ABOUT THE COURSE:This course provides a comprehensive understanding of financial decision-making in a global context. It covers the global financial environment, foreign exchange markets, risk exposure management, international portfolio investment, and cross-border financing strategies. Learners will gain practical insights into tools like derivatives, capital budgeting, and working capital management for multinational corporations. The course equips students and professionals to handle the complexities of international finance.INTENDED AUDIENCE:The course will be beneficial for undergraduate and postgraduate students of Management, Economics and Commerce, particularly those specializing in Finance. It will also benefit professionals such as financial analysts, risk managers, and treasury executives.PREREQUISITES:Basic knowledge of Financial Management and Economics is required. A course on corporate finance is recommended before this. INDUSTRY SUPPORT:MNCs, banks, export houses, consulting firms, and financial services companies involved in global operations.

Syllabus

Week 1:Global Financial Environment

Objective of financial management in a MNC
functions of international financial management
Special decision variables in international financial management
International monetary system

Week 2:Foreign Exchange Markets

Foreign exchange market
Exchange Rate Quotations and Arbitrage
Forward market
exchange rate theories- IRP, PPP and Fisher effects

Week 3:Financial Derivatives

Forward contracts in foreign exchange
Currency futures and currency options
Currency swaps
Interest rate swaps

Week 4:Forex exposure and risk

Concept of exposure and risk
Types of exposure – transaction, transnational and economic exposure
Measurement of exposure
Managing transaction exposure
Hedging Strategies

Week 5:International Portfolio Investment

Economic determinants
The national FDI policy framework
Benefits of international equity and bond investing
International capital asset pricing model (ICAPM)

Week 6:International Capital Budgeting

Issues and strategic considerations in international capital budgeting.
The adjusted present value approach (APV)
Financial, exchange, and political risks & their impact on cost of capital
Tax considerations: Branch vs. subsidiary, withholding tax, tax havens

Week 7:International working capital management

International cash management: cash positioning, centralized cash management, multilateral netting
Intra-corporate transfer of funds and transfer pricing
International receivables management: domestic vs. international, letter of credit, factoring, accounts receivables
International inventory management: advance purchases, stockpiling

Week 8:International Financing Decisions

Euro-money and Eurobond markets: size, growth, instruments, rates
Creation of Euro deposits and syndicated loan markets
International bond markets and multi-currency bonds: types and rational
International equity markets: foreign equity markets and their comparative analysis
Recent developments in Eurobond and capital markets