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International Finance
The purpose of paper is to give students an in-depth knowledge of International Business Environment with a special emphasis on position of India in the era of Globalization. In addition, it provides an exhaustive study of functioning of International Organizations with their relevance towards International Trade.
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.
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.
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
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
Financing Foreign Trade, International cash management, Accounts Receivables management, Inventory Management, Short term Financing
• Alan C. Shapiro, Multinational Financial Management, Wiley Publications.
• Sharan V, “International Financial Management”, PHI, 5th edition
• Jeevandam C, Foreign exchange & risk management, Sultan Chand & Sons, 10th Edition
• Cherunilam Francis, “International Business”, PHI, 5th edition.
• Avadhani,V.A,” International Finance, Theory and Practice”, Himalaya Publishing Company, New Delhi.
• Maurice, Levi, “International Finance”, McGraw Hill, Int. Ed. New York.
• S.K. Mathur, “International Trade and Finance”, Shivam Book House, Jaipur.
