Course

Unit 1

International Business and its modes – Nature of International Financial Functions – Scope of International Financial Management – IFM and Domestic Financial Management – Fast strides in International Financial Functions.
International flow of funds – Structure of Balance of Payments – Equilibrium, Disequilibrium and Adjustment – Approaches to Adjustment – Capital Account Convertibility.

Unit 2

Developments in International Monetary System – Specie Commodity Standard – Gold Standard – Bretton Woods System of Exchange Rates – Exchange rate regime since 1973 – International Liquidity.
Exchange Rate Mechanism – Exchange rate quotations – Nominal, Real and Effective exchange rates – Determination of exchange rate in the spot market – Factors influencing exchange rate –Theories of exchange rate behaviour.

Unit 3

Foreign Exchange Market – distinctive features –major participants – spot market–forward market –market for currency futures – market for currency options.
Forecasting Exchange Rates – Need for forecasts – Techniques of forecasting – Concept, Nature and measurement of Foreign Exchange Exposure – Management of Foreign Exchange Exposure.

Unit 4

International Investment Decision: FDI – Theories of FDI – Costs and Benefits of FDI –Strategy for FDI – Evaluation and Management of Political Risk – International Portfolio Investment – Modes – Problems – Concept of Optimal Portfolio.

Unit 5

International Financial Market – Channels for flow of funds – selection of sources and forms of fund. International Banking – process of internationalization – Financial Intermediation Function – Direction and purposes of lending – Lending Risk – Intermediation in the Foreign Exchange Market.
International Financial Instruments: International equities – International Bonds – ADR, GDR and Gold Bullion market instruments – Financial Swaps.

Course Objective:
To provide a detailed outlook on the concepts of international financial management.

Course Outcomes:

Textbooks:

1. Vyuptakesh Sharan – International Financial Management – PHI
2. Francis Cherunilam – International Business – PHI

Reference Books:

1. Madhu Vij – International Financial Management – Excel Books
2. P.G. Apte – International Financial Management – McGraw Hill
3. Seth – International Financial Management – Galgotia