MBA-FM01 : FINANCIAL DERIVATIVES

Objective The basic aim of course is to familiarize students with various types of financial derivatives used in financial markets to hedge the financial risks and to enable them to evaluate correctly the risks and suitability of these products. UNIT I Derivatives defined products participants & functions types of derivatives development of exchange traded derivatives global derivatives markets exchange trade Vs OTC Derivatives Derivatives market in India. UNIT II Options development of options markets call options put options organized options trading listing requirements contract size exercise prices expiration dates position & exercise limits exchanges on which options trade options traders. UNIT III Forward contracts Futures contracts structure of forward & futures markets development of futures markets organized futures trading futures exchanges Futures traders. UNIT IV Principles of Option pricing Put Call Parity relationship Option pricing models The Black Schools Model The Binomial model Principles of forward and future pricing the cost of carry model. UNIT V The impetus for Risk management benefits dealers & other participants managing market risk Delta Theta - Gamma Vega hedging value at risk derivatives in the organisation accounting and tax for derivatives avoiding derivative losses regulations.

Suggested Reading
1. 2. 3. 4. 5. John C.Hull, Options, Futures and other Derivatives, Pearson Education. Robert W.Kolb, Understanding Futures Markets, Prentice Hall India. Franklin R.Edwards, Futures and Options, Tata Mc Graw Hill. V.K.Bhalla, Financial Derivatives and risk Management, S.Chand. Chance, Introduction to derivatives and Risk Management, Thomson Learning

MBA-FM02: INTERNATIONAL FINANCIAL MANAGEMENT Objective: To provide students with a conceptual framework of how financial decisions are undertaken in a multinational company. UNIT I International financial management-international business and its modes, MNCs and their role, IFM and domestic financial management. UNIT II International flow of funds-BOP, equilibrium, disequilibrium and adjustment, different approaches to adjustment, capital account convertibility. UNIT III International monetary system-specie commodity standard, Gold standard, Bretton woods system of exchange rate, exchange rate regime since 1973, international liquidity, IMF and financial crisis. UNIT IV Exchange rate Mechanism- Quotations, types of exchange rates (nominal, real and effective), determination of ER in spot market, factors influencing exchange rate, determination of ER in forward market, theories of exchange rate behaviour. UNIT V Foreign exchange Market- Distinctive features, Major participants, spot and forward market. Forecasting exchange rates-need and techniques, forecast in a controlled exchange rate regime. SUGGESTED READING 1. Shapiro, A.C.: Multinational Financial Management, Wiley India. 2. Eitemen, D.K. etc.: Multinational Business Finance, Pearson Education. 3. Sharan, V.: International Financial Management, Phi. 4. Apte, P.G.: International Financial Management, Tata McGraw Hills. 5. Henning, C.N. etc.: International Financial Management, Tata McGraw Hills: International Edition.