International strategic Finance [FT 404F] MBA - IV Sem. Syllabus for DAVV Indore Affiliated Institutions

DEVI AHILYA VISHWAVIDYALAYA, INDORE

MBA (Full-Time) Financial Management 
 Fourh-4th-IV Semester Curriculum/ Syllabus

International strategic Finance Syllabus

Financial Management   - International strategic Finance  [FT 404F]

Course Contents

1.  An overview of risk management - Investors and risk management. the profitable side of  risk management;  Risk  management  process -  risk models;  Derivative  -  Hedging Currency Risk , Hedging Risk through Forward Contracts. Indian Derivatives Market.  

2.  Interest rate Swaps - rationale, liability and asset based interest rate swaps, pricing ol swaps, forwards and options on swaps.

3.  Creating  value  with  risk management-  financial  distress and  investment,  risks in banking- credit risk, foreign exchange risk, political risk and country risk, liquidity risk

4.   Financial  Engineering;  Construction ol  option  strategies in  various market  situations and their pay off; Betting on a large price decrease, betting on a small price increase

5.  Option Market: Types of Options, Uses of Options, Payoffs from Options, Trading Strategies, Involving Options Bull-Bear, Butter Fly, Calendar and Diagonal Spread, Straddles, Strip and Straps, Options Valuation and Pricing.  Factors Determining Option Price. Black Scholes Models. Concept of Delta, Theta, Gamma Vega, Exchange Traded Option- Stock, Option, Foreign Currency Option, Over the Counter Exchange Option, Index Options, Put Call Parity. 

6.  Exotic options: Compound, binary, barrier and Asian options, options involving several assets. Swaps Transactions: Interest rate swaps, currency  swaps, commodity swaps and equity swaps; Pricing and valuation of swaps. credit default swaps.  

7.  Future  Contracts:  Introduction  to  Futures  Markets,  Future  Contract  and  Future Trading,  Specification  of  the  Future  Contract,  Newspaper  Quotes,  Hedging  using Futures, Index Futures. Basics of Stock Index Future, Interest Rate Futures, Foreign Exchange  and  Currency Future,  Mechanism  of  Future,  Contracts,  Operations of Margin,  Convergence  Clearing  Process,  Clearing  house  and  Clearing  Margins, Hedging, Difference between Forward and Future contracts. 

TEXT BOOKS

• Hull. J. C Options Futures and Other Derivatives 7ed,2009 PHI New Delhi 
• Varma, Jayanth,Derivatives and Risk Management1eTataMcgrawHill
• Stulz    Risk management and Derivatives,1^st ,2008 Cengage Learning
• Parasuraman Fundamentals Of Financial Derivatives, 2nd Ed,Wiley

 Reference Book

• Marshal& Bansal,Financial Engineering,2010, PHI New Delhi
• Bhalla. V. K. Financial Derivatives: Risk Management: S. Chand & Company
• Chance   Derivatives and Risk Management Basics    1^st  2008 Cengage Learning
• Dorfman,Introduction To Risk Management, PHI New Delhi
• Ashthana, Financial Risk Management, 2010 Himalaya Pub.House
• Johnson Introduction toDerivatives - Options, Futures, and Swaps,Oxford Press

Course Objective

The objectives of this course are to explain to the student the risk return tradeoff and manage financial risk through the use of various derivatives and to make them understand operations of derivatives market.  

Examination Scheme:

Students shall be evaluated on two components , internal and end semester examination. Internal component shall be of 20 marks based on continuous evaluation .The Semester Examination will be worth 80 marks, it will have two Section, A and B. Section A, worth 60 marks will comprise of seven theory questions out of which a student will be required to attempt any four questions. Section B worth 20 marks will contain Cases.