International Financial Management

MBA Second Year (Financial Management)

School of Distance Education

Bharathiar University, Coimbatore - 641 046

Author: Madhu Vij Copyright 2008, Bharathiar University All Rights Reserved Produced and Printed by EXCEL BOOKS PRIVATE LIMITED A-45, Naraina, Phase-I, New Delhi-110028 for SCHOOL OF DISTANCE EDUCATION Bharathiar University Coimbatore-641046

CONTENTS

Page No. UNIT I Lesson 1 Lesson 2 IFM Nature and Scope Balance of Payments UNIT II Lesson 3 Lesson 4 International Monetary System Purchasing Power Parity UNIT III Lesson 5 Lesson 6 Foreign Exchange Market Arbitrage and Speculation in Foreign UNIT IV Lesson 7 Lesson 8 Foreign Exchange Exposure Techniques for Covering the Foreign Exchange Risk UNIT V Lesson 9 Lesson 10 International Financial Market Instruments Foreign Bond and Euro Bond 175 206 227 117 161 83 94 45 71 7 22

Model Question Paper

INTERNATIONAL FINANCIAL MANAGEMENT SYLLABUS UNIT I IFM- Nature and Scope, IFM and Domestic financial management- Balance of paymentssignificance- preparation of BOP statement - Link between BOP and the economy. UNIT II International Monetary System - Gold standard - IMF and World Bank Exchange Rate mechanism - factors influencing exchange rate - Purchasing power parity and Interest Rate parity theorems. UNIT III Foreign Exchange Market - Transactions - Spot, Forward, Futures, Options and SwapsArbitrage and speculation in Foreign exchange market.- Exchange arithmetic, Spread, premium and Discount. UNIT IV Foreign Exchange Exposure - managing transaction, translation and operating ExposureTechniques for covering the foreign exchange risk - Internal and external techniques of risk. UNIT V International financial market instruments - International Equities - ADR and GDR Foreign Bond and euro-bond- Short-term and medium term instruments.