SYLLABUS

THIRD SEMESTER
MFC

3.1 FINANCIAL DERIVATIVES AND RISK MANAGEMENT

UNIT-I

Risk: Definition, types of Risk, Process of Risk Management, The tools of risk Management. Derivatives, Definition and Evolution of Derivatives, Derivatives Markets, Types of Derivatives, Derivatives markets in India.

UNIT-II

Futures Market: Function of futures market, speculation and hedging, Price, spread and hedging, futures and price stabilization, test of efficiency, Financial futures as a mechanism of risk transference, spot and futures prices.

UNIT-III

Financial Futures: Interest Rate futures, Currency Futures (Foreign Exchange) Stock index futures and Financial Futures in India. Risk Management with Futures, Cost of Carry Model, Index Arbitrage, Purchasing Power Party Theorem.

UNIT-IV

Options: Terminology and Methodology of Trading, types of Options, Option Pricing, Swaps, types of Swaps, Swaps Valuation, and other Derivatives, Speculation with Options, Risk Management with Options & Futures.

UNIT-V

Regulator Framework of Futures & Derivatives: Regulatory bodies in major International Markets, Regulatory framework in India, Regulatory Instruments and needs, Accounting for Derivative Transactions. References: 1. John C. Hull : Options, Futures & other derivatives, Pearsons 2. T.V Somanathan : Derivatives, Tata McGraw Hill. 3. Redhead: Financial Derivatives, Prentice Hall. 4. Lasys Walter, Iexinton : Speculation, Hedg & Commodity Price Forecasting. 5. Hill J. and T. Schneelesis : Risk Reduction, Potential of Financial Futures. 6. Jarrow and Rudd, Irwin: Optional Pricing, Homewood, Irwin. 7. Dubofsky and miller, Derivatives: Valuation and Risk Management, Oxford University Press, New York. 8. Watsham. T. Futures and Options in Risk management, Thompson, Asia. 9. Wilmott. P. The Theory and Practice of Financial Engineering, John Wily and Sons, England. 10. Gupta, Financial Derivatives, PHI 11. Kumar, Financial Derivatives, PHI 12. Cox, J. and Rubinstein M. “Options Market” PHI. 13. Tucker, A.L. “Financial Futures, Options and Swaps” West Publishing Co, St Paul Minn.

MFC 3.2 INTERNATIONAL FINANCE

UNIT-I

Internationals Monetary and Financial System: Importance of Internationals Finance; Bretton Woods Conference and afterwards, IMF and the World Bank; European Monetary System. Balance of Payment and International Linkages: Components; International flow of Goods, Services and Capital ; Coping with current account deficit.

UNIT-II

Foreign Exchange Markets: Determining Exchange Rates; Fixed and Flexible Exchange Rate System; Exchange Rate Theories; Participants in the Foreign Exchange Markets; Spot Markets; Exchange Rate Quotes; LERMS; Factors affecting Exchange Rates-spot rates, forward exchange rates, forward exchange contracts.

UNIT-III

Foreign Exchange Risk: Transaction Exposure, Translation Exposure and Economic Exposure; Management of Exposures-internal techniques, netting, marketing, leading and lagging, Pricing Policy, Asset and liability Management and techniques. Management of Risk in Foreign Exchange Markets: Forex Derivatives- Swaps, Futures and Options and Forward Contracts.

UNIT-IV

International Capital and Money Market Instruments; GDRs, ADRs, Eurobonds, Euro loans, Repos, C.P.s, Floating Right Instruments, Loan Syndication and Euro Deposits.

UNIT-V

Multilateral Financial Institutions: Role of IMF, IBRD and other Development Banks; International Investors and Foreign Investment Institutions. Current Developments: International Indebtedness; Capital Account Convertibility- Pros and Cons; Innovations in International Financial Instruments. Reference: 1. Apte, P.G. International Financial Management, Tata McGraw hill, New Delhi, 2. Buckley, Adrian; multinational Finance, Prentice Hall, New Delhi. 3. Eitman D.K. and A.I Stonehill, Eitman, Multinational Business Cash Finance, Addison Wesley, New York. 4. Sharan V. International financial Management PHI, New Delhi. 5. Clark, E, International Financial, Thompson. 6. Henning C.N.W Piggott and W.H Scott: International Financial Management, McGraw Hill, International Edition. 7. Levi, Maurice D: International Finance, McGraw Hill, International Edition. 8. Rodriqufe R.M. and E.E. Carter: International Financial Management, Prentice Hall, International Edition. 9. Shaprio Alan C: Multinational Financial Management, Prentice Hall New Delhi. 10. Yadav S, P. K. Jain and Max P. Foreign Exchange Markets, Macmillan, New Delhi. 11. Zeneff D. and J Zwick: International Financial Management, Prentice Hall International Edition. 12. O’ Connor DJ, Bueso AT: International Dimensions of Financial Management; Macmillan, New Delhi. 13. Pilbeam Keith: International Financial Macmillan Press, Hong Kong. 14. Melvin “International Money and financial Money and Finance “Pearson, New Delhi.

MFC3.3 IT FOR MANAGERS

UNIT-I

Modern Information Technology: Basic idea of Local Area Networks (LAN) and Wide Area Networks (WAN), E-mail, Concept and evolution of Internet, access devices, concept of a World Wide Web and internet browsing.

UNIT-II

Introduction to E-Commerce: Meaning and Concept; Electronic commerce versus traditional commerce: E-commerce and E-business; Business applications of e-commerce; Need for e- commerce, E-commerce models, Electronic Payment Systems: Special features required in payment systems for e-cheques, credit cards, smart cards, electronic purses and debit cards; Security in e-commerce.

UNIT-III

Financial Application of Spread Sheets: working with EXCEL – formatting, Financial functions, chart features, working with graphics in Excel. SPSS Applications.

UNIT-IV

Introduction to Accounting Packages: Company Creation, Group and Ledger Creation, Voucher Entry, Maintenance of accounting books and final accounts, financial reports generation. Practical Knowledge on Tally Package.

UNIT-V

Management Information System: 1. Diennes, Sheila S: Microsoft Office, Professional for Windows 95, Instance reference, BPB Publication, Delhi 2. Mansfield, Ron: The Compact guide to Microsoft office, BPB Publication, Delhi. 3. Norton, Peter: Working with IBM-PC, BPB Publication, Delhi. 4. O’ Brian, J.A: Management Information Systems, Tata McGraw Hill, New Delhi. 5. Ullman, JO: principles of Database Systems, Galgotia Publication New Delhi. 6. Mudrick, Rose and Clapet, Information System for Modern Management, PHI.

MFC3.4 STRATEGIC MANAGEMENT

UNIT-I

Concept of Strategy: Defining strategy, levels at which strategy operates; Approaches to strategic Decision making; Mission and purpose, objectives and goals; Functional level strategies. Environmental Analysis and Diagnosis: Concept of environment and its components; Environment scanning and appraisal; Organisational appraisal; Strategic advantage analysis and diagnosis; SWOT analysis.

UNIT-II

Strategy Formulation and Choice of Alternatives: Strategies- stability, growth, modernization, diversification, integration; Merger, take-over and joint strategies; Turnaround, divestment and liquidation strategies; Factors affecting strategic choice; Generic competitive strategies-cost leadership, differentiation focus, value chain analysis, bench marking.

UNIT-III

Functional Strategies: Marketing, production/operations and R&D Plans policies. Personnel and financial plans and policies.

UNIT-IV

Strategy Implementation: Inter-Relationship between formulation and implementation; Issues in strategy implementation; Resource allocation. Strategy and Structure: Structural: considerations, structures for strategies Organisational design and change.

UNIT-V

Strategy Evaluation: Overview of strategic evaluation; Strategic control; Techniques of strategic evaluation; and control, Problem in management and evaluation, Global Issues in Strategic Management, References: 1. David, “Strategic Management” PHI New Delhi. 2. Bhattachary, S.K. and N.Ventramin: Managing Business Enterprises: Strategies, Structure and System, Vikas Publishing House, New Delhi. 3. Budhiraja, S.B and M. B. Athreya: Cases in Strategic Management, Tata McGraw Hill, New Delhi. 4. Christensen, C. Roland, Kenneth Andrews. Joseph L. Bower, Rochard G. Hamermesh, Michael Efarter Business Policy: Text and Cases, Richard D. Irwin, Inc, Homewood. 5. Coulter, Mary K: Strategic Management in Action, Prentice Hall New Jersey. 6. David, Fred R: Strategic Management Prentice Hall, New Jersey. 7. Glueck, William F. and Lawrence R. Jauch: Business Policy and Strategic Management, McGraw Hill. International Edition. 8. H. Igor, ansoff: Implanting Strategic Management, Prentice Hall. New Jersey. 9. Kazmi, Azhar: Business Policy, Tata McGraw Hill, Delhi. 10. Michael, E Porter: The Competitive Advantage of Nations, Macmillan, New Delhi. 11. Mintzberg henry and James Brian Quinn: The Strategy Process, PH, New Jersey. 12. Newmann Willaiam h. and James P. Logan: Strategy, Policy and central Management, South Westem Publishing Co. Clncinnati, Ohio. 13. Sharma R.A.: Strategic Management The India Companies, Deep and Deep Publications, New Delhi 14. Srinivasan: Strategic Management- The Indian Context-PHI. 15. Aswathappa. K. and Reddy G.S., Business Environment for Strategic Management, Himalaya Publishing House. 16. Gosh P.K. Strategic Management and Business Policy, Sultan Chand. 17. Gupta, Golakata and Srinivasan, Business Policy and Strategic Management, PHI

MFC3.5 TAX PLANNING AND MANAGEMENT

UNIT-I

Corporate Tax in India, Assessment of Corporate Assessment Concept of Tax Planning. Tax Management.

UNIT-II

MAT, TDS, Advance Payment Tax, Self assessment, Tax Planning as Residential Status, Specific Management decision, Make or Buy, Lease or Own, retain or replace, Shut down or Continue Double taxation relief.

UNIT-III

Tax Planning, With reference to: Depreciation, Capital gain, House Property, Amalgamation & Merger.

UNIT-IV

Tax Planning for settling up new undertaking: Basis of Location, Basis of nature of Business. Foreign Collaboration and Tax Planning: Technician fees, Royalties.

UNIT-V

VAT, Rationale, Procedure of Calculation, Securities Transaction Tax, Banking Transaction Tax, Fringe benefit Tax, Service Tax. References: 1. R.N. Lakhotia and Subash Lakhotia, “Tax Planning for non-resident Indians” Vision books (P) ltd. 2. R.N.Lakhotia, “Corporate Tax Planning”, Vision books (P) ltd. 3. Singhania, V.K.: Direct Taxes: Law and Practice, Taxman’s Publication. Delhi. 4. Bhagabati Prasad, “Direct Tax Laws & Practices”

MFC3.6 MARKETING OF SERVICES

UNIT-I

Introduction to Services: Meaning, definition, features and classification of services, Products Vs. Services; Economic development, Evolution & Growth of Service sector in India; Services Marketing Elements; Services Marketing Triangle; Strategic Planning; Factors stimulating the transformation of service economy.

UNIT-II

Services Marketing Planning: Service Marketing Research; Service Marketing Planning, Market Segmentation (STP) and Positioning; Consumer Behavior, Customer Expectations and Perception; Managing Demand of Services: Service Encounter Management; Strategic Service Marketing and developing Service Competitive Advantage (SCA).

UNIT-III

Services Marketing Strategies: Gap Model and Service Quality Management; Service Expectations and Service Product Planning, Blue Printing and Interactive marketing : Pricing of Service Location and Placement of Services; internal and External Marketing.

UNIT-IV

Customer Relationship Management: Managing people, process and Physical Evidence; Basics of Customer Relationship Management-Understanding Customers Expectations, Perceptions and Building Customers Relationship. Service Recovery and Managing Customer Waiting Lines and Reservation.

UNIT-V

Marketing of services in India: Financial services, Tourism services, Education and Professional Services. Health services and I.T. & Communication services. References: 1. Lovelock, C. “Services Marketing,” Pearson Education Inc, New Delhi. 2. Zethimal, V.A. and Bitner, M.J. “Services Marketing”’ Tata McGraw Hill, New Delhi. 3. Shajahan, S, “Services Marketing”’ Himalayan Publishing House, New Delhi. 4. Rao, R. “Services Marketing” Pearson Education Inc, New Delhi. 5. Jha, S.M. “Service Marketing” Himalayan Publishing House. New Delhi. 6. Shanker Ravi, “Services Marketing” Excell Book. New Delhi. 7. Apte, G “Services marketing”, oxford Publication, New Delhi. 8. Dyche, Jill, The CRM Hand Book” Pearson Education Inc, New Delhi. 9. Mukharjee, Kaushik, “Customer Relationship Management”, PHI Publication, New Delhi. 10. Balaji, B. “Service Marketing & Management”, S Chand & Company Ltd, New Delhi. 11. Mohamed, H.P. “Customer Relationship Management”, Vikas Publishing House, New Delhi. 12. Avbdhani, V, “Marketing of Financial Service”’ Himalayan Publishing House, New Delhi. 13. Jha, S.M, “Social marketing”, Himalayan Publishing House. New Delhi.

MFC3.7 CORPORATE RESTRUCTURING AND FINANCIAL ENGINEERING

UNIT-I

Introduction: Concept, rational, types and motives of merger and Acquisition, Theories of merger, sources of value creation in merger & acquisition, Emerging trends and challenges in M & A market.

UNIT-II

Understanding Target Companies: Valuation: Different methods of valuation of Target co. & the firm. Fixation of exchange ratio. Measurement of cost & gains from M & A Financing m & A, methods and risk.

UNIT- III

Corporate Restructuring & Strategic alliances : Spin offs, Equity curve outs, stock splits, joint venture, share repurchase, LBO, MBO, International merger & restructuring.

UNIT-IV

Bid Strategies and Tactics: Defenses against take over, Evaluating merger performance, Post merger activities, Regulations of merger & acquisitions, Role of institutional players in M & A.

UNIT-V

Financial Engineering: Concept, Scope & features driving forces, financial engineers – conceptual & physical tools, innovation in debt & equity market, hybrid Securities, Future trends & challenges to Financial Engineering. References: The students are directed to keep in touch with the recent developments in the relevant areas by referring the journals, news papers and magazines. In addition, they should refer to the following books. 1. Weston, Size & Johnson- Takeover, restructuring and corporate Governance “Pearson education. 2. S. Shiva Ramu- Corporate growth through merger and acquisition response books. 3. Krekel, vender & Wouterse “Merger: An European approach to Techniques “business books limited. 4. Short Robert: Business Merger” Prentice hall Inc. 5. Mason, Merton, Period & Tufano” cases in financial engineering: Applied studies in financial Innovation” Prentice Hall. 6. Weston J. Fred “The role of merger in the growth of large firms” Green wood press. 7. P.S Sundarsanam “The essence of merger & acquisitions “PHI. 8. Buono & James “The human side of M & A” Jossey Bass publishers. 9. Verma J.C. “Bharat’s corporate merger & takeover” Bharat publishing House. 10. Hunt, Less, Grumbler & Viviars “Acquisitions- The Human Factor” London Business school. 11. Gaugham P.A. “Merger of Acquisition” Harper Collins. 12. Wright, Thompson, Chaplin & Robbie” Buy-ins and Buy onts” Graham & Trot man. 13. Weston, Chung & Hoag “Merger, restructuring & corporate control” PHI. 14. Marshall & Bansal “Financial engineering: A complete guide to financial innovation” PHI. 15. Sudi Sudarsanam “Creating value from merger and acquisitions: The challenger” person education.