MS&E247s General Information

Course Objective
MS&E 247s (formerly EESOR 243) International Investments examines important issues in the rapidly evolving area of international financial markets.

The course focuses on various aspects of international portfolio management. It is a natural extension to the theories and practical issues explored in Investments and/or Finance.

Topics

• Review of financial market instruments
• International asset pricing models
• International arbitrage & parity conditions
• International portfolios & the hedging of currency risk
• International performance analysis
• Integrated versus segmented market
• Institutional arrangements, taxation, & regulation
• International financial engineering models
• Valuation of target firms for cross-border acquisitions
• Real options approach to international mergers

Intended Audience
The course is aimed at students wishing to acquire a sound understanding of the main opportunities in international investments. Advanced undergraduates, graduate students and practitioners in Engineering, Economics, Business, Finance, or other related disciplines are all welcomed.

Co-requisites
Basic finance theory or consent from the instructor.

Main Texts

• Richard M. Levich, International Financial Markets: Prices and Policies, 2nd Ed., McGraw-Hill/Irwin, 2001, ISBN: 0-07-233865-2.
• Salih N. Neftci, Principles of Financial Engineering, Academic Press, 2004, ISBN: 0-12-515394-5.

Optional Textbooks

• David G. Luenberger, Investment Science, Oxford University Press, 1997, ISBN: 0-19-510809-4.
• John C. Hull, Options, Futures and other Derivatives, 6th Ed., Prentice-Hall, 2006, ISBN: 0-13-149908-4.

Reference Books (available at the reserve desk at the Terman library)

• Bruno H. Solnik, International Investments, 5th Ed., Addison-Wesley, 2004, ISBN: 0-321-22389-6.
• Robert McDonald, Derivatives Markets, 2nd Ed., Addison-Wesley, 2006, ISBN: 0-321-28030-X.
• Olivier J. Blanchard, Macroeconomics, 4th Ed., Prentice Hall, 2006, ISBN: 0-13-146225-3.
• Gregory Mankiw, Macroeconomics, 5th Ed., Worth, 2002, ISBN: 0716752379.
• Richard A. Brealey and Stewart C. Myers, Principles of Corporate Finance, 8th Ed., McGraw-Hill/Irwin, 2006, ISBN: 0-07-313082-6.
• Jeffrey M. Wooldridge, Introductory Econometrics: A Modern Approach, 3rd Ed., South-Western College, 2006, ISBN: 0-324-28978-2.
• Jeff Madura, International Financial Management, 8th Ed., South-Western College, 2006, ISBN: 0-324-28841-7.
• Paul R. Krugman and Maurice Obstfeld, International Economics: Theory and Policy, 6th Ed., Addison Wesley, 2003, ISBN: 0-201-77037-7.

Grading

• 30% Problem Sets
• 30% Mid-Term
• 40% Final Exam

About the Instructor
Yee-Tien (Ted) Fu
BS (IE) '84 CYCU; MS (IEOR) '89 Virginia Tech; MS (Statistics) '91 Stanford; Ph.D. (EESOR) '96 Stanford. National Cheng-Chi '97-present; Stanford '98-present.

Dr. Fu studied Statistics and Engineering-Economic Systems and Operations Research at Stanford. He is currently an Associate Professor with the College of Commerce, National Cheng-Chi University (Cheng Da) in Taiwan. He teaches finance & investment, simulation & information science and quantitative methods courses at undergraduate and graduate levels. In the summer of 1997, he was a faculty leader for the Stanford American Language and Culture Program, which aims to foster greater cross-cultural understanding between students from Taiwan and the United States. His interest in Investment Science and International Investments was inspired by the courses he took from Professors in EES, OR, STAT, IE, GSB and ECON at Stanford. Since 1998, he has taught International Investments at Stanford every year. Students found the course useful and relevant, as well as fun and enjoyable.

Dr. Fu's research interests reside in the interdisciplinary application of the portable quantitative concepts embraced in management science core courses and their spin-offs. He is currently studying foreign investment strategies (e.g., foreign direct investments between developed and emerging economies), and the interaction between international finance disturbances and current global supply-chain optimizing practices. His research sample is largely drawn from multinational companies in the high-tech manufacturing sector. In addition, he specializes in the entry and harvesting strategies of a variety of industries (e.g., fast food and beverage industries, business district construction industries) that are actively engaged in the emerging markets.

Email:ffuy@Stanford.edu
Email(Second):yeetienfu@yahoo.com
Office Hours: MW 4-5:30 p.m. at Terman 414
Office Tel: (650) 838-9580