International Financial Management: Upasana Diwan August 6,2013

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International Financial Management

Upasana Diwan August 6,2013

Who invented this symbol?


Dr. D. Udaya Kumar is an Assistant Professor in the department of design at IIT-Guwahati. The symbol created by Kumar is an amalgam of the Devanagari Ra and the Roman capital R without the stem

Think Tank
In what contexts is International Business transactions different from Domestic Business transactions?

FM and IFM
Multiple Currencies Richer menu of options to choose from Wider menu of options to park surplus funds Exchange Risk and Political Risk Different accounting practices, standards and tax laws Longer Distance and Time involved in International transactions

3D
The three major dimensions that distinguish FM and IFM are: - Foreign Exchange and Political Risk - Expanded Opportunity Set - Market Imperfections

Result
Complexity in Decision Making

Definition
IFM deals with the financial decisions taken in the area of International Business

Scope of IFM
Foreign Exchange Market Exchange Rate Determination Exchange Rate Risk and its Management MNCs Investment Decision Financing and Working Capital Decisions International Accounting

MNC and Agency Problem


When managers of subsidiaries take decisions which will not collide with the objectives of the parent MNC.

International Business Methods


Licensing Franchising Joint Ventures Establishing new foreign subsidiaries Management Contracts

Assignment
FDI is an important avenue through which investment takes place. Analyze the FDI trends of Indian firms. What conclusions can you draw with respect to the FDI movement during the last 5 years.

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