GLOBAL FINANCIAL MANAGEMENT VTU MBA 4TH SEM

Syllabus

22MBAFM403: Global Financial Management

Module 1                                                                                                             (6 Hours)

International Financial Environment: An Overview of IFM- Importance, Rewards & Risk of International Finance- Goals of MNC- Balance of Payments (BOP) Fundamentals of BOP-Accounting Components of BOP- Equilibrium & Disequilibrium. International Monetary System: Evolution-Gold Standard- Bretton Woods System- Flexible Exchange Rate Regime- Recent Developments in Exchange Rate Arrangements-Recent Changes and Challenges in IFM- the Economic and Monetary Union (EMU). (Only Theory).

Module 2                                                                                                             (8 Hours)

Foreign Exchange Market: Characteristics, Functions and Structure of Forex Markets-Foreign Exchange Market Participants- Types of Transactions and Settlements Dates-Exchange Rate Quotations[1]Determination of Exchange Rates in Spot Markets- Exchange Rates Determinations in Forward Markets- Exchange Rate Behaviour-Cross Rates, Bid, Ask, Spread. Overview of International Money Markets (Theory & Problems).

Module 3                                                                                                             (8 Hours)

Foreign Exchange Risk Management: Foreign Exchange Risk and its Types(Transaction risk, Translation Risk & Economic risk) - Hedging Against Foreign Exchange Exposure – Forward Market[1]Forward Contract vs Future Contracts- Futures Market- Options Market(Call Option, put Option, American Option, European Option & Asian Option)- Currency Swaps-Interest Rate Swap- Problems on Both Two-Way and Three-Way Swaps. Overview of International Stock Market (Theory & Problems).

Module 4                                                                                                             (6 Hours)

International Financial Markets and Instruments: Foreign Portfolio Investment- International Bond & Equity Market-Global Depositary Receipt (GDR)- American Depository Receipt (ADR)- International Financial Instruments: Foreign Bonds & Eurobonds, Global Bonds. Floating Rate Notes[1]Zero Coupon Bonds- International Money Markets. International Banking Services –Correspondent Bank-Representative Offices- Foreign Branches. Forward Rate Agreements. (Only Theory).

Module 5                                                                                                             (6 Hours)

Forecasting Foreign Exchange Rate: International Parity Relationships- Measuring Exchange Rate Movements-Exchange Rate Equilibrium –Factors Effecting Foreign Exchange Rate- Forecasting Foreign Exchange Rates. Interest Rate Parity (IRP), Purchasing Power Parity Theory (PPP) & International Fisher Effects (IFE) - Comparison of IRP, PPP and IFE. Arbitrage-Types of Arbitrage – Locational, Triangular and Covered Interest Arbitrage. (Theory & Problems).

Module 6                                                                                                             (6 Hours)

Foreign Exchange Exposure: Management of Transaction Exposure, Translation Exposure, Economic exposure, Political Exposure- Management of Interest Rate Exposure. International Capital Budgeting: Concept- Factors Affecting International Capital Budgeting[1]International Budgeting Partnership- Inputs for International Capital Budgeting- Evaluation of a Project for International Capital Budgeting (Theory & Problems).