FRM-P13

FRM-P13

PGDM 2013-15: Term-IV

Forex Risk Management

PGDM- 2013-15: Term-IV

Credits	3
Faculty Name	Prof. B.P.Mishra
Program	PGDM
Academic Year and Term	2014-15 Term -4

1. Course Description: “Multinationality” is an important facet of modern business and it is important for managers to understand international financial development and acquire specific knowledge and skills to function in a multinational business environment. In this course we shall discuss about the foreign exchange market and instruments and determination of exchange-rates. The rates themselves are subject to change and it has profound effects on Sales, Costs, Profits, Assets & Liability Values and Individual wellbeing .Political barriers provide additional opportunities and risk when engaging in overseas borrowing and investment. Forex Risk management has the core focus in respect of the problems managers face from these currency risks and managing them for exploiting profitable business opportunities.

2. Student Learning Outcomes

· Be able to : have basic idea about foreign exchange market and determination of exchange rates

· Be able to ….have basic idea about different instruments in the forex market including foreign exchange derivatives

· Be able to … have an idea about how to use foreign exchange derivatives and other techniques to manage foreign exchange exposures/ risks .

· Be able to … appreciate the nuances of the International Capital budgeting decisions and funding rationale in respect of Risk management.

3. Readings and References

Text Book:

International Corporate Finance: Madura ( Tenth Edition), Cenage Learning

Further Readings:

A. Books :

i. Multinational Financial Management: Shapiro (Eighth Edition), John Wiley & Sons

ii. Multinational Business Finance: Eiteman, Stonehill, Moffett and Pandey (Twelth Edition), Pearson Education

iii. International Finance Contemporary Issues :M.D. Levi (Fourth / Third Edition), Routledge Paperback edition

iv International Financial Management: Eun and Resnick (Fourth Edition), 2009, Tata McGraw Hill.

v. Exchange Rates and International Finance: Copeland (Fourth Edition), 2007, Pearson Education

vi. International Financial Management: Apte (Fourth Edition), Tata McGraw Hill

vii. Multinational Finance: Butler (Second Edition), Thomson South-Western College Publishing

viii. International Finance: O' Brian (Second Edition), Oxford University Press

B. Magazines and Newspapers:

The Economic Times

Financial Express

The Economist

Bloomberg

The Wall Street Journal

The Financial Times

Pedagogy:

Case discussion, Class Presentations, Quiz

4.

Topics to be covered and indicative Sessions

· Introduction to Exchange rates and the world of International Finance -1
· Exchange Rate quotations -2
· Currency Derivatives-2
· International Parity Conditions -3
· Predicting Exchange Rates-1
· Measuring and Managing Foreign-Exchange Exposures-3
· Exchange Rate Risk management-Corporate perseptive-2
(Use of Mifors, Miocs ,POS,COS etc)
· Risk in International Capital Budgeting & International Funding -1
· Risk in International Investment & Risk diversification-1
· International Trade finance & Risk -1
· Indian Regulatory provisions for Forex risk management -2
· Project presentation -1

5.Evaluation :

The evaluation process is divided into four components.

(a) Quiz: 20%

(b) Class Participation: 10%:

This could be comprised of attendance, response and attitude in class and some group presentation exercises in class.

(c) Mid-Term:

30%

(d) End Term: 40%

: The end term examination will be a closed book one based on topics covered

during the entire course.

6. Academic Integrity:

Students involved in academic dishonesty will receive a

ZERO

grade on the particular component in which the violation occurred. Academic dishonesty consists of misrepresentation by deception or by other fraudulent means such as copying or use of unauthorized aids in tests, talking during in-class examinations; aiding another student’s dishonesty; and giving false information for the purpose of gaining credits.

NOTE: - the minimum pass mark in the course is 30%.

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Created By: Alora Kar on 02/26/2014 at 09:02 AM
Category: BM-II Doctype: Document

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