SMR

(A) INTERNATIONAL FINANCIAL MANAGMENT

DETAILED SYLLABUS TEACHING HOURS OBJECTIVE OF THE MODULE

CREDIT:3
TEACHING METHODOLOGY

MOD NO.

Financial Management in a Global Context Why study international Finance The finance Function The Emerging Challenges Recent Challenges in Global financial Markets International Monetary Systems European Monetary System Euro and The European Monetary Union Fixed versus Flexible Exchange Rate Regimes Balance of Payment Theory Concepts. Definitions. Types, Calculations. Instruments of Trade Policies - both Tariff& Non Tariff Balance of Payments Balance of Payments Accounting Balance of Payments Accounts The Current Account The Capital Account International Parity Relationships and Forecasting Foreign Exchange Exchange Rates Interest Rate Parity Covered Interest Arbitrage Interest Rate Parity and Exchange Rate Determination Reasons for Deviations from Interest Rate Parity] Purchasing Power Parity PPP Deviations and the Real Exchange Rate Evidence on Purchasing Power Parity The Fisher Effects Forecasting Exchange Rates Efficient Market Approach Fundamental Approach Technical Approach The Market for Foreign Exchange Function and Structure of the FOREX Market FX Market Participants Correspondent Banking Relationships The Spot Market Spot Rate Quotations

Theory

Theory

Theory

Theory with Problems

Theory with Problems

The Bid-Ask Spread Spot FX Trading Cross Exchange Rate Quotations The Forward Market Forward Rate Quotations Long and Short Forward Positions Forward Cross Exchange Rates Swap Transactions Forward Premium International Banking and Money Market International Banking Services Reasons for International Banking The World's Largest Banks International Money Market Eurocurrency Market Euro credits Forward Rate Agreements Euro notes Euro-Medium-Term Notes Euro commercial Paper Managing Transaction Exposure Selective Hedging of Transaction exposure Techniques to eliminate transaction Exposure -futures Hedge, Forward Hedge Money marketing Hedge, Currency Comparison of Hedging Techniques. Managing Translation Exposure Translation methods Functional verses Reporting Currency Comparison of four Translation Methods Illustration Total

Theory

Theory with Problems

Theory with Problems

29 hrs

Text Book: Multi-National Financial Management A Shefero, Johnvwhily publications International Financial Managmenet Madhuvij, Xcel Publications

(B) DERIVATIVES
MOD NO. DETAILED SYLLABUS TEACHING HOURS OBJECTIVE OF THE MODULE

CREDIT:3
TEACHING METHODOLOGY

Derivatives: Definition of derivatives, evolution of derivatives, factors contributing to the growth of derivatives markets, types of derivatives in Liberalized India. Hedging & speculation with currency futures Illustrations Interest Rate options - Caps, Floor, Collar Swaps, types of Swaps. Currency & interest rate swap Problems Basis interest rate swaps - Forward rate agreements Option contracts and trading, strategies on stocks & Currencies Characteristics of option contracts Option trading strategies illustrations Credit derivatives The birth of a new market What are the credit derivatives - Credit default swap, total return swap Implementation of value at Risk System (VAR) Overview of VAR methodology Statistical concepts Application of VAR VAR for Foreign Exchange Position - V AR for common shares

Total
Text Books:

19 hrs

1. Options, Futures and other derivatives, John Hull, Prentice Hall of India 2. Financial Derivatives - SL Gupta, Prentice Hall of India. 3. Futures and options by Bagri Note: The Syllabus has been framed for 48 hours comprising Part A: International Financial Management and Part B: Derivatives. Higher coverage has been given for International Financial Management. Keeping this aspect in view, the examiner should give a higher weightage of 2/3rd for International Financial Management and the balance 1/3rd for Derivatives.