1. International Dimensions of Financial Management : The Emergence of the MNC, Nature of the MNC,
Objectives of the Firm & Risk Management, Domestic Financial Management & International Financial
Management.
2. International Monetary System: History of International Monetary System, Present Day Currency Regimes,
Regime Choices for Emerging markets, Birth of EMU and EURO
3. Balance of Payments (BOP): Principles of BOP Accounting, Components of BOP, Significance of ‘Deficit’ &
‘Surplus’ in BOP, India’s BOP and Economic Performance, Capital Mobility and Capital Account Convertibility.
4. The Foreign Exchange Market, Exchange Rate Determination, and Currency Derivatives: The Foreign
Exchange Market – Functions, Participants and Transactions – Exchange Rates and Quotations – Indian foreign
Exchange Market, Foreign Currency Derivatives – Currency Options , Futures, Forwards, Swaps – Foreign Currency
Derivatives in India , International Parity Conditions – Purchasing Power Parity- Interest rate Parity, Foreign
Exchange Rate Determination
5. Foreign Exchange Exposure & Risk Management: Two dimensions of Foreign Exchange Risk (viz. Exposure& Unanticipated change in Foreign Exchange Rates ), Types of exposure
Measuring and Managing Economic Exposure, Transactions Exposure & Translation Exposure : (a) internal
hedging strategies. (b) External or market based Hedging strategies.
6. International Financial Markets : International Banking & Money Market- International banking Services –
Capital Adequacy Standards-International Money Markets, International Equity Sources - Global Equity Markets-
Methods of Sourcing - Cross-listing in Secondary Markets- New Equity Issues, International Debt Sources-
Debt Management and Funding Goals - International Debt Instruments- International Bank Loans - Euronotes-
International Bond Market
7. Financial Management of MNCs : Foreign Direct Investment and Cross- Border Acquisitions; International
Capital structure and the cost of Capital- An Overview- Impacts of Internationalization on the Cost of Capital-
Improving Market Liquidity- Overcoming Market Segmentation- Causes of Segmentation- International
Diversification and the cost of capita l- International Cost of Capital Models- The Theory of Optimal Financial
Structure- Impact of Internationalization on Optimal Financial Structure - Financial Structure of Foreign Affiliates;
Multinational Capital Budgeting- Capital Budgeting: An overview- Capital Budgeting for Foreign Projects - Two methods-
Foreign Complexities- Parent vs project valuations; Multinational Cash Management- The Management of
Multinational Cash Balances- Cash Management Systems in Practice- Transfer Pricing & Related Issues- Blocked
Funds