MBA (IB) (2021-23)

Trimester-III
International Financial Management

Course Coordinator: Dr. Jayanta Kumar Seal Course Credit: 2

Course Introduction

International Finance Management is concerned with aspects of financial planning

and investment in financial assets in the global scenario in this age of free trade and
increasing internationalisation. The subject is aimed at providing insight to the
various analytical techniques required to take decisions involving foreign exchange,
asset pricing, hedging, and an understanding of foreign exchange markets and
monetary systems. The course also provides background of international trade, how
exchange rate system evolved, factors governing exchange rates and new
developments taking place in terms of various financial instruments in vogue.

Course Objectives

The objective of this course is to

 Familiarise the participants with the monetary systems,
 Explain foreign exchange markets, its features, terminology, types of
instruments,
 Describe factors affecting of the exchange rates, and
 Develop analytical framework for taking corporate finance decisions, and
 Provide a conceptual insights to foreign exchange risk management with
derivatives such as futures, forwards, options and swaps.

Programme Learning Goals covered through this Course

Learning Goal 1: International Perspective in Decision Making

LG1-Objective 1
Able to identify key “social /political /economic and other factors” in the international
business environment and develop an ability to integrate international perspectives in
decision making
Pedagogy

1
 As the subject is of practical utility and significance, the course would be
conducted in an interactive manner. Conceptual framework of the subject shall be
covered adequately through lectures/power point presentations.

Linkages with Other Courses

Understanding of basic concepts of finance and valuation principles are

prerequisites for the course. The participants of the course must have fair
understanding of how financial markets especially stocks and foreign
exchange function. The course provides international perspective in various
areas of finance assuming that basic exposure in financial management is
already given. The course deals with six distinct areas of finance i.e.
International Trade and Monetary Systems, Corporate Finance, Accounting,
Commercial, Exchange Rate Management, Derivatives & Risk Management

Evaluation

 Midterm 30
 Case Studies/Presentations/Assignments* 30
 End Term Examination 40

Text Book: International Financial Management

 
Authors: Alan C. Shapiro and Peter Moles
                  Adapted by: Jayanta Kumar Seal
 
ISBN: 978-81-265-5872-8

Session Contents Readings

Foundations of InternationalFinancial
Management: Chapter- 1, 3, 5, & 6 from
Introduction to International Financial Text Book
1&2 Management, The International Monetary Cases: Asian Financial
System, The Balance of Payments, Country Crisis, Argentina Crisis,
Risk A Greek Tragedy

The Determination of Exchange Rate:

Factors determining exchange rate,
Chapter – 2 & 4 from
3&4 Parity Conditions in International Finance and
Text Book
Currency Forecasting, Covered Interest
Arbitrage
Foreign Exchange Market:
Chapter - 7 from Text
5&6 Spot and Forward market, Arbitrage in Foreign
Book
Exchange Market
Derivatives Market:
Chapter - 8 from Text
7 Introduction to Options and Future contracts on
Book
Currencies

2
 Swaps: Chapter – 9 from Text
8&9
Currency and Interest rate swaps Book
Foreign Exchange Risk Management: Chapter- 10 & 11, from
Measuring and Managing Translation and Text Book
10,11&12
Transaction Exposure, Measuring and Appropriate cases will be
Managing Economic Exposure. distributed in the class.
International Financial Markets
Different instruments in the international
Chapter- 12&13, from
13 financial markets, Benefits of investing in
Text Book
international markets, Raising funds in
international markets

Cases and Exercises: Appropriate cases will be discussed in the class. Students are
advised to go through the Mini Cases at the end of each chapter of the Text Book. These
Mini Cases will also be discussed in the class.

References:

1) International Financial Management, Cengage Learning, India Edition,

- Jeff Madura
2) International Finance, Oxford University Press
- Rajiv Srivastava

3) International Financial Management, Tata McGrawhill, Sixth Edition,

- P.G.Apte

4) International Financial Management, Tata McGrawhill, Fourth Edition,

- Cheol S Eun & Bruce G Resnick

5) International Finance, Tata McGrawhill,

- Maurice D.Levi
-
Learning Goal 1: International Perspective in Decision Making
Able to identify key “social /political /economic and other factors” in the international
business environment and develop an ability to integrate international perspectives in
decision making
Evaluation Component to be used for AOL:
Case Studies/Presentations/Assignments
Rubrics to be used for IFM evaluation

Objective Excellent Good Fair Unsatisfactory

Able to Able to clearly Able to clearly Able to identify Unable to correctly identify even
identify key identify all the identify most of only few of the a few of the critical and relevant
“social critical and the critical and critical and social, political, economic or
relevant social, relevant social, relevant social, other factors in the international
/political political, political, political, environment, for the business

3
/economic and
other factors”
in the
international
business economic or economic or economic or
environment other factors in other factors, in other factors, in
the international the international the international
and develop an
environment, for environment, for environment, for decision in the given context
ability to a business a business a business
integrate decision in the decision in the decision in the
international given context given context given context
perspectives in
decision
making