This book is intended for all students of Finance and Management, in all Management Institutes and Universities. The objectives of the book are to provide students with a conceptual framework of financial decisions taken in a multinational company and to familiarise the students with the unique economic fundamentals and financial factors which challenge the financial manager in the international context. The book covers the entire syllabus, as approved by UGC on the subject of International Financial Management.
With increasing globalisation and opening up of the economies to free market forces of competition and efficiency, the role of multinational trade and finance has grown by leaps and bounds in the last decade. This is particularly more relevant in the Indian context, where the rupee was made convertible on current account and export and import trade is growing both in absolute and relative terms. The scripts of many corporates in India are listed and traded in main foreign stock exchanges and Foreign Financial Institutions and Foreign Institutional Investors are operating in Indian financial markets both of equity and debt nature. Foreign capital flows and foreign investment are growing and gaining in importance. The international forces are throwing new challenges to the Finance Manager. It is in this context that the subject of International Financial Management has assumed bital importance to the students of Finance Management who will be the future financial managers operating in international markets, for goods, services and finance. This book is intended to cater to their requirements.
This book is presented in simple non-mathematical terms, easily understandable to the average students and lay executives of the corporates. This has the advantage of harmonising the finance function with the investment function of the Financial Manager on the one hand and integrating the domestic finance with international finance, on the other. The material is kept as brief as possible, yet with a comprehensive coverage of all the modules as approved by UGC and in accordance with thei syllabus.
Contents –
Part 1 : Backdrop of International Financial Management
1. Introduction to International Financial Management
2. International Financial Environment
3. Goals and Growth of Multinationals
4. International Business Methods
5. Nature of International Risk Exposure
6. International Monetary System
Part 2 : Management of Exchange and Interest Rate Exposure
7. Determination of Exchange Rates
8. Forecasting Exchange Rates
9. Balance of Payments (Equilibrium Vs. Disequilibrium)
10. International Trade Flows
11. Interest Rates Parity
12. International Fisher Effect – Parity Relations
13. Time Factor in International Risks
Part 3 : Management of Risks in International Transactions
14. Foreign Exchange Markets
15. Government Influence on Exchange Rates
16. Exchange Rate Risk Management
17. Hedging in Derivative Markets (Futures and Options)
18. Hedging in Swap Market
19. Operational Exposure – Risk Management
20. Measurement of Politico Economic Risks (Country Risk Management)
21. Management of International Transactions Exposure
Part 4 : Management of International Business Operations and Practices
22. Operational Strategies of MNCs
23. Management of Multinational Operations
24. Management of Global Business Practices
25. Nature of International Business Finance – Practices
26. Inter-Corporate Funds Flow
27. Sources of Funds for MNCs
28. Operations in International Financial Markets
Part 5 : Management of Short-term International Financing
29. Short-term International Financing
30. Operations in International Money Market
31. Operations in Foreign Currency Markets
32. Management of Corporate Financing
33. conceptual Backdrop of Working Capital
34. Working Capital Management
Part 6 : Management of Long-term International Finance
35. Project Appraisal and Capital Budgeting
36. International Capital Flows
37. Foreign Investment (Direct and Portfolio, GDR and ADRs)
38. Financing of Debt and Equity Investments (Through Global Markets)
39. Measurement of Portfolio Risk
40. Risk Management in Investments
41. Portfolio Diversification and Risk Reduction
42. Multinational Taxation
Bibliography
