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Course Outline

Programme: PGDM (IMG)

Name of the Course: International Corporate Finance Credit: 01

Term-3 Academic Year: 2011-2012

Faculty: Dr. Himanshu Joshi Office Contact No.:01141242449

Email: himanshu@fsm.ac.in

Introduction: (Max 100 words)

Objective: This course analyzes financial problems corporations face that result from operating

in an international environment.

y Pricing in the foreign currency and Eurocurrency markets.y Use of forward exchange for hedging.y Raising Capital in the International Financial Marketsy International Investment Decisions.

Text Book:

Thomas J. OBrien International Finance: Corporate Decisions in Global Markets, Second

Edition, Oxford University Press, New Delhi

Reference Book:

Mihir Deasi, International Finance: A Case Book Wiley India Publications, New Delhi.

Pedagogy:A mix of pedagogical tools will be used cases, lectures, discussions, presentations,and experiential exercises.

Evaluation Component and weightage: (an indicative evaluation component break-up is

attached)

Presentation : 10

Project :20Class Participation :10

Mid Term :20End Term :40

________Total 100 Marks

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Session Plan:

Session No. Session Theme Additional Reading/Cases

1. Globalization and Multinational Firm (1)Sara Caliam,Decision,Decision, Wall

Street Journal, June27, 1996.

(2)Claudio Lodererand Andrews

Jacobs, The NestleCrash Journal of

FinancialEconomics

Volume 37, Issue 3,1995, pp. 315-339.

2. Introduction to Foreign Exchange: FXR

ates, FX rates changes, InternationalFX supply and Demand, Interbank FXmarket, Central banks and BOP,

Speculators, Triangular Arbitrage

Reading

3. Foreign Exchange and Purchasing

Power: Absolute Purchasing PowerParity (APPP), FX Mis-valuation,

OECD and APPP, FX Misvaluationand Trade imbalances.

Reading

4. Foreign Exchange and PurchasingPower: Relative Purchasing Power

Parity (R

PPP), Gold and FX rates,Bretton Woods system of Pegged

Exchange rates (1944-1973)The Euro, Currency Boards and

Dollarization, Trade Finance

Reading

5. Forward Foreign Exchange: Long and

Short forward FX positions, Differencecheck settlement, Forward FX

contracts and Hedging FX TransactionExposure, The Euro Currency Market

Reading

6. Forward Foreign Exchange: Synthetic

FX forwards and Money MarketHedging, Mark-to Mark Valuation, FXswaps, PERLs

Reading

7. Foreign Exchange and Interest Rates:(covered interest rate parity) CIRP

Reading

8. Foreign Exchange and Interest Rates:

Uncovered Interest Rate Parity (UIRP),Interest changes and FX rates, Siegels

Reading

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Paradox.

9. Foreign Exchange Operating Exposure Reading

10. Debt and Foreign Exchange Exposure Reading

11. Currency Swaps Reading

12. Economic Foreign Exchange Exposure Reading

13. Global Finance and Cost of Capital Reading14. Cost of Capital for Overseas

InvestmentsReading

15. Overseas Investment Decisions Reading

16. Case Mihir Desai International

Finance: A Case Book,Wiley.

17. Case Mihir Desai----------

18 Case Mihir Desai-------------

19. Project Presentations by Students

20. Project Presentations by Students

Evaluation Component Break-up Details

Class

Participation

Minimum Three components out of

these with individual break up to beclearly indicated in the Course Outline.

The total weightage should be 40%.

10

Case Analysis 15

Role Play Nil

Assignments 15

Quizes Nil

Mid Term

Examination

20 %

End TermExamination

40 %