About the Book

The book, International Financial Management aims to explore the theoretical framework of international financial concepts and systems. It contains a number of solved problems to highlight the practical aspects of international finance as well as diagrams and graphs to facilitate better understanding of the concepts.
Case studies are incorporated in every chapter to familiarize readers with real world problems and ways to handle them. The simple and eloquent language of the book provides deeper insight of international financial concepts with practical applications as the book contains everything about international financial management from minor to major level. Coverage of recent issues in international finance is the unique feature of the book. Exercises along with solutions have been included at the end of each chapter for sufficient practice to enhance and boost the understanding level of readers.

About the Author

Prof. Anuj Verma is currently working as Professor of Finance at ERA Business School, New Delhi. A Doctorate in Finance with an MBA and Chartered Financial Analyst, Prof. Verma has around 15 years’ experience in teaching students. He has expertise in the areas of capital market, financial analysis, and international finance. An avid reader and tracker of capital market, Prof. Verma has conducted numerous workshops in different fields like e-finance, derivatives, mutual funds, etc. He has also developed interesting capital market games. Prof. Anuj Verma has developed interesting modules like ‘Finance for Non-Finance Managers’. These modules have benefited numerous corporate executives from companies like NHPC, Power Finance Corporation, Druk Green Power Corporation (Bhutan), etc. Prof. Verma has also traveled to London Stock Exchange and Singapore Stock Exchange and has conducted training programs for international students. The proficient teams at Kogent Learning Solutions Inc. and Dreamtech Press have seized the market of management textbooks, bringing excellent content in engineering and technical education to the fore. The teams at Kogent Learning Solutions, Inc. and Dreamtech Press are committed to providing excellence in quality of content by judiciously analyzing the needs of its readers and ensuring dedication of its authors and editors in catering to these needs.

Table of Contents:
Chapter 1: An Overview of International Financial Management 1.1 Introduction 1.2 Concept of International Financial Management 1.3 International Trade 1.4 The Finance Function of an MNC 1.5 Recent Developments in the International Financial Environment 1.6 Challenges in International Financial Management 1.7 India as a Global Economy - International Trade Relations Chapter 2: International Monetary System 2.1 Introduction 2.2 International Monetary System 2.3 Exchange Rate Regime 2.4 International Financial Institutions (IFIs) 2.5 International Liquidity (IL) and Special Drawing Rights (SDRs) 2.6 Economic and Monetary Union (EMU) 2.7 International Banking Services Chapter 3: International Financial Markets 3.1 Introduction 3.2 Concept of International Financial Market 3.3 Types of International Financial Markets 3.4 Economic Impact of Off-shore and Euro markets Chapter 4: Balance of Payments 4.1 Introduction 4.2 Concept of Balance of Payments 4.3 Components of the Balance of Payments 4.4 Accounting Principles of BOP 4.5 Deficit and Surplus in BOP 4.6 Valuation and Timing of Balance of Payments 4.7 Importance of BOP 4.8 Limitations of BOP 4.9 Adjustment of demand and supply of foreign currency 4.10 Link between national economy and international activities Chapter 5: Theories and Policies of International Trade 5.1 Introduction 5.2 FOREX Market 5.3 Structure of FOREX Market 5.4 Types of Transactions and Settlement Dates of FOREX Market 5.5 Exchange Rate Quotations 5.6 Spot Rate Quotations 5.7 Mechanism of Inter-bank Trading 5.8 Arbitrage in Spot Market 5.9 Forward Quotations 5.10 Forecasting Foreign Exchange Rate 5.11 Exchange Rate Determination 5.12 Indian FOREX Market 5.13 Summary Chapter 6: Derivatives - A Major Innovation in Financial Markets 6.1 Introduction 6.2 Definition of Derivatives 6.3 Reasons for a Booming Derivatives Market 6.4 Types of Derivatives 6.5 Derivatives in India Chapter 7: Currency Futures Contracts 7.1 Introduction 7.2 Currency Futures Contracts 7.3 Futures Contracts Trading Process 7.4 Futures Price Quotation 7.5 Hedging and Speculation in Currency Futures Contracts Chapter 8: Currency Options 8.1 Introduction 8.2 Concept of Currency Options 8.3 Options Terminology 8.4 Option Price Quotations 8.5 Elementary Option Strategies 8.6 Hedging in options 8.7 Valuation of Options 8.8 Futures Options 8.9 Currency Options in India Chapter 9: Interest Rate Parity, Futures, Options and Swaps 9.1 Introduction 9.2 Interest Rate in the Global Market 9.3 Interest Rate Parity 9.4 Interest Rate Futures 9.5 Interest Rate Option 9.6 Interest Rate Swaps Chapter 10: Foreign Exchange Risk Management 10.1 Introduction 10.2 Overview of FOREX Risk 10.3 Definition of Exposure 10.4 Types of Exposure 10.5 Classification of Foreign Exchange Risk 10.6 Techniques to Manage Foreign Exchange Risk 10.7 Corporate Internal Hedging Strategies 10.8 Exchange Risk Management Process 10.9 Measurement of Exchange Risk Chapter 11: Measuring and Managing FOREX Exposure 11.1 Introduction 11.2 Measurement of Foreign Exchange Exposure 11.3 Management of FOREX Exposure Chapter 12: Short-term International Financing 12.1 Introduction 12.2 Short-term International Financing and its Sources 12.3 Internal Financing by MNCs 12.4 Determination of the Effective Financing Rate 12.5 Criteria for Foreign Financing 12.6 Management of Surplus Cash 12.7 Centralized vs. Decentralized Cash Management 12.8 Cash Transmission Chapter 13: Long-term International Financing 13.1 Introduction 13.2 Understanding Long-term International Financing 13.3 Sourcing Equity Globally 13.4 Factors Affecting International Equity Returns 13.5 Advantages of Sourcing Equity Globally 13.6 Sourcing Debt Globally Chapter 14: Foreign Investments 14.1 Introduction 14.2 Concept of Foreign Investment 14.3 Need for Foreign Investments 14.4 Alternative Ways of Foreign Investments 14.5 FDI and its Types 14.6 Theories of FDI 14.7 International Portfolio Investments 14.8 Recent Developments in Indian Foreign Investments Chapter 15: Multinational Capital Budgeting and Project Appraisals 15.1 Introduction 15.2 Understanding Multinational Capital Budgeting 15.3 Concepts of Multinational Project Appraisals 15.4 Subsidiary vs. Parent Perspective of Multinational Capital Budgeting 15.5 Factors Affecting Multinational Capital Budgeting 15.6 Different Approaches of Multinational Capital Budgeting 15.7 Risks Associated with International Projects Chapter 16: International Accounting Standards 16.1 Introduction 16.2 Concept of International Accounting Standards 16.3 National and International Accounting Standards 16.4 Consolidation of MNC Accounts and Currency Translation Chapter 17: International Taxation 17.1 Introduction 17.2 Concept of International Taxation 17.3 Meaning and Natures of Taxes 17.4 Objectives of International Taxation 17.5 Central Principles of International Taxation 17.6 Double Taxation 17.7 Double Taxation Relief Chapter 18: International Banking 18.1 Introduction 18.2 Internationalization of Banks 18.3 Financial Intermediation in International Banking 18.4 Rate of Interest 18.5 Risk Management in the International Banking System 18.6 Basel and Risk Management 18.7 Indicators for the Stability of the Banking System Chapter 19: Country Risk Analysis 19.1 Introduction 19.2 Concept of Country Risk Analysis 19.3 Country Risk Factors 19.4 Incorporating the Political Risk in Capital Budgeting Techniques 19.5 Techniques of Country Risk Analysis and Country Risk Rating 19.6 Sources of Data for Country Risk 19.7 Managing the Country Risk 19.8 Country Risk Analysis in India