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Academic Year 2017-2018 Semester 3

Department MBA Course Type Elective


International Financial
Course Title EC IB02
Management Course Code
Instructor Dr.N.ARUNSANKAR Email id arunsankar@miim.ac.in
No of session Classroom session : 40 Tutorial Session 20
Internal Marks 40 External Marks 60

SYLLABUS

INTERNATIONAL FINANCIAL SYSTEM-EC IB 02


Module 1
Introduction to International Financial System International Monetary System: Features and
requirements; System of exchanging currencies – From Bretton Woods system to free float and
convertibility; Pegging of currencies –target zone arrangement; European monetary system;
International liquidity.
Module 2
Exchange Rate Determination Exchange rate determination in spot and forward market – Interest
Rate Parity (IRP), Purchasing Power Parit, Fisher open equation Monetary and portfolio balance
approaches; Short run demand and supply theory, BOP theory, and Growth theory; Forecasting
Exchange Rate.
Module 3
Foreign Exchange Markets and its Activities Exchange rate quotations and practices; Foreign
exchange market activities; Forex Exposure andRisk Management. Arbitraging, hedging,
forward contracts, forefeiting and speculation.
Module 4
International Financial Markets and Instruments Changing scenario; International capital and
money market instruments; International development banking; Euro – currency markets;
International securities markets and instruments – Bond and notes market; equity market,
GDR,ADR, EDR and IDR; Integration of financial markets and approach; Role of financial
intermediaries.
Module 5
International Debt crisis Causes and impact on the developing and developed countries;
challenges of International debt crisis.
Recommended Books:
1. Levi, Maurice, International Finance, McGraw Hill Inc., New York.
2. Shapiro C, Alan, Multinational Financial Management, Wiley India.
3. Sharan V, International Financial Management, Prentice Hall of India Private Ltd, New
Delhi.
4. Seth A.K., International Financial Management, Rutledge.
5. S.kevin-International financial management-eastern economic edition
6.p.k.jain ,josette peyrard,surendra s yadav-macmillan
Course Objective:
01. To provide an introduction about international financial system to the participants.
02. To familiarize the participants concepts of exchange rate determination and foreign exchange
markets.
03. To familiarize the participants on international financial markets, instruments and debt crisis.
PROGRAM EDUCATIONAL OBJECTIVE

Our Graduates shall

 PEO1. Excel as management professionals, entrepreneurs or pursue higher studies in


management, keeping professional ethics and social responsibility in all their endeavours.
 PEO2. Exhibit multi-disciplinary skills like team work, leadership and professional
competence in all their activities.
 PEO 3. Pursue an innovative approach to face current managerial and social challenges
faced by the society.
 PEO 4. Demonstrate ability to adapt to a rapidly changing environment by applying new
skills and competencies.

PROGRAM OUTCOMES

 PO 1.Apply knowledge of management theories and practices to solve business


problems.
 PO 2.Foster Analytical and critical thinking abilities for data-based decision making.
 PO 3. Ability to develop Value based Leadership ability.
 PO 4. Ability to understand, analyze and communicate global, economic, legal, and
ethical aspects of business.
 PO 5. Ability to lead themselves and others in the achievement of organizational goals,
Contributing effectively to a team environment.

Course Outcomes:
1. Know the desirable features of an effective international monetary system, analyze the
characteristics and problems of the Bretton Woods system, and evaluate the current
international monetary arrangements with respect to the difficulties that they face

2. Demonstrate a basic understanding of the ideas, theories, and Systems of international


Financial Environment.

3. Describe how the foreign exchange market works; identify the main determinants of
movements in floating exchange rates, and to relate exchange rate policy to
monetary policy
4. Describe the development, structure, and operations of various financial institutions,
markets and instruments, and the role of financial intermediaries in the payments system
in the international environment..
5. Know/Describe the causes for international debt crisis and impact on the developing
countries and developed countries.
SESSION PLAN

Topic Methodology Learning outcome Reference


used
Session
no

MODULE I

Introduction to Introduction Gaining the knowledge Book 6,


1 International through lecture about International Chapter 3
Financial System and class Financial System
International discussion, PPT, International Monetary (Pg No : 18-
Monetary System. System. 27)

Features and Student Knowing the basics of Book 6,


2 requirements; System presentation System of exchanging Chapter 3
of exchanging ,Class currencies.
currencies Discussion, PPT, (Pg No : 18-
27)

Bretton Woods Student able to know and discuss Book 6,


3 system to free float presentation, the faille of the Bretton Chapter 3
and convertibility Class discussion, Woods system to free float
PPT, and convertibility (Pg No : 18-
27)

Pegging of currencies Student gain knowledge about Book 6,


4 –target zone presentation Pegging of currencies – Chapter 3
arrangement; ,Class discussion, target zone arrangement;
PPT, (Pg No : 18-
27)

European monetary Student seminar, gain knowledge about Book 6,


5 system; International PPT, Case study: European monetary Chapter 3
liquidity . system; International
liquidity . (Pg No : 18-
27)
UNIT TEST 1

MODULE II

Exchange Rate Student Gain the knowledge about Book 6,


6 Determination Presentation, using Exchange Rate Chapter
Exchange rate Lecturing Determination Exchange 6(Pg no :58-
determination in spot rate determination in spot 66)
and forward market and forward market in
financial decision making

Interest Rate Parity Student Understating the concepts Book 6,


7 (IRP), Purchasing Presentation, and theories of Interest Chapter
Power Parit, PPT, Class Rate Parity (IRP), 6(Pg no :58-
Discussion Purchasing Power Parit, 66)

Fisher open equation Student The students can infer Book 6,


8 Monetary and Presentation, about the about the Chapter
portfolio balance PPT, Class importance of Fisher open 6(Pg no :58-
approaches Discussion, equation Monetary and 66)
portfolio balance
approaches

Short run demand and Student Employing Short run Book 6,


9 supply theory presentation, demand and supply theory Chapter
PPT, Class for decision making 6(Pg no :58-
Discussion, Case 66)
Study

BOP theory Student Understating the BOP Book 6,


10 presentation, theory for doing Chapter
PPT, Class transaction 6(Pg no :58-
Discussion, Case 66)
Study

Growth theory; Student Understating the Growth Book 6,


11 presentation, theory for doing trade in Chapter
PPT, Class international environment 6(Pg no :58-
Discussion, Case 66)
Study

Forecasting Exchange Student Studies ill able to forecast Book 6,


12 Rate Costing as an aid presentation, the exchange rate by Chapter
to Management PPT, Class using different tools or 6(Pg no :58-
Discussion, Case method like time series 66)
Study
UNIT TEST 11

MODULE III
Foreign Exchange Students will know and
Class Discussion, Book 5,
Markets and its understand about
13 , PPT, Chapter 2
Activities Exchange importance of Foreign
(Pg No : 12-
rate quotations and Exchange Markets and its
22)
practices. Activities Exchange rate
quotations and practices.

tools
Foreign exchange
Class discussion, After the completion of Book 5,
market activities
14 PPT, Student the topic the students will Chapter 2
presentation, be aware of the various
Advantages and Foreign (Pg No : 12-
exchange market and its 22)
activities
Arbitraging, hedging,
Class discussion, The students will be able Book 5,
15 to use Arbitraging, Chapter 2
hedging, concepts in the
business (Pg No : 12-
22)

forward contracts, Lecture, PPT, The students will gain the Book 5,
16 forfeiting and Class discussion knowledge about use of Chapter 2
speculation forward contracts, (Pg No : 12-
forfeiting and speculation 22)
Forex Exposure The students will gain
Class Discussion, Book 5,
andRisk Management knowledge about use of
17 PPT, Chapter 2
the importance of Forex
(Pg No : 12-
Exposure andRisk
22)
Management

. The students will gain


Class Discussion, Book 5,
knowledge about use of
18 PPT, Discussion Chapter 2
Forex Exposure
with market the importance of Forex
andRisk Management
Examples, (Pg No : 12-
Exposure andRisk
22)
Management
UNIT TEST 111

MODULE IV

International Class Discussion, The students will infer Book 6,


19 Financial Markets and PPT, case study about how to use the Chapter 16
Instruments Changing Instruments Changing
scenario; scenario of the (Pg No :
international market 235-258)

International capital Student The students will infer Book 6,


20 and money market presentation, about how to use the Chapter 16
instruments; discussion. International capital and
money market instruments (Pg No :
for funding generation 235-258)

International Class Having idea about the Book 6,


21 development banking; Discussion, PPT, International development Chapter 16
Euro – currency Discussion with banking systems and Euro
markets; Examples, – currency markets (Pg No :
235-258)

international Class Discussion, Understanding the Book 6,


22 securities PPT, Discussion securities which are Chapter 16
with Examples, traded in the international
market for fund generation (Pg No :
235-258)

markets and Student Understanding the Book 6,


23 instruments – presentation, securities hic are traded in Chapter 16
Standards, Bond and class discussion, the international market
notes market; equity PPT for fund generation (Pg No :
market, GDR,ADR, 235-258)
EDR and IDR;
Integration of Student able to know and apply the Book 6,
24 financial markets and presentation, Role of financial Chapter 16
approach; Role of class discussion, intermediaries
financial PPT (Pg No :
intermediaries setting 235-258)

UNIT TEST 1V

MODULE V

International Debt
Student The students can infer and
crisis Causes and
25 presentation, understand the reasons for
impact on the class discussion, International Debt crisis Pdf-
PPT Causes and impact on the Research
developing countries;
developing countries and papers
- how it can be avoided
International Debt
Student The students can infer and Pdf-
crisis Causes and
26 presentation, understand the reasons for Research
impact on the class discussion, International Debt crisis papers
PPT Causes and impact on the
developed countries
developing countries and
how it can be avoided
Challenges of
Student Develop the model for the Pdf-
International debt
27 presentation, overcoming the challenges Research
crisis. class discussion, in the international papers
PPT financial makers

TEST V
MAPPING OF CO AND PO

CO/PO PO1 PO2 PO3 PO4 PO5


CO1 3 1 1 3 3
CO2 3 3 2 2 2
CO3 3 2 2 2 2
CO4 3 3 1 2 1
CO5 3 1 1 2 1