1. PREPARATION OF COURSE OUTLINE & OPERATION OF COURSES
1. The Course Outline is to be made session wise as per sample enclosed. For all the
sessions, there may not be details under all six rows. However, details are to be given as
maximum as possible.
2. The first page of the Course Outline is to contain – Objective of the Course, Pedagogy,
Methods of Evaluation, Name of the Faculty with Contact Details like tel. nos. and e-mail
ID(s). It is preferable to indicate some time slot(s) on some particular day(s) for
discussion with students.
3. References of Books, Journals and other Reading Materials are to be given in the last
page of the Course Outline.
4. There should be a good blend of basic/fundamental concepts, application exercises and
project work. There should be a judicious mix of teaching by faculty and students’
presentation.
5. The pedagogy should be aimed to encourage the students:
- To develop reading habits.
- To use the library more including Digital Library.
- To inculcate more thinking and idea generation.
- To apply concepts in application exercises and cases.
- To participate in discussion process.
- To put around 100 hours of outside-the-class effort for 30 contact hours of
classroom study for a course.
6. Two copies of the Course Outline are to be given to the office of the respective course
coordinator on the first day of the operation of the course.
7. Students are to be asked to have periodic discussion with faculty for project work.
8. A course must have at least three components of evaluation. End-term examination
should not exceed 30 percent of the total marks. It is suggested to have Mid-term
examination except some specific elective courses.
9. End-term examination is to be conducted during the time slot indicated for the same in
the Academic Calendar.
10. There should be continuous evaluation throughout the Term. Interim feedback is to be
given almost immediately after quiz/Mid-term examination. Counseling is to be done
with the students who are not performing well or being absent from the class. Information
is to be given to the Academic Chairperson regarding the students not performing
satisfactorily in any terms. Evaluated answer sheets are to be shown to the students.
11. Course Material is to be given to the respective course coordinator much in advance to
make copies for the students.
12. Question Paper is to be given to the respective course coordinator much in advance for
making copies.
13. Course grade is to be submitted within two weeks when there is a break in between
Terms, and three weeks when there is no break in between Terms.
14. Classes for a course are to be conducted with good phasing throughout the Term, except
in case of some outstation Visiting Faculty.

2. ISB&M Pune Faculty Name: Amit Gupta
PGDM
Term IV, 2013-15
INTERNATIONAL FINANCE
COURSE OUTLINE
1. COURSE OBJECTIVE
 The International Finance Environment has experienced major changes in recent years
and the economic crises across countries have not only affected the performance of
MNCs, but fundamental lessons can also be learnt from these crises. The overriding
objective of the text is to provide a thorough, up-to-date treatment of the various issues in
International Finance. The course is fundamentally designed to serve as an introduction
to the study of International Financial Management for students and managers with little
exposure to the details of this area. The course provides and overview of the financial
environment in which international firms operates. The course also provides an extensive
treatment of derivatives, currency futures and options contracts as alternative tools to
hedge foreign exchange exposure.
 The organization and operation of the foreign exchange market and also presents the
fundamental party relationships among exchange rates, interest rates and inflation rates.
The measurement and management of foreign exchange exposure are discussed in detail.
 The course also discusses the International Monetary System, International Working
Capital, Management International Taxation, International Banking and the Euro and its
Implications for Indian Banking.
 The course also provides an in depth treatment of cost of capital and capital structure of
the Multinational firm, foreign direct investment country risk analysis, and capital
budgetary for the multinational firm. Finally, both types of swaps – interest rate and
currency swaps as they have evolved during the last few years, Euro-currency market and
ADRs and GDRs have also been discussed.
2. CONTENTS OF THE COURSE
1) International Financial Environment
2) The Balance of Payments
3) The Foreign Exchange Market
4) Forwards, Swaps and Interest Parity
5) Currency and Interest Rate Futures
6) Exchange Rate Determination and Forecasting
7) Management of Translation & Transaction Exposure
8) Management of Economic and Operational Exposure
9) Management of a Multinational Firm
10) Multinational Capital Budgeting

3. 11) Country Risk Analysis
12) International Banking
13) Interest Rate and Currency Swaps
14) Global Vs. American Depository Receipt
2. COMPONENTS OF EVALUATION (Mandatory)
1. Viva : 15%
2. Live Project : 15%
3. Quizzes, Assignments : 25%
4. Mid-Term Examination : 15%
5. End Term Examination : 30%
3. SUGGESTED READINGS (Books)
i. Interantional Finance – Avadhani
ii. Foreign Exchange Management – A.V.Rajwade
INTERNATIONAL FINANCE
Term IV (July – Sept 15, 2014)
Sessions 1&2:
i. International Financial Environment
ii. The Balance of Payments
iii. The Foreign Exchange Market
Pre-session
Reading
Basic knowledge of domestic & international economic environment
Refer the
recommended
Books.
Classroom
Session
 Explains the meaning of multinational corporation, Defines the
goals of MNC, States the different, methods of international
business, Defines the international monetary system, Discusses
the government influence on exchange rates.
 Describes the meaning of balance of payment, Explains the
accounting principles of BOP, Defines the different components
of BOP, States the meaning of deficit and surplus of BOP,
Describes the importance of BOP.
 Defines the global financial market, Describes the domestic and
offshore market, Explains the structure of foreign exchange
market, States the types of transactions and settlement dates,
Recognizes the exchange rate quotations, arbitrage and forward
quotations etc., Discusss the exchange rate regime and foreign
exchange market in India.
-
Group Work
(In Classroom)
Group Discussion on Case:
The case will be provided in the class.
Case will be
given in the
class
Assignments Assignment Problems in Reading Material
Assignment
Sheet will be
given in the

4. class
Conceptual
Exercises/
Application
Exercises/
Case Study
Exercise will be provided before the session.
Learning
Outcome
 Formulate strategies to enter into international market.
 Construct balance of Trade/Payment.
 Foreign Exchange exposure; transaction & operating.
Sessions 3&4:
i. Forwards, Swaps and Interest Parity
ii. Currency and Interest Rate Futures
iii. Exchange Rate Determination and Forecasting
Pre-session
Reading
Basic Terms likes, arbitrage, hedging and speculation, Parity
concept.
Refer the
recommended
Books.
Classroom
Session
 Defines arbitrage, Explains covered and uncovered arbitrage,
Defines swap and forward swaps, Describes the different
forward rates in India.
 Defines future contracts, Explains the currency and interest rate
futures, Discusses hedging and speculation, Describes future
price quotations.
 Defines the theory of PPP, IPR and International Fisher Effect
(IFE), Recognizes the different types of PPP theory, Explains
the cover and uncovered interest parity, Differentiates between
PPP, IPR and IFE theories.
-
Group Work
(In Classroom)
Group Discussion on Case:
The case will be provided in the class.
Case will be
given in the
class
Assignments Assignment Problems in Reading Material
Assignment
Sheet will be
given in the
class
Conceptual
Exercises/
Application
Exercises/
Case Study
Exercise will be provided before the session.
Learning
Outcome
 Derivatives Pricing & Analysis; foreign exchange arithmetic,
foreign exchange swaps, forward contracts, financial futures &
financial swaps.
 Currency options fixed income analytic & interest rate options.
Sessions 5&6: Management of Translation &Transaction Exposure

5. Pre-session
Reading
Basic principal of FRM. Currency exchange, Volatility Concept.
Refer the
recommended
Books.
Classroom
Session
 Explains the meaning of exposure, Recognizes the different
types of exposure, States the tools and techniques of foreign
exchange risk management, Describes the translation methods,
Distinguishes between functional and reporting currency.
 Defines transaction exposure, Explains the measurement of
transaction exposure, States the risk management products,
Defines currency volatility over time.
-
Group Work
(In Classroom)
Group Discussion on Case:
The case will be provided in the class.
Case will be
given in the
class
Assignments Assignment Problems in Reading Material
Assignment
Sheet will be
given in the
class
Conceptual
Exercises/
Application
Exercises/
Case Study
Exercise will be provided before the session.
Learning
Outcome
 Inter-war instability, Bretton woods, fixed exchange rates,
fluctuating exchange rates Case for fixed or fluctuating
exchange rates. The changing nature of world money.
Sessions 7&8: Management of Economic and Operational Exposure
Pre-session
Reading
Operations of foreign exchange markets, modes & mechanism of
spot & forward exchange contracts.
Refer the
recommended
Books.
Classroom
Session
 Measures and manage the economic exposure, Manages the
exchange risk, Defines hedging, States the corporate philosophy
of exposure.
-
Group Work
(In Classroom)
Group Discussion on Case:
The case will be provided in the class.
Case will be
given in the
class
Assignments Assignment Problems in Reading Material
Assignment
Sheet will be
given in the
class
Conceptual
Exercises/
Application
Exercises/
Case Study
Exercise will be provided before the session.
Learning
Outcome
 Foreign Exchange exposure; transaction & operating.
 Derivatives Pricing & Analysis; foreign exchange arithmetic,
foreign exchange swaps, forward contracts, financial futures &

6. financial swaps.
Session 9&10: Management of a Multinational Firm
Pre-session
Reading
Understand basic concept of Cost of Capital. Corporate Finance
concepts.
Refer the
recommended
Books.
Classroom
Session
Defines cost of capital for MNC vs. domestic firms, Explains the
optimal capital structure, Describes the cost of capital across
countries, States the practical framework of corporate financing
decisions.
Group Work
(In Classroom)
Group Discussion on Case:
The case will be provided in the class.
Case will be
given in the
class
Assignments Assignment Problems in Reading Material
Assignment
Sheet will be
given in the
class
Conceptual
Exercises/
Application
Exercises/
Case Study
Exercise will be provided before the session.
Learning
Outcome
 Capital Budgeting for international projects, international cash
management, international asset pricing theories, Financial
Aspects of International Negotiations. Cost of capital, Optimal
capital structure and WACC;
Session 11&12: Multinational Capital Budgeting
Pre-session
Reading
Basic Concept of Break Even level; capital budgeting;
Refer the
recommended
Books.
Classroom
Session
Defines multinational capital budgeting, States the challenges in
foreign investment analysis, Distinguishes project vs. parent cash
flow, Explains the methods of capital budgeting.
Group Work
(In Classroom)
Group Discussion on Case:
The case will be provided in the class.
Case will be
given in the
class
Assignments Assignment Problems in Reading Material
Assignment
Sheet will be
given in the
class
Conceptual
Exercises/
Application
Exercises/
Exercise will be provided before the session.

7. Case Study
Learning
Outcome
 International capital-flows & shocks.
 International debt problem - its origin, history & status.
 International liquidity & SDRs.
Session 13&14: Country Risk Analysis
Pre-session
Reading
Types of country risks, International Taxation
Refer the
recommended
Books.
Classroom
Session
 Defines country risk, Explains the nature of country risk
assessment, States the economic risk indicators, Recognizes the
various techniques to assess country risk, Explains the double
taxation relief provisions, Categorizes the different methods of
double taxation relief, Defines the special provisions relating to
avoidance of tax.
Group Work
(In Classroom)
Group Discussion on Case:
The case will be provided in the class.
Case will be
given in the
class
Assignments Assignment Problems in Reading Material
Assignment
Sheet will be
given in the
class
Conceptual
Exercises/
Application
Exercises/
Case Study
Exercise will be provided before the session.
Learning
Outcome
 Double Taxation.
 Various techniques of accessing country risks.
Session 15 &16: International Banking
Pre-session
Reading
 International regulation
 Risk management in foreign exchange trade.
Refer the
recommended
Books.
Classroom
Session
 Defines international banking, States the international debt
crisis, Explains subprime lending, Describes the international
regulation, Categories the macro prudential indicators, Explains
the risk management in foreign exchange trading.
Group Work
(In Classroom)
Group Discussion on Case:
The case will be provided in the class.
Case will be
given in the
class

8. Assignments Assignment Problems in Reading Material
Assignment
Sheet will be
given in the
class
Conceptual
Exercises/
Application
Exercises/
Case Study
Exercise will be provided before the session.
Learning
Outcome
 Foreign Exchange exposure; transaction & operating.
 Demand supply & elasticity in foreign exchange rate
determination.
Session 17 &18: Interest Rate and Currency Swaps
Pre-session
Reading
 Forward Contracts, Swap’s basic concept.
Refer the
recommended
Books.
Classroom
Session
 Defines interest rate and currency swaps, Explains the
conceptual view of swaps, States the problems with parallel and
back to back loans, Lists the terminology related to swaps.
Group Work
(In Classroom)
Group Discussion on Case:
The case will be provided in the class.
Case will be
given in the
class
Assignments Assignment Problems in Reading Material
Assignment
Sheet will be
given in the
class
Conceptual
Exercises/
Application
Exercises/
Case Study
Exercise will be provided before the session.
Learning
Outcome
 Operations of foreign exchange markets, modes & mechanism
of spot & forward exchange contracts.
 Exchange trading & position.
 Syndication, Swaps, Options, Offshore banking, International
Money, Capital & Foreign Exchange Markets with reference to
New York, London, Tokyo, Hong Kong & Singapore.
Session 19 &20: Global Vs. American Depository Receipt
Pre-session
Reading
 Fund Raising Activities, Different global markets instruments.
Find the
relevant
chapters from
the
recommended
books

9. Classroom
Session
 Defines ADR and GDR, State the types of ADR, Explains the
benefits of ADR, Describes the ramification of Indian ADRs,
Lists the benefits of GDR.
Group Work
(In Classroom)
Group Discussion on Case:
The case will be provided in the class.
Case will be
given in the
class
Assignments Assignment Problems in Reading Material
Assignment
Sheet will be
given in the
class
Conceptual
Exercises/
Application
Exercises/
Case Study
Exercise will be provided before the session.
Learning
Outcome
 Innovative International Financial Products, Socio-Political
Issues in Strategic International Financial Management (with
special reference to multi-national corporations)