International Investment Syllabus

Syllabus

BUFN 770:  International Investment and

BUFN 771:  International Corporate and Project Finance

R.H. Smith School of Business

University of Maryland, College Park

Professor Steven Heston

4447 Van Munching Hall

Office hours widely available (call for appointment)

301-405-9686 (office)

240-305-7260 (cell)

sheston@rhsmith.umd.edu

Teaching Assistants:  Bo Hu, bohu25@rhsmith.umd.edu.  (Do not confuse him with any other “Bo Hu’s”!)

Fall 2017

BUFN 770 Term A Section 0501 meets TTh 10:00-11:50 a.m. in VMH 1335.

BUFN 771 Term B Section 0501 meets MW 4:00-5:50 p.m. in VMH 1511.

Introduction

BUFN 770 and BUFN 771 form a two-course sequence.  I don’t think “International Finance” is really a discipline or even a topic per se, but merely a setting to illustrate uses of financial models.  Theoretically the problems of international finance resemble the problems of domestic finance.  But in practice international finance inevitably involves confusing details and institutions.  This course applies standard financial theory and tools to international problems.  Applications include financial instruments (currency forwards, futures, swaps, and options), markets, hedging, international diversification, and risk management.  

Prerequisites

        This course assumes a solid understanding of investment theory and corporate finance, including capital budgeting (Net Present Value), the Capital Asset Pricing Model (CAPM) and Modigliani-Miller theory (MM Propositions I and II with and without taxes).  BUFN 770 International Investments is a prerequisite for BUFN 771 International Corporate Finance because it has essential material.  You can’t understand corporate cost of capital if you don’t understand interest rate parity!

Texts

        A suggested textbook is International Financial Management, any edition, by Geert Bekaert and Robert Hodrick, published by Pearson Prentice Hall.  This book is not required for students who already have access to textbooks that cover capital budgeting, the CAPM, Modigliani-Miller theory, and options.  We will also use additional (copyright) notes and cases in a course packet online.  See the relevant announcement on the course website on the Canvas system at http://myelms.umd.edu/.

Grading and Assignments