INTERNATIONAL FINANCIAL MANAGEMENT

Paper Code: 
MIB 325
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

Course Outcomes

Learning and teaching strategies

Assessment Strategies

 
 

On completion of this course, the students will be able to:

CO 1. Explain various exchange rate regimes & Balance of Payments

CO 2. Analyze the strategies to hedge foreign exchange risk using derivative contracts

CO 3. Understand the factors influencing the financing decisions in international business.

CO 4. Understand the factors influencing the investment decisions in international business.

CO 5. Explain working capital management in international business

CO 6. To extract the cost of factors for foreign investment.

Approach in teaching:

Interactive Lectures using whiteboards, Discussion, Tutorials, Reading assignments, Demonstration, Team teaching, Short Quiz consisting of numerical problems

 

Learning activities for the students:

Self learning assignments, Effective questions, Solving problems of unsolved questions, Problem based learning-cases, Group learning teamwork,

Class test, Semester end examinations, Quiz, Solving problems in tutorials, Assignments, Presentation, Individual and group projects, Task based exercise to assess student’s understanding

  
 

 

12.00
 

Multinational Financial Management- Meaning, Objective, Functions, Relationship with domestic financial management

International Monetary System: Alternative Exchange Rate Systems, A brief history of International Monetary Systems

International Flow of Funds: BoP of India, Domestic Savings, Investments and Capital account, Link between Capital and Current account, Coping with the current account deficit. 

12.00

Derivative Contracts:  Forward Contracts, Currency Futures – Contract Specifications, Advantages & disadvantages of futures contract,  Currency Options- American & European options, In the money, at the money and Out of the Money options. Basic option strategies- Long call, short call, long put and short put, Reading Futures & Option Prices in the exchange market, Interest Rate and currency swaps- Meaning, Cost savings with swaps, Swap structure.

12.00
 
International Financing Decisions -ADRs, GDRs, Types of international bonds, Short and medium term instruments-Euro notes, Euro Commercial papers, medium term Euro notes, concept of LIBOR and LIBID, Link between Euromarkets and their domestic counterparts.

Cost of Capital for Foreign Investments: Cost of equity capital, Debt capital and Weighted average cost of capital for foreign projects

12.00

International Investments Decisions: Types of foreign private investments- Foreign Direct Investment and Foreign Portfolio Investments, significance of foreign investments, factors affecting international investment, Limitations and dangers of foreign capital, Capital Budgeting for Multinational Enterprises: Net present value, Incremental cash flows, Cannibalization, Sales creation, Opportunity Cost, Transfer Pricing

12.00

Multinational Working Capital Management: Financing Foreign Trade, International cash management, Accounts Receivables management, Inventory Management, Short term Financing

Essential Readings: 

ESSENTIAL READINGS:

  • MJ Mathew, ”Risk Management and Insurance”, RBSA Publications, Jaipur.
  • Neelam C.Gulati, ”Principles of Insurance Management”, Excel Books.

 

SUGGESTED READINGS:

  • Cherunilm: International Business
  • Karam Pal, B.S. Bodla, M.C.Garg, ”Insurance Management: Principles & Practices, Deep& Deep Publications

 

References: 

E-RESOURCES:

 

JOURNALS:

  • Global Business Review , http:// sagepub.com
  • Foreign Trade Review, http:// sagepub.com

 

Academic Year: 
2023-2024
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