FOREX Management and Currency Derivatives (Functional Electives International Business)

Paper Code: 
MBI- 622
Credits: 
4.0
Contact Hours: 
40.00
Max. Marks: 
100.00
Objective: 
  • The objective of this subject is to acquaint the students with the basic knowledge of Foreign Exchange  Market
9.00
Unit I: 
Foreign Exchange Market

Organization – Spot Vs Forward Markets, Bid and Ask rates, Interbank Quotations, International Market Quotations, Cross Rates, Merchant Rates, FEDAI Regulations, Role of RBI

8.00
Unit II: 
Exchange Rates

Exchange rate systems, Gold Standard, Fixed Vs Floating Exchange Rate systems, Determinants of Exchange Rates, Exchange Controls.

8.00
Unit III: 
Foreign Exchange Transactions

Purchase and Sale transactions, Spot Vs Forward transactions, Forward Margins, Interbank Deals, Cover deals, Trading, Swap deals, Arbitrage Operations.

8.00
Unit IV: 
Ready and Forward Exchange Rates

Principle types of Ready Merchant rates, Ready rates based on cross rates, Forward exchange contracts, Execution of Forward contracts, cancellation and Extensions, Dealing position, Exchange position, Cash position.

Unit V: 
Currency Derivatives

Currency Forwards, Currency Futures, Currency Options, Exchange traded transactions, Financial Swaps, Forward Rate agreements, Interest Rate Options, Hedging strategies using currency futures and swaps.

Essential Readings: 
  • Alan C Shapiro : Multinational Financial Management, Prentice Hall, New Delhi
  • Francis Cherunilam : International Economics, Tata Mc Graw Hill Pub Ltd, New Delhi
References: 
  1. Ian H Giddy: Global Financial Markets, AITBS Publishers and Distributors, New Delhi
  2. C Jeevanandam, Foreign Exchange: Practice, Concepts, Sultan Chand & Sons, New Delhi
  3. Vijayabhaskar P and Mahapatra B., Derivatives Simplified, Respose Books, Sage Publications, New Delhi