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FM404: Foreign Exchange Management Objective To acquaint the students with the mechanism of the foreign exchange markets,

measurement of the foreign exchange exposure, and hedging against exposure risk. Course Contents Unit-I Foreign Exchange: Concept and Significance of Foreign Exchange . Overview of Foreign Exchange arkets: Cash ! Spot Exchange, Eurocurrenc" arkets, arket #$a"ers, %nter&ank , Corporates, echanism of making a foreign pa"ment, Costs 'ssociated with %nternationa$ pa"ments. Unit-II (eterminants of Exchange )ates: eaning ! *uotation of Foreign Exchange )ates, Factors affecting exchange rates, Theories of determination of foreign exchange rates, Forecasting exchange rates. Forex Trading: Trading #rocedure, anagement of %nternationa$ Trade Transaction, %nformation 'na$"sis for Trading, Specu$ation, %nternationa$ Transactions Financing. Unit-III Foreign Exchange )isks: T"pes of )isks ! exposures for corporates, exports, imports, &orrowing, competitions, easurement and quantif"ing of )isks. +a$ue at )isk ,+a)-: %ntroduction to +a) , 'pp$ication of +a) in Forex arkets. Too$s of )isk anagement: Forward.Futures.Swaps.F)', Options. Unit-I /edging in Forex arket: /edging through Forward.Futures.Options.Swaps, #ricing of Options.Swaps.Forwards, Factors affecting pricing. %ndian Forex arket: Foreign exchange administration in %ndia Setting up and operating a forex dea$ership.Exchange Contro$: O&0ectives and ethods of Exchange Contro$, Exchange Contro$ in %ndia, FE)' 1234 to FE ' 1223 5i$$. !uggeste" #ea"ings: 1. $%iber&#.'. Exchange Risk and Corporate International Fiance.6ondon, acmi$$an,1237 8. (uca Corne%ius Trading in the Global Currency Markets& 9.:. #rentice /a$$, 122;. 4. !utton&).*.Trading in Currency Options& 9ew <ork %nstitute of Finance,1273 =. +au% #oth : Mastering Foreign Exchange and Money Markets, #itman, 6ondon. ;. ,hag-ati& . an" !rinivasan& /.0. 1E"s.2 > Foreign Exchange regimes and Economics De elopment ?. #aj-a"e $. .! Foreign Exchange! International Finance " Risk Management# @niversit" 6aw #u&$ishing Co. #vt. 6td.

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