VISHWA VISHWANI

Institute of Systems & Management

INTERNATIONAL FINANCE
Subject
Course Code
Semester
Credit Hours
Batch
Faculty

: International Finance
:
: PGDM- (Trimester-VI)
: 04
: 2013-15
: Dr.U. Padmavathy

Course Objectives:
Financing issues for firms with business in foreign countries
Balance of Payments defined and Flow of Funds analysis
Exchange Rate theories and analysis
Risk Exposures for a Multinational Firm
Measures for Risk Control across borders
Methods of short term & long term financing for expansion and operations
Cash Management techniques for the MNC
Unit-I Introduction to International Finance: A view of International financeImportant trends in globalization -Various aspects of international finance - Importance
of international finance - Emerging challenges - Balance of payments- its implications
and components. Issues and Dimensions - International Monetary system - Exchange
rate regimes - Fixed Exchange rage - Flexible exchange rate - Hybrid systems of
exchange rates.
Unit-II Theories of Exchange Rates: Interest Rate Parity Theorem - Absolute
Purchasing Power Parity Theorem - Relative Purchasing Power Parity Theorem International Fischer Effect - Foreign Exchange market - The Foreign Exchange market,
participants - Information & Communication Systems - Payment systems, Market Terms
- Cash and spot Exchange markets - Inter-bank markets and mechanics of spot
exchange quotations - Direct Vs Indirect exchange - Cross exchange rates - Forward
market characteristics - forward premiums and discounts
Unit III Foreign Exchange Derivatives Markets: Derivatives - Currency and interest
rate futures and their applications - Currency swaps - Link between futures and forward
markets - Foreign currency and interest rate options - Option pricing models - Difference
between forwards, futures and options - Foreign Exchange Exposures - Transaction
Exposure - Economic Exposure - Translation Exposure - Foreign Exchange Exposure
Management using Derivatives.
Unit IV International Trade Finance: International Payments methods - On Account Letter of Credits - Documentary Credits - International Trade Finance methods Forfeiting - Factoring Pre-shipment & Post-shipment Export Finance - L/C Financing -

VISHWA VISHWANI
Institute of Systems & Management
International Trade Documents - Bill of Lading - Invoice - Packing List - L/C - Drafts
Insurance - Inspection Certificate etc.
Unit V Multinational Capital Budgeting: Concept & Issues in MNC Capital Budgeting
- Techniques of Evaluation of MNC Capital Budgeting - Multinational working capital
Management - Multilateral International Funding Agencies - International Monetary Fund
(IMF) - World Bank (WB) - International Finance Corporation (IFC) etc. Long Term
Sources of Finance in Intl financial Markets: Euro syndicated loans - Euro revolving
Line of credit - Medium term notes Euro bonds GDRs (Global Depositary Receipts)
- ADRs (American Depositary Receipts) - FCCBs (Foreign Currency Convertible
bonds).
Suggested books:

International Finance by P.G. Apte Tata McGraw Hill Publications.

International Financial Management by Jeff Madura - Thomson 1. Aliber, R.Z., (1978),
Exchange Risk and Corporate International Financial, Macmillan, London.
Bhalla, V.K., (2001), International Financial Management, 2nd Ed. Anmol, Delhi.
Luca Cornelius, (1995), Trading in the Global Currency Market, Prentice Hall, NJ.
Sutton, W.H., (1987), Trading in Currency Options, New Institute of Finance, N York.
Bhalla, V K., (1997), Managing International Investment and Finance, Anmol, New Delhi.
Buckley, Adrian, (2002), Multinational Finance, 3rd Ed. Prentice Hall of India, New Delhi.
Eiteman, David K. and Stonehill, Arthur I., (1988), Multinational Business Finance, AddisonWesley, California.
Johnson and Giaccotto, (1995), Options and Futures, St. Paul, West.
Kim, Suk and Kim, Seung, (1993), Global Corporate Finance: Tax and Cases, 2nd Ed, Miami,
Florida.
Shapiro, Alan C., (2002), Multinational Financial Management, Prentice Hall of India, New Delhi.

Websites:
www.Quickmba.com
http://www.riskglossary.com/
http://management.about.com/
http://highered.mcgraw-hill.com
www.investopedia.com
Journals:

FORTUNE.
Fortune India.
The Economist.
Capital Market.
Dalal Street.
Money Today.
Business Outlook.
The Management Accountant.
Chartered Financial Analyst
Journal of Financial Management