INTERNATIONAL FINANCIAL MANAGEMENT

INTERNATIONAL FINANCIAL MANAGEMENT

MCOM Semester - I MCOM - 104

SHRI VENKATESHWARA UNIVERSITY

UTTAR PRADESH-244236

BOARD OF STUDIES Prof (Dr.) P.K.Bharti Vice Chancellor

Dr. Rajesh Singh Director Directorate of Distance Education

SUBJECT EXPERT Dr. S.N.Sahoo, Professor Dr. Shrinivas Shirur, Professor Mr. Ashotosh, Asst. Professor

COURSE CO-ORDINATOR Mr. Shakeel Kausar Dy. Registrar

Authors

Neelesh Kumar, Assistant Professor, MBA Department Hindustan College of Science & Technology Sharda Group of Institutions, Agra Units (1.2, 2.4, 4.2-4.2.1, 4.2.6, 4.4, 4.5.2-4.5.3, 5.10) ? Neelesh Kumar, 2019 DN Dwivedi, Professor of Economics, Maharaja Agrasen Institute of Management Studies, Delhi Units (1.4-1.4.1, 4.2.5, 5.2-5.5) ? DN Dwivedi, 2019 Dr Harmeet Kaur, Deputy Director, PAMETI Punjab Agricultural University Units (1.5-1.5.1, 2.2-2.3, 4.2.2-4.2.3, 4.5-4.5.1, 4.6-4.8, 5.9, 6.2-6.7.3) ? Dr Harmeet Kaur, 2019 Dr Sudershan Kuntluru Units (3.2, 3.4-3.4.2, 4.8.1, 4.9, 5.6-5.8) ? Reserved, 2019 Vikas? Publishing House: Units (1.0-1.1, 1.3, 1.4.2-1.4.4, 1.5.2-1.10, 2.0-2.1, 2.4.1, 2.5-2.11, 3.0-3.1, 3.3, 3.4.3-3.9, 4.0-4.1, 4.2.4, 4.3, 4.10-4.14, 5.0-5.1, 5.11-5.15, 6.0-6.1, 6.7.4-6.12) ? Reserved, 2019

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SYLLABI-BOOK MAPPING TABLE

International Financial Management

Syllabi

Unit I: International Finance - Importance, Finance Function in Multinational Firm, Trends in International Trade and Cross-border Financial Flows, Gains from international trade and investment, Balance of Payments, Currency convertibility, concept of revenue account and capital account convertibility.

Unit II: International Monetary System - Exchange Rate Regimes, International Monetary Fund, European Monetary System, European Monetary Union, World Bank.

Unit III: International Finance Markets - Euro-markets Institutions.

Unit IV: Foreign Exchange Market - Structure of Foreign Exchange Markets and participants, Types of Transactions, Mechanism of Currency Dealing, Exchange Rate Quotations, Arbitrage, Forward Rates, Foreign Exchange Market in India.

Unit V: Exchange Rate Theories - Purchasing Power Parity Theory, Interest Rate Parity, future spot exchange rate, methods of forecasting exchanges rates.

Unit VI: Nature and measurement of exposure and risk - defining foreign exchange exposure, transactions exposure, translation exposure, operating exposure, hedging strategies

Mapping in Book

Unit 1: International Finance (3-31)

Unit 2: International Monetory System (33-62)

Unit 3: International Financial Markets (63-88)

Unit 4: Foreign Exchange Market (89-128)

Unit 5: Exchange Rate Theories (129-149)

Unit 6: Nature and Measurement of Exposure and Mix (151-173)

CONTENTS

INTRODUCTION

UNIT 1: INTERNATIONAL FINANCE

1.0 Introduction 1.1 Objectives 1.2 Importance of International Finance 1.3 Finance Function in Multinational Firms 1.4 International Trade

1.4.1 Basis of International Trade 1.4.2 Trends in International Trade 1.4.3 Cross-border Financial Flows 1.4.4 Gains from International Trade 1.5 Balance of Payments 1.5.1 Components of BOP 1.5.2 Currency Convertibility 1.5.3 Currency Devaluation 1.5.4 Capital Account Convertibility 1.6 Summing Up 1.7 Key Terms 1.8 Answers to `Check Your Progress' 1.9 Questions and Exercises 1.10 References and Suggested Readings

UNIT 2: INTERNATIONAL MONETORY SYSTEM

2.0 Introduction 2.1 Objectives 2.2 History of International Monetary System 2.3 Exchange Rate Regimes 2.4 International Monetary Fund

2.4.1 Globalization and the Crisis (2005 - present) 2.5 European Monetary System

2.5.1 Background to the Emergence of the European Monetary System 2.5.2 Establishment of the European Monetary System 2.5.3 Functions of the European Monetary System 2.5.4 Benefits of the European Monetary Union 2.5.5 Challenges Faced by the European Monetary System 2.6 World Bank 2.7 Summing Up 2.8 Key Terms 2.9 Answers to `Check Your Progress' 2.10 Questions and Exercises 2.11 References and Suggested Readings

UNIT 3: INTERNATIONAL FINANCIAL MARKETS

3.0 Introduction 3.1 Unit Objectives 3.2 International Financial Markets

3.2.1 Instruments of International Financial Markets

1

3?31

33?62

63?88

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