International Financial Management syllabus

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Course Contents

Unit 1

International Financial Environment: ‘Globalization’, goals of International Financial Management.

Unit 2

Balance of Payments: concepts and principles of balance of payments and its various components. The Current Account Deficit and Surplus and Capital Account Convertibility.

Unit 3

Foreign Exchange Market: origin of the concept of foreign exchange, the difference between fixed and floating rates. Foreign exchange transactions and the derivatives instruments traded in foreign exchange market such as forwards, futures, swaps, and options.

Unit 4

Currency Derivatives: forward markets and the different concepts, currency futures markets and currency options markets and functions.

Unit 5

Exchange Rate Determination: Exchange rate movements, factors that influence exchange rates, movements in cross exchange rates, concepts of international arbitrage, interest rate parity, and purchasing power parity and the International Fisher effect.

Unit 6

International Financial Markets: basic concepts of the international money market. International credit markets (loans in various forms) from the creditors/investors.

Unit 7

Foreign Trade Finance: concept of foreign trade finance. concepts of financing exports and financing imports and documentary collections, factoring, forfeiting and countertrade

Unit 8

Nature and Measurement of Foreign Exchange Exposure: nature and measurement of foreign exchange exposure. Types of exposures and the various types of translation methods.

Unit 9

Management of Foreign Exchange Exposure: concept of exposure forward and foreign exchange exposure, various tools and techniques of foreign risk management and the risk management products.

Unit 10

International Capital Structure: international capital structure, cost of capital, the capital structure of MNCs, cost of capital in segmented versus integrated markets.

Unit 11

International Capital Budgeting: Introduction of international capital budgeting, adjusted present value model, capital budgeting from parent firm’s perspective and expecting the future expected exchange rate analysis

Unit 12

Country Risk Analysis: country risk factors, assessment of risk factors. Techniques through which the country risks can be assessed as well as measured.

Unit 13

International Taxation: international tax system, principles of taxation, double taxation, tax havens and transfer pricing. International tax management strategy and Indian tax environment.

Unit 14

Foreign Direct Investment, International Portfolio and Cross- Border Acquisitions: flow, cost and benefits of Foreign Direct Investment. ADR and GDR, concept of portfolio, cases on cross border acquisitions.

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