International Finance

The course deals with how financial management decisions are taken in multinational context. This course covers multinational enterprises and multinational financial management, market for foreign exchange, fo rward and future exchange markets, balance of payment, and international parity conditions. It also covers management of foreign exchange exposure and risk, international trade instruments and institutions, and different aspects of foreign direct investment. Learning Outcome On completion of this course the students will be able to: Understand the concept of international finance and explain the reasons for growing multinational corporations and international businesses; Explain how the foreign exchange market, and forward and future exchange markets functions; Describe the factors affecting the exchange rates and exchange rate system; Describe the principles and accounting of the balance of payment with specific reference to the balance of payment of Nepal; Understand international arbitrage and interest rate parity theories and their application in the determination of exchange rates; Derive and interpret the purchasing power parity; Manage foreign exchange exposure and risk; Discuss the role of instrument and institutions in international trade; Discuss the role of Foreign Direct investment and foreign portfolio management.

This course aims to provide students an understanding of financial management in an international setting. The course also enhances the students the skills required to manage the financial risks of firm operating in the international environment. Course Description The course deals with how financial management decisions are taken in multinational context. This course covers multinational enterprises and multinational financial management, market for foreign exchange, fo rward and future exchange markets, balance of payment, and international parity conditions. It also covers management of foreign exchange exposure and risk, international trade instruments and institutions, and different aspects of foreign direct investment. Learning Outcome On completion of this course the students will be able to: Understand the concept of international finance and explain the reasons for growing multinational corporations and international businesses; Explain how the foreign exchange market, and forward and future exchange markets functions; Describe the factors affecting the exchange rates and exchange rate system; Describe the principles and accounting of the balance of payment with specific reference to the balance of payment of Nepal; Understand international arbitrage and interest rate parity theories and their application in the determination of exchange rates; Derive and interpret the purchasing power parity; Manage foreign exchange exposure and risk; Discuss the role of instrument and institutions in international trade; Discuss the role of Foreign Direct investment and foreign portfolio management.