information, visit: http://clientsupport.stonybrook.edu

1 Course Description
This course introduces students to international finance. The goal is to provide a base framework to
understand corporate financial and investment portfolio decisions in an international context. The course
is divided into three sections: 1) the international financial system, 2) international corporate finance, and
3) international investment.

1.1 Course Overview

This course introduces students to the international financial decisions made by firms and investors. In
the first part of the course, we review the tools for valuations and then introduce the international capital
market. These valuation tools assume a frictionless environment – meaning no information asymmetries,
market segmentation, bankruptcy costs, political risk, conflicts of interest, and so forth. However, in the
international setting, these and other frictions can affect firm value and portfolio choice. We will cover
how the financial decisions affect firms (Part 2: International Corporate Finance) and investors (Part 3:
International Investment).

We will use cases from the financial press to apply financial concepts to the real world. These concepts
can include: valuing an investment (Part 1: Review of Financial Valuations), the current and capital account
(Part 1: International Financial System), devaluation of foreign currencies (Part 1: International Financial
System), corporate governance (Part 2: International Corporate Finance), hedging foreign exchange and
commodity risk (Part 2: International Corporate Finance), expanding into a new market (Part 2:
International Corporate Finance), estimating the cost of capital (Part 3: International Investment), market
segmentation (Part 3: International Investment), and constructing an international portfolio (Part 3:
International Investment).

1.2 Course Format

The course will include video lecture sessions, weekly problem sets that will be submitted via Blackboard,
assignments that will require Excel and accessing current financial data, a Harvard Business School case
study, and a midterm and final. The video lectures contain the course concepts, articles from the financial
press, and applied practice problems. Students are expected to view the lecture material, actively
workout the problems, and then use email or Zoom office hours to address questions. Active
participation is a course expectation.

2 Course Materials
1. Required Case Study: Harvard Business School, Global Equity Markets: The Case of Royal Dutch

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 and Shell. This case will be required for the course. You can purchase the case using the link below.
Upon following the link, you will have to register on the site in order to purchase the case. ($4.25)
https://hbsp.harvard.edu/import/1024683
2. Recommended Textbook: Eun, Cheol S., and Resnick, Bruce G., International Financial
Management, 9th ed, 2021. (I will make reference to specific chapters from the 9th edition that
will be helpful supplements to my lecture notes.) This book can be accessed by purchasing an
online account with McGrawHill (https://connect.mheducation.com/class/bus331spring) or via
online retailers such as Amazon. You do not need a hard copy version of the book. The
international or previous versions of the book will be just as good, with the caveat that chapter
numbers from the alternate versions might not necessarily correspond with the chapters in the
syllabus.
3. Lecture Slides: to be posted on the course homepage
4. Assignments: Problem Sets, Group assignments, Case Study, Practice test – all to be posted on
the course page
5. Optional Materials: The following materials are entirely optional. You might consider some of
these materials if you are interested in corporate finance beyond the scope of this course.
 Financial press: Bloomberg, The Economist, and The Wall Street Journal (Although these are not
required readings, articles from these publications may be mentioned in the context of the
lectures throughout the semester.)
 Podcasts: The Indicator (~10 mins), Planet Money, and Business Wars Daily provide coverage of
financial and economic news that is easy to understand.

3 Communicating with me
It is very important that you either email me or use Zoom office hours if you are having difficulty with
the topics that we have discussed in the lectures or the assignments. Our shared goal is that you learn
international finance. To that end, one of the challenges in learning is feeling connected to the instructor
and your peers.
1. Email me. If it is a short procedural question that can be answered via email, I will try to do so
quickly. If it is a longer question that requires a more extensive discussion, I will either ask you to
use my office hours, set up a Zoom call, or I will post the answer on Blackboard (if appropriate).
2. Zoom office hours and Zoom appointment. Please use the Zoom office hours to ask questions
that you may have a hard time addressing via email.
3. Due to other personal and professional commitments, there will be days on which my response
will be delayed. So if there is an urgent matter that needs to be addressed during those times,
let’s have a conversation ahead of these periods so that your needs can be addressed in an
expedient manner. Those days (to the extent known now) are:
a. Friday evening and Saturdays. I will respond to any inquires made on Friday evenings
or Saturdays on Sunday or Monday morning, or if not possible, during the regular
workweek.
b. During the semester, I may attend occasional academic or professional conferences. On
those days, my response might also be delayed. I will do my best to inform you of those
days ahead of time when they arise.

4 Student Learning Outcomes

College of Business Program Learning Outcomes
 Analyze ethical dilemmas from multiple ethical and stakeholder perspectives

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  Utilize quantitative or qualitative research methodologies to interpret statistical data, financial
statements, or spreadsheets.
 Communication skills, critical thinking, leadership and team interaction, business knowledge and
analytical decision making.

Course Specific Learning Outcomes

The course will enable students to:
 Learn how to analyze financial information
 Gain problem solving skills within corporate finance
 Apply tools to make decisions related to financial analysis

5 Course Evaluation
5.1 Assignments
 Study groups: I will randomly assign you into study groups of 6 after the drop add deadline. The
groups will be mandatory and required for the problem sets and case study.

 Homework: These are meant to let your practice the material. These are to be completed
individually, submitted weekly via Blackboard by Friday at 5 pm, and will count directly toward
your grade. Your lowest homework score will be dropped.

 Problem Sets: These are meant to test your understanding of the concepts and will help you
prepare for exams. Each set will be worked on in your pre-assigned study group, and you will
submit one copy per group via Blackboard on the following Friday by 5 pm. The problems will
require excel and in some cases will require you to obtain real-world financial data.
The sets will generally cover two or three modules. Each assignment will be due in a week after
the particular set of topics are complete.

1. Brexit, Capital Account, Current Account

2. Corporate Governance, Financial Options
3. Real Options, Mergers, International Factor Models
Comments:
- Late assignment will not be accepted, but your lowest problem set score and empirical
assignment score will both be dropped.
- It is very important that all members of a team contribute to all parts of assignments. When
submitting your group assignments, only include the names of the people that worked on
the assignment. For example, if a member of your group does not work on the assignment,
then their name would not be included in the final copy that is submitted and graded.
- Depending on how we progress through the topics in the course, the problem sets may be
adjusted.

 Case Study: We will cover one Harvard Business School case study. Your pre-assigned study group
of up to six students is required to submit a case report, an executive memo of your findings,
and provide an in-class presentation of your findings. Each group should submit only one copy
of the case report. The case study is worth 10 percent of your final grade. You must complete the
report and executive memo to receive credit. The tentative course outline provides details about
the schedule of the case.

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  Each group will provide a ten minute in-class presentation of your findings. The presentation will
have a maximum of ten slides. The case study presentation is worth an additional 5 percent of
your final grade.
 You must complete the report and presentation to receive credit for both.

Comments:
- Your group will need to schedule a case study check in with me via Zoom after the midterm
and during the week of April 4 – 8, (4/4 – 4/8)
- The check in is worth 5 points of your final grade.

5.2 Exams
There will be a midterm and a final in this course. Both exams will be open book, with a formula sheet
provided. You will have three hours to take the exam. The exams will be administered through
Blackboard. Absences from the exam will only be excused for the most serious of (documented) reasons.
Please see the section on Policies for more details.

The tentative date of the midterm and final are in the section labeled Schedule and Outline.

5.3 Class participation

In online learning environments sometimes it can be challenging to feel like your participation is noticed
and matters. Your resolve to learn and willingness to work together are important and valued. So,
everyone starts with a full participation score. I will not referee individual disputes within a group, as
disagreements are bound to happen. However, if a group member is not responsive or unprofessional, I
reserve the right to reduce their participation score.

5.4 Extra Credit

We will have guest speakers from industry and the career center. Attendance for the speakers is not
mandatory and presents an opportunity for extra credit. To receive credit, you will need to sign up in
advance and attend the Zoom meeting. For each guest lecture, you will receive +0.5 points added to
your final grade, with a max of 3 points in total.

5.5 Calculating your Average

Homework 10%
Case Presentation 5%
Case Study Check-in 5%
Case Study 10%
Participation 5%
Problems Sets 15%
Midterm Exam 25%
Final Exam 25%

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5.6 Course Grading Information:

A 94 – 100
A- 90 – 93
B+ 87 – 89
B 83 – 86
B- 80 – 82
C+ 77 – 79
C 73 – 76
C- 70 – 72
D+ 69 – 66
D 60 – 65
F 0 – 60

6 Policies

Fairness:
I will make every effort to treat students with dignity and fairness and to be sensitive to the diversity that
exists within the student body. I fully expect everyone to act professionally towards everyone involved in
this class. My goal is to work with all of you to make you successful and I will do my utmost to be as helpful
to you as possible. Please be aware that I will not tolerate disrespect towards me or your classmates. If
you have any concerns about the class, please directly communicate these concerns to me, and I will work
with you on resolving them.

Absences from Exams:

Absences from exams will only be excused with written documentation from an appropriately accredited
professional (i.e. a medical doctor).

Student Accessibility Support Services (SASC):

If you have a physical, psychological, medical, or learning disability that may impact your course work,
please contact the Student Accessibility Support Center, Stony Brook Union Suite 107, (631) 632-6748, or
at [email protected]. They will determine with you what accommodations are necessary and
appropriate. All information and documentation is confidential.

Students who require assistance during emergency evacuation are encouraged to discuss their needs with
their professors and the Student Accessibility Support Center. For procedures and information go to the
following website: https://ehs.stonybrook.edu/programs/fire-safety/emergency-evacuation/evacuation-
guide-people-physical-disabilities and search Fire Safety and Evacuation and Disabilities.

Academic Integrity:
Each student must pursue his or her academic goals honestly and be personally accountable for all
submitted work. Representing another person's work as your own is always wrong. Faculty is required to
report any suspected instances of academic dishonesty to the Academic Judiciary. Faculty in the Health
Sciences Center (School of Health Technology & Management, Nursing, Social Welfare, Dental Medicine)
and School of Medicine are required to follow their school-specific procedures. For more comprehensive

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information on academic integrity, including categories of academic dishonesty please refer to the
academic judiciary website at http://www.stonybrook.edu/commcms/academic_integrity/index.html

Critical Incident Management:

Stony Brook University expects students to respect the rights, privileges, and property of other people.
Faculty are required to report to the Office of Student Conduct and Community Standards any disruptive
behavior that interrupts their ability to teach, compromises the safety of the learning environment, or
inhibits students' ability to learn. Faculty in the HSC Schools and the School of Medicine are required to
follow their school-specific procedures. Further information about most academic matters can be found
in the Undergraduate Bulletin, the Undergraduate Class Schedule, and the Faculty-Employee Handbook.

7 Schedule and Outline

The following schedule is tentative and subject to change based on how the class progresses.

Week Topic Reading Assignment Due Dates

1 Course Intro, Review of Time Value of Ch. 1 Jan 27
Money and Core Concepts
2 Balance of Payments, Brexit Ch. 3 Feb 3
3 The International Monetary System, Ch. 2 Feb 10
FOREX, EURO, Currency Crisis Periods
4 Corporate Governance, Agency Problem Ch. 4 Feb 17 Assignment #1
Due
5 Foreign Exchange and Derivatives Part 1 Ch. 6,7 Feb 24
(Arbitrage, Forwards, Futures)
6 Foreign Exchange and Derivatives Part 2 March 3 Assignment
(Options, Option Strategies) #2 Due
7 Midterm Review (Forex, Balance of
Payments, Corporate Governance,
Options)
Midterm Exam March 10
8 Spring Break – March 13 - 19 17 No assignment
9 Real Options – Foreign Direct Investment Ch. 16, 18 March 24
10 International CAPM, Cost of Capital, Ch. 17 March 31
market segmentation, Home Bias
11 International Portfolio Choice Part 1 (One Ch. 15, April 7 Case Study
Risky Asset, Multiple Risky Assets, CAPM) Check-in
12 International Portfolio Choice Part 2 April 14
(Testing the CAPM, Applying Multi Factor
Models, Performance Evaluation)
13 Final Exam Review 21 Assignment #3 Due
14 Case Study and Presentation Turn in 28 Case Study Due
15 Final Exam May 5