Course info

Course Outcomes

Students of this course will be able to:
1. To discuss international financial markets and institutions.
2. To analyze Exchange Rate Mechanism
3. To appraise Export Import Financing Mechanism.
4. To enumerate Financial Management of Multinational Corporations

Syllabus Contents

Unit 1
International Finance:
a) Concept and Scope of International Finance, Foreign Exchange
Reserve, Balance of payment current Account, Convertibility-Current
Account and Capital Account.
b) World Financial Markets and Institutions: International Banking,
International Bond Market, International Equity Market, World Bank and
International Monetary Fund (IMF).

Unit 2
Foreign Exchange Market:
a) Foreign Exchange Market: Structure, Types of Transactions, Exchange Rate
quotations and arbitrage between Exchange rate and Interest Rate
b) Exchange Rate Mechanism: Determination of exchange rate in spot market
and forward market, Factors influencing exchange rate, Theories of Exchange
Rate Behavior.
c) Risks in International Operations: E x c h a n g e rate risk, Interest
rate risk and Political risk.

Unit 3
Import-Export Mechanism and Finance:
a) Export Credit Guarantee Corporation, EXIM Bank, Foreign
Exchange Association of India.
b) Export Import Financing Mechanism: Credit,
Suppliers Financing in foreign currency for exports and rupee
finance
c) Non-resident Accounts: Repatriable and Non-Repatriable, Significance
of NRA

Unit 4
Financial Management of Multinational Corporations(MNCs):
Foreign Direct Investment, Cost of Capital and Capital Structure of a MNC,
Capital Budgeting and Cash Management of MNC, Country Risk Analysis,
International Taxation, and Double Taxation Avoidance Agreements