Week 

Topic 

Readings  

Assignments/Other Readings

1 
Sept 3

Introduction to foreign exchange markets

Solnik Ch. 1
 

2
Sept 8, 10

Parity Conditions,
Exchange rate determination

Solnik Ch. 2, 3

Extra or alternative reading.
Ch 1, 2, 3 from O' Brien

Notes 3

HW #1 Part A due Thursday, Sept. 10, noon

Data for part 1A, part 1B

3

Sept 15, 17

Exchange Rate Relations and Forecasting

Notes 5

4

Sept 22, 24

Exchange rate forecasting
 

For Wednesday: For discussion--What is the assessment of the outlook for the $?

Guest speaker:

Frank Warnock, Federal Reserve,  Bond Market Development! Thursday 10am, B74

Warnock's slides

hedged vs. unhedged returns

5

Sept 29, Oct 1

For Monday, Solnik Ch. 7 257-274

For Wednesday, Ch.  4

For Thursday, Optional: 
"Global Stock Markets in the Twentieth Century" Goetzmann and Jorion
"European Equity Markets and EMU: Are the Differences Between Countries Slowly Disappearing?", K. GEERT ROUWENHORST, 1999 Financial Analyst Journal
"Another look at the Role of the Industrial Structure of Markets for International Diversification Strategies", John Griffin and  G. Andrew Karolyi, 1998 Journal of Financial Economics 50, 351-373.  
Correlations:
"Long-Term Global Market Correlations", WILLIAM N. GOETZMANN,
LINGFENG LI, K. GEERT ROUWENHORST

Notes 8

8. Welcome to bull country
Valuing markets via the equity premium.(From The Economist print edition) Jul 18th 1998

Evaluate a country analysis: Where to Invest, Converting Economic and currency information into useful information (each assignment is by an individual and not a group)

Data for historical P/E and Returns for some countries

Due Wednesday Oct. 2

6
Oct 6, 8 

Due Monday: Oct. 13

7 
Oct 13, 15

 Value Effects 

For Wed. Read Solnik Ch.  7 (p. 241-273), 8 (299-320)

Optional:

Fama and K. French, “Value and Growth: The International Evidence”, Journal of Finance, December 1998,
"Are the Fama and French Factors Global or Country-Specific?"  The Review of Financial Studies, 2002.

8 
Oct  22

Other International Strategies 

Nice summary of Bubbles:
FED

The first 7 pages of ..“Investor Behavior over the Rise and Fall of Nasdaq” John Griffin, Jeffrey Harris and Selim Topaloglu
Skim: Brunnermeier, Marcus K. and Stefan Nagel, 2002, Arbitrage and its limits: hedge funds and the technology bubble, forthcoming JF.  

No class Monday--SOM study day.

Case: Grantham, Mayo, Van Otterloo (HBS) Questions.

Due: Friday at 5pm., Oct 24

9 
Oct 27, 29

Practical International Investment Issues

For Wednesday. Solnik, Ch. 6 p. 218-223, Ch. 7, 261-273, Ch 8. 321-333.

Case discussion Monday!

10 
Nov 3, 5

Huaneng Power International (Ivey)  due Wed.

Kent Hargis from Bernstein to speak on Wed night. 7pm, A30

11
Nov 10

International Investment Issues

Read: Goldman and Value
focus on valuation sections.

12

Nov 17, 19

International Cost of Capital, Political Risk

Read...
Solnik Ch. 7, 155-172, Ch. 8, 317-321
1. Campbell R. Harvey, "The International Cost of Capital and Risk Calculator,"
2. Kent Hargis, first 7 pages of, The Goldman Model of Equity Cost of Capital.
Optional: Rene Stulz, The globalization of equity markets and the cost of capital.
Griffin, John, "Are the Fama and French Factors Global or Country-Specific?"  The Review of Financial Studies, 2002.

Case: International cost of capital.

Goldman info

13

Dec 1, 3

Currency Risk: Exposure 
Currency Exposure and Hedging Tools

An International big picture view of Global trade and finance

Thursday, Chapter 4, 5 from O'Brien
Optional: "International competition and exchange rate shocks: A cross-country industry analysis" with René M. Stulz, 2001, The Review of Financial Studies 14, p. 215-241.  

Global Trends

Dec 8

Optional: Introduction + Conclusion only:"International Portfolio Flows and Security Markets", in International Capital Flows, edited by Martin Feldstein, University
Chicago Press, 1999, 257-293.
The Myth of Asia's Miracle by Paul Krugman

Optional: Are Daily Cross-border Equity Flows Pushed or Pulled? with Federico Nardari and René M. Stulz 

FINAL DEC 12