Elective courses for the batch 2012 – 14 (Track - II: Finance & Banking)

and Financial Inclusion. NPA Management. Some amount of exposure to marketing concepts in banking business and marketing of 3rd party . loan pricing techniques. Additionally. and products also comes within the preview of this course. Market Risk and Operational Risk assessment. it will help students understand the mechanism of designing and delivery of asset and liabilities. Basel II norms. The course will also enable students to develop skills in Credit Risk.COMMERCIAL BANKING This course creates knowledge about the statutory and operational aspects of primary and subsidiary functions of commercial banks. banking products.

sound risk management practices can increase the market value of the firm. The global financial crises in the late 1980s and late 1990s have definitely convinced many firms that financial derivatives should play an important role in a firm's overall strategic development and risk management practices.DERIVATIVES MANAGEMENT: FUTURES. During the two financial crises. and commodity prices can affect not only a firm's market value. Learning how to use these instruments for hedging price risks. On the other hand. . Derivative contracts are one of key instruments used by firms to hedge their price risks. RISKS Unpredictable movements in exchange rates. interest rates. lapses in risk control often can lead to huge financial losses to a company. Learning how these contracts are priced in OTC and exchange traded markets. OPTIONS. The purpose of this course is to offer a step-by-step approach to understanding financial derivatives for ensuring sound risk management strategy for a company. In fact. a number of firms that did not have sound risk management practices were put out of business by adverse price movements. but also whether the firm will survive or not. The course will focus on: • • • Understanding the mechanics of financial derivative contracts.

The course encompasses the basic tenets of regression. The course would also include the application of the concepts for the better understanding of the financial markets. modern tools and techniques have become necessary to know the complex financial products and their behaviour in the markets. . univariate time series modelling. This is an elective but necessary to study for the students of Finance and Banking. problem of nonstationarity. The students enrolled in this course are expected to have already attended basic quantitative course and business research methods. Of late.FINANCIAL ECONOMETRICS The course is a gateway to econometric modelling and applications in finance. modelling volatility and multivariate time series. unit root tests. Financial econometric is a tool to help in understanding and analysing the finance better. The subject eases the processing of the financial information for various decision making purposes.

exchange rates. The paper mixes theory. Interest rates. Yield Measures. Valuing MBS and ABS. fixed Income Securities Market. Valuation of Bonds without Embedded Options. practical. asset backed securities. Bond Valuation. the students are supposed to make investment decisions in the fixed income securities market and understand their impact on managerial decisions. At the end of the course. Credit Analysis. Spot Rate and Forward Rate. and application of the theories using modern/contemporary tools in Microsoft Excel. important variables in Debt Market. inflation. It shall inter alia cover the nature of Fixed Income Securities. and Bond Portfolio Management. Bond Analysis and Risk Measurement. mortgage backed securities and CMOs.FIXED INCOME SECURITIES This course aims to provide technical knowledge of the Fixed Income Securities in the context of Indian as well as global markets. .

The students enrolled in this course are assumed to have successfully completed Corporate Finance-I in their first year. explore new and innovative sources of financing projects in the present day world. NPV v/s IRR Methods. Projecting the Cash Flow Statements. MIRR. .PROJECT APPRAISAL AND FINANCING This course is expected to enable students to understand mechanism of project appraisal in various stages. Major topics to be covered are: Projects with Different Lives. Project Risk Appraisal. It is essential for Finance and Banking Track because it gives them exposure to a wide range of financing techniques for core sector projects which are important constituents of our economy.

optimal portfolio selection. as this course is an extension and application of Risk and Return Chapter from Corporate Finance. equilibrium asset pricing models. Major topics include estimation of capital market parameters. . This course is an essential course in Finance in Banking Track. fundamental analysis and technical analysis and delegated portfolio management. The students enrolled in this course are assumed that they read thoroughly Financial Accounting for Managers and Corporate Finance-I courses and have successfully completed the same. the course will examine the role and performance of portfolio managers and mutual funds and how to evaluate whether these are value adding to investors.SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT The course aims at providing insights into the understanding how an investment professional would analyze the risk and return of different securities available for investment and allocate funds to create an optimal portfolio. In addition. trade-off between risk and return.

Financial services are the most happening place as corporations avail these in multiple ways. The students enrolled in this course are assumed to have successfully completed Corporate Finance-I and Corporate Finance-II in their first year. Factoring. Venture Capital. . It is essential for Sales. Major topics to be covered are: Leasing. Hence. Hire Purchase. Structured finance and Insurance Services. Marketing and Business Development track as these students would generally be marketing these services. Corporate India has started playing important roles in Global Markets as well. a basic knowledge is required for every student pursuing a management course. This course is essential for Finance and Banking Track as these students would be responsible for designing the services.FINANCIAL SERVICES India has emerged a strong economy in recent years. a few international acquisitions of the recent past are well known.

FINANCIAL STATEMENT ANALYSIS AND BUSINESS VALUATION Amongst the most preferred of all electives. and strategize for the corporate finance issues in a practical and innovative way. During this course. The course acquires relevance since financial statements are to be read and interpreted by all managers at various stages of their careers. this course is designed to use financial statement information in a variety of business analysis and valuation contexts. We also make an attempt to integrate accounting concepts and principles with concepts of finance. analyze and highlight the content of financial statements for determining earnings quality in the backdrop of GAAP for equity and business valuation. . we use.

in all forecasts or prognosis there is an element of RISK. and impart knowledge to. The course introduces perspectives. Of central importance in this context is valuation.FINANCIAL VALUATION OF INFORMATION TECHNOLOGY State-of-the-practice in software engineering economics often focuses exclusively on cost issues and technical considerations for decision-making. This course will attempt to develop the skill of. the process for determining the economic value of a product. the relationship between IT project valuation and three periods which include initial period. This risk must be taken into account in business decision making. The critical question is: “will the acquisition of technical ability enhance shareholder value”? Naturally. and risks. concepts and methods to be used in Valuation of Technology. There are several approaches to Valuation of Technology. construction period and operation and maintenance period of IT project. Uncertainty is a major challenge in the valuation of software assets and projects. or a process. Value-based software engineering (VBSE) expands the cost focus by also considering benefits. The business oriented methods have as their rational SHARE-HOLDER VALUE. The analysis is done before the decision to buy or to build. opportunities. service. students to be able to a) Assess whether the economics of an information technology system are attractive b) Determine the financial attractiveness of a new IT project to be taken up by an organization c) Assess market valuation of a technology company . This course analyzes significance and specialty of IT project valuation.

INTERNATIONAL FINANCIAL MANAGEMENT This course aims at providing an insight into the operations and functioning of international capital and foreign exchange markets. cost of global equity and debt financing. particularly for PGDM-IB students. External Commercial Borrowing norms in India. management of foreign currency risk and interest rate risk. This is an essential course in the Finance and Banking Track. global WACC and the optimal capital structure for the multinational enterprise. ADRs/GDRs and listing of shares abroad. international sources of debt and equity financing. designing a strategy to source equity globally. Major topics include the functioning of the international monetary system. FDI and the emergence of the Indian MNCs. as well Strategic Management Track. international capital budgeting. The pre-requisites for this course would be successful completion of the core courses on Financial Accounting for Managers and Corporate Finance. short-term treasury management and international transfer pricing. This course will provide an understanding of foreign exchange risk and hedging techniques used by MNCs and equip students with techniques of financial management in the context of companies engaged in global business. as well as providing a conceptual framework for financial decision making in the multinational enterprises. .

we also cover JVs.MERGERS. theories of mergers and methods of valuation. ACQUISITIONS AND CORPORATE RESTRUCTURING The course aims to help the participants appreciate the various perspectives of organic and inorganic growth choices. International mergers and acquisitions are also given its due weightage during the course. The course acquires relevance particularly since the wave of M & As in India has continued unabated. leveraged buyouts. the valuation involved thereto and the strategic dimension of the decision. takeovers etc. From studying the types of mergers. . ESOPs.

INFRASTRUCTURE AND REAL ESTATE FINANCING Physical infrastructure of the country is a cause of concern for sustenance of this growth. The importance of both these sectors of economy is emphasized. Roads. to estimate the need of investment required and to explore innovative financing options. Real Estate valuation. It is essential for Finance and Banking Track because this course is to enable students to get a holistic view of Indian infrastructure and real estate sectors. Sector-wise regulatory issues. Housing Finance. Telecommunication and Power including funds requirement for them. Hence investment in Indian infrastructure has caught the attention of the entire globe. Major topics to be covered are Public Private Partnerships. Aviation. Ports. Knowledge of modeling tools would be a definite advantage to the students. The students enrolled in this course are assumed to have successfully completed Corporate Finance-I in their first year. . Structured Finance Applications. Real Estate constitutes about one third of any economy. Railways. Pipelines.

and should finance with the cheapest available sources of funds. Given the level of sales and the relevant cost considerations. inventories and also short term liabilities. Revision of Financial Reporting and Analysis. Financing choices include the mix of current as well as long-term liabilities. accounts receivables. working capital management requires financial managers to decide what quantities of cash. In the management of working capital. firms should keep no unproductive assets. The distinguishing feature of working capital decisions is that the planning horizon is relatively short. financial managers must decide how the current assets are to be financed. Specifically. Receivables Management. In addition. what are the optimal amounts of current assets a firm should choose to maintain? 2. the firm is faced with two key questions: 1. Inventory Management and Assessment and Financing of Working Capital. what is the most economical way to finance these current asset investments? To produce the best possible returns. Students will learn to manage assets such as cash. Cash Management. The topics that will be covered are Working Capital Policies. accounts receivable.WORKING CAPITAL MANAGEMENT Working Capital Management is the process of planning and controlling the level and mix of the current assets of the firm as well as financing these assets. . inventories and other liquid assets the firm will hold at any point in time. and Corporate Finance courses will come in very handy during the tenure of this elective. Given these optimal amounts. They will be able to find answers to questions like: How should the firm manage its cash? To whom should the firm grant credit? How much inventory should the firm keep? The course focuses on the most advantageous ways of addressing the problems in the management of working capital.

Earnings at Risk. Forward Rates. Bonds. Valuations of FRA’s. Merton Model. Copula Functions. Captions. Market Risk – Value At Risk: Methods of calculating VaR – Historical. Forward Rate Agreements (FRA’s). Total Return Swap. Participants in the Clearing/Non Clearing areas in the Derivative Market. Duration and Convexity Matching. Swaps Interest Rate swap. Binomial Tree Method and Taylors Series Method. Swaptions. Stress Testing. Prerequisites for the course: The participants are supposed to have the basic knowledge of financial derivatives and basic mathematics. . Portfolio Immunization. Design the OTC derivative instrument with its valuations Course content: Explanation of the Treasury Function in an Organisation. Valuations of Swaps using bond pricing and FRA methods. Players in the CDS market. Delta. Zero Rates. Gap Management. Floors. Interpretation of CDS Spreads/Index. Fixed Income Securities in the US Market. Understanding Balance Sheets from ALM perspective. Gamma and Vega hedged portfolio. SPVs. CBO. Money Market and Capital Market Securities. Monte Carlo Simulation. commodity swap. KMV Model. Asset Liability Management. Cross Currency swap. Valuation of Treasury Bills. Duration Gap Analysis. variance swap and correlation swap. Simulation. SAPM and Derivarive courses. CDO etc. Valuations of Equity and Equity Index Options using Black Scholes Model. Credit VAR . Introduction to the Credit Derivatives Market: . Learning outcomes: After this coursethe participants will be able to: • • • • • Understand the overall risk measurement framework Recognize the types of risk associated with the financial assets. Cash Flow at Risk Relevance to the track: This course is necessary in order to apply the various hedging tools to manage the risk associated with different class of financial assets which the student studied in corporate finance. Bootstrap VAR. Quantify the risk Identify and execute the best method to hedge the risk associated with the financial assets. Collars.TREASURY ANALYTICS Learning goals: This course aims at providing the detailed application of various tools in finance to manage the different types of risk associated with financial assets and a comprehensive understanding of how to manage treasury affairs with a detailed look at the various financial markets and instruments that can be traded. CDS. CLO. Liquidity VAR. Valuations of CDS. Valuation of the OTC Derivative Instruments . Notes. Parametric VAR. Caps.

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