INTERNATIONAL FINANCE

Learning outcomes:

At the end of the course, students will be able to:

 demonstrate knowledge of theories related to foreign exchange rate

determination
 explain the nuances of international trade and international capital
budgeting

Module I - International Economics:

International flow of funds, International trade theories, exchange rate

determination, PPP, IRP, relationship between IRP & PPP, reasons for
departure from IRP.

Module II - Forex Market:

Structure-India and global, Exchange rate quotes, Spot, forward, cross, inverse,
direct quote, Option forwards, Swaps, settlements.

Currency Futures in India – MCX and NSE.

Module III - Exchange Risk Management:

Defining and measurement of foreign exposure, types of exposures, vari ability

of cash flows, Management of Exchange Risk, hedging, choice of currency of
invoicing, internal & external hedging, netting, offsetting, currency
derivatives, forwards, futures, options, coping with operating exposure.

Hedging practices followed by Indian IT industry and other importers /

exporters.

Module IV - International Projects Management:

International Projects Appraisal, issues in cost of capital, APV, choice of

discount rate, NPV, international CAPM.
Module V – Working Capital Management in MNCs:

Cash management – Receivables management – payables management – working

capital financing issues – other issues in working capital management by MNC.

Text Books:
1. Jeff Madura. International Corporate Finance, 8th Edition, Thomson South-
western.
2. Alan C Shapiro. Multinational Financial Management. John Wiely & Sons

Reference Book:
1. Levi, Maurice D. International Finance, Routledge Publication
2. Resnick, Bruce G; Eun, Cheol S. International financial management, Tata
McGraw Hill