Frequently Asked Questions (FAQ FINA 7360)

General questions about class: Q1 Q2 Q3 Q4 - Exams: Q5 - Second Midterm: Q6 - Paper: Q7
Presentation: Q8 - Class Participation: Q9 - Homework: Q10 - Rauli's Teaching philosophy: Q11 Q12
Rauli's background: Q13 Q14 Q15

1.- What should I expect from this class?
  • A solid applied investments class.
  • The international framework provides two additional risks, namely, currency and country risk. We will study them and analyze their implications.
  • A complete tour of the major financial markets in the world: currency, equity, bond, swaps, and gold. Also you will be exposed to the main instruments used to hedge risk in those markets.
  • How to use and price the derivative instruments used in international financial markets.
  • Be able to apply what you learn in class to "real-world" cases.

    2.- What do you expect from us (students)?
  • I expect students to follow the lectures. In order to do so, it is highly recommended to read the appropriate material in advance.
  • I expect students to be familiar with the concepts discussed on the the Review Chapter.
  • I expect students to be able to do a regression and undertand the regression's output.
  • This is not an easy class. As mentioned in the comments collected from previous class evaluations, the class is very quantitative. I expect you to be able to replicate all the exercises and examples in the Lecture Notes.
  • I expect students to ask questions and participate in class.

    3.- I have never taken a finance class before. Can I take your class?
    It is highly recommended that you take FINA 6335 before this class. Joe Louis, who took my class in Spring 97, has said that this class should be considered a capstone class. This class, however, has no explicit pre-requisites. Therefore, if you have never taken a finance class before and if you want to get a decent grade, you should expect to work harder than the students with a finance background. The LN and textbook are self-contained, almost everything you need in this class is either in your LN or recommended textbook. By the way, as stated in the syllabus, I'll assume that you know the material covered by the Review Chapter.

    4.- I see in your syllabus, a review chapter. Are we going to see CAPM again?
    Yes and No. We will cover several basic topics, but reviews will be brief and, according to previous students, fast. Chapter RC in the LN, for example, is included in this course mainly for students with no or little background in finance and statistics.
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    5.- What can you tell us about the exams?
    Exams are open book and, therefore, all questions are problems. I do not pull any surprises during exams. That is, the best way to prepare for the exam is to go over old exams, examples and exercises on the LN.

    No, there are no solutions to the exercises on the LN. It is not pedagogically correct to provide them. In my homepage, however, there are solutions to sample exams questions

    Yes, you can fax me or e-mail me your solutions to the exercises and I'll take a look at them.
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    6.- Is the second midterm comprehensive?
    No. The second exam does not cover the material covered for the first exam.

    Yes, you're responsible for everything we covered in class and everything in your LN.
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    7.- What is this "paper: country report" all about?
    The Country Report is an individual project. The objective of the Country Report is to get you exposed to a different stock market than the one in your home country. Students will select a national stock market, research the economic and political situation, collect data, and then pick a couple of stocks. From previous classes, it takes 20 hours of work to complete it. The Country Report should be brief, concise. It should be no longer than five pages. Students should think that the target reader is a busy investor. By the way, your grade will be based on how well your recommendation performs at the end of the semester... just kidding.

    In Appendix B of your LN there are guidelines on how to prepare a country report -which are also in this homepage. In addition, in Chapter VIII of the LN there is an example of a professionally written country report by Smith Barney.

    In general, students find it very useful. On the evaluations, it is consistently mentioned as one of the things that went well in the class.
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    8.- Can you explain what is the presentation?
    You will be part of a group of no more than four students. You will present, discuss and solve a case in class. The presentation of the case should not last for more than 40 minutes. I will evaluate the presentation of the group in three areas: solution of the case, compactness and ability to answer questions. I will ask questions during your presentation.

    All cases are in Appendix A of your LN, which you can download from this homepage.

    If this is your first presentation ever in front of a class and you want to read my presentation tips for undergraduates, press here. Very important: if you use transparencies use large fonts (16 or larger).
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    9.- What do you mean by class participation?
    I believe that student participation in class is extremely important. Unfortunately, students tend to be passive in class. Making class participation part of the grade is one way to provide an incentive to students to bring questions, problems, ideas into class. Every time that you make a relevant question or comment in class, you will be given credit toward your class participation grade.

    Any questions or comments made during a presentation that -I judge- show understanding of a topic will also be taken into account for your class participation grade.
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    10.- Are the homework assignments useful?
    There are two kind of assignments: Suggested problems, related to the lecture notes; and Case assignments, related to the cases. The Case assignments are part of your grade.

    At the end of each part of the class, I will suggest exercises for you to practice. These suggested exercises help students to understand the material and prepare for the exams. I will go over the solution of the suggested exercises in class. But, you will learn more if you do the exercises before I present the solutions.

    Case assignments are aimed towards forcing students to read and think about the case before each presentation. Students will have to read the case and answer the questions in the case under the header Class Assignment. You will turn in the Case Assignments, in class, before each presentation.

    Case assignments are part of your grade. They are to be taken seriously and an honest effort to solve them is expected. Incomplete solutions, lack of effort in the solution, or solutions done during the presentation will result in no credit toward your "homework" grade. No late homework is accepted.

    Important grading fact: If you get zero points in four or more case assignments your final homework grade will be zero.

    Yes, you can fax me your homework if you cannot make it to class.
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    11.- What's your teaching philosophy?
    I believe that my job is to cover as much material as possible. A couple of years down the road, you will not remember many specific things about the topics covered in your classes. You, however, will (vaguely, perhaps) remember that a topic was covered in a class. And then, you should be able to go back to your notes.

    I know that my teaching philosophy might bring short-term unhappiness to many students. But the more we cover now, the better off you will be later.

    12.- I work full-time, I am taking 20 hours and I have a spouse and three kids. I don't have a lot of time to study for your class. What can you do to help me?
    I admire students with full-time jobs, families and a strong commitment to their education. Being a full-time student, however, is your decision, not mine. A colleague once told me: "When the students graduate in their diploma does not say 'MBA-but worked full time/had problems' or 'MBA-but didn't work full-time/have problems.' We should not treat students differently." I firmly adhere to this concept. I will gladly help you if something unexpected in your life happens -for example, an unexpected trip related to your job, an illness, etc.
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    13.- Can you tell us something about your background?
    I received a Ph.D. in Economics from the University of California, San Diego. I have been a member of the College of Business Administration at UH since 1993. In the U.S., I have previously taught at UCSD, University of Virginia, and University of South Florida.

    My research interests are: volatility and financial integration in international equity markets and derivative instruments.

    14.- Have you really used what you're teaching us?
    Yes and No. During the last three years, I have been a consultant for several Argentinean financial firms. Two of the cases presented in the LN come from my consulting experience.

    15.- But, tell me the truth, have you ever made money investing?
    Now, you tell me: why do you think I'm here?
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