Posts
(Department of Business Administration)
International Financial Management (578)
CHECKLIST
SEMESTER: AUTUMN, 2010
This packet comprises the following material:
1. Text book
2. Course outline
3. Assignment No. 1 & 2
4. Assignment forms (2 sets)
In this packet, if you find anything missing out of the above mentioned material, please contact at the address given below:
Director
Admission & Mailing
Allama Iqbal Open University
H-8, Islamabad
Course Coordinator
ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD
(Department of Business Administration)
1. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
2. SUBMITTING ASSIGNMENTS BORROWED OR STOLEN FROM OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN “AIOU PLAGIARISM POLICY”.
ASSIGNMENT No. 1
Course: International Financial Management (578) Semester: Autumn, 2010
Level: MBA Total Marks: 100
Q. 1 Explain the rules of the game under the gold standard? If the gold standard was so successful in maintaining fixed exchange rates why did the major industrial countries leave it? (20)
Q. 2 What do you mean by balance of payment in International Trade? How will you classify the accounts appearing in the balance of payment charts? (20)
Q. 3 Compare the advantages and disadvantages of a bank conducting its foreign business through a branch versus a wholly own subsidiary. Under what conditions would each form of organization be appropriate? (20)
Q. 4 What are the advantages and disadvantages of joint ventures from the viewpoint of the multinational firm? (20)
Q. 5 What is the relationship between forward rates and spot rates? How are forward rates and future contract alike and how do they differ? (20)
ASSIGNMENT No. 2
(Total Marks: 100)
This assignment is required to be presented in the workshop, which is expected at the end of the semester, probably prior to your final examination. Your attendance and presentation of the assignment in workshop is compulsory without which you will not be allowed to appear in the final examination in any case. You are also advised to prepare two copies of this paper. Submit one copy to your tutor as per the due date given in your tutorial schedule, attempt to incorporate examples from the newspapers, research journals and magazines your studied in relation to the subject courses. Remember, to provide the reference from where you quoted the example or source of data, otherwise it would consider plagarised.
Use the second copy resource person in workshop for presentation in the workshop. During the presentation, you can bring supporting material like transparencies and visual aids. You must ask your support on your own analysis regarding organization chosen. Placed below are 10 copies of which you should select only one for writing a paper consisting of 30 typed pages.
Topics:
1. Multinational Corporation
2. The Foreign Exchange Market
3. Hedging by importers and exporters
4. Multinationals and working capital management
5. Gold standard with paper money
6. Problems arising from multinational enterprises
7. The EURO currency market
8. International aspects of long term financing
9. Political risk and bond financing
10. Capital structure in different countries
You are required to select one topic according to the last digit of your roll number. For example, if your roll number is D-3427185 then you will select topic number 5 (the last digit): The report should include:-
i) Introduction to the topic
ii) Important sub-topics
iii) Practical study of the organization with respect to the topic
iv) Review of theoretical and practical situations
v) Merits, demerits, deficiencies or strengths of the organization with respect to topic under study
vi) Conclusions and recommendations
vii) Annex, if any
INTERNATIONAL FINANCIAL MANAGEMENT (578)
COURSE OUTLINE
Unit–1: International Business and Finance
1.1. International business
1.2. Multinational financial activities
1.3. Multinational corporations.
1.4. International monetary system
1.5. Currency values and terminology
1.6. Fixed versus flexible exchange rates
1.7. Contemporary currency arrangements
1.8. The European Monetary System (EMS )
Unit–2: Balance of Payments
2.1. Balance of payments accounting
2.2 The balance of payments accounts
2.3 Current account
2.4 Capital account
2.5 Statistical discrepancy
2.6 Official reserve account
2.7 Major country trends in trade and capital flows
2.8 Balance of payment adjustments and equilibrium
Unit–3: The Foreign Exchange Market
3.1. Functions of the foreign exchange market
3.2. Market participants
3.3. Foreign exchange rates and quotations
3.4. The spot market
3.5. The forward market
3.6. Parity conditions
3.7. Prices and exchange rates
3.8. Exchange rate forecasting
3.9. Purchasing power parity
3.10. PPP deviations and real exchange
3.11. Foreign currency options market
3.12. Option pricing and valuation
Unit–4: Foreign Exchange Exposure and Management
4.1. Types of foreign exchange exposure
4.2. Measurement of transaction exposure
4.3. Measuring economic exposure
4.4. Operating exposure
4.5. Forward, Money market, and Options market hedge
4.6. Exposure netting
4.7. Transnational exposure
4.8. Translation methods
4.9. Hedging translation exposure
4.10. Contractual hedges
4.11. Natural hedge
4.12. Avoiding and taking exchange risks
Unit–5: International Markets and Portfolio investments
5.1. International banking
5.2. Types of international banking offices
5.3. International money market
5.4. The world's bond markets
5.5. International equity markets
5.6. Market structure, trading practices and costs
5.7. Factors affecting international equity returns
5.8. Futures and options on foreign exchange
5.9. Currency and interest rate swaps
5.10. Currency risk and overseas investments
5.11. Global risk diversification
5.12. Effect of fluctuating exchange rates
5.13. Performance of International mutual funds
Unit–6: Working Capital Management
6.1. Constraints on positioning funds
6.2. International dividend remittances
6.3. Managerial incentives and evaluation
6.4. Transfer pricing and related issues
6.5. Blocked funds
6.6. Managing international cash balances
6.7. Cash receipts and payments
6.8. Managing receivables and payables
6.9. Inventory management
6.10. Working capital costs
Unit–7: Capital Structure and Capital Budgeting
7.1 Theory of optimal capital structure
7.2 Financial structure of foreign affiliates
7.3 Cost of capital
7.4 Cost of capital in segmented verses integrated markets
7.5 The financial structure of subsidiaries
7.6 Capital budgeting decisions
7.7 Project evaluation
7.8 Risk adjustment in the capital budgeting analysis
7.9 Sensitivity analysis
7.10 Foreign complexities
Unit–8: Financing from a Global Perspective
8.1. Internationalizing the cost of capital
8.2. Designing the financial structure
8.3. Choosing among the sources of financing
8.4. Cross listing on foreign stock exchanges
8.5. Barriers to cross listing
8.6. Sourcing new equity shares in international markets
8.7. Sourcing debt internationally
8.8. International bank loans
8.9. The international bond market and Euro note market
8.10. Management of interest rate risk
8.11. Outright instruments and techniques
Unit–9: Trade Financing
9.1. Foreign trade transactions
9.2. Government assistance in exporting
9.3. Counter trade
9.4. Import and export financing
9.5. Letter of credit
9.6. Draft
9.7. Additional documents
9.8. Role of banks in international trade
9.9. Types of risk
9.10. Risk analysis and management
Recommended Books:
(1) International Financial Management By Eun, Resnick
(2) Multinational Business Finance By Eiteman, Stonehill, Moffett
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