International Financial Management

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