The book continues the tradition of providing a blend of sound theoretical knowledge of foreign exchange economics with practical and procedural aspects of banks and other institutions connected with foreign exchange. Each topic is comprehensively dealt with, looking at it from every angle, viz., the conceptual framework, exchange control regulations, rules of FEDAI and the International Chamber of Commerce, and procedures of banks. It presents in a cogent and understandable manner materials that lie scattered. The book is designed to meet the requirements of post-graduate courses in commerce and economics and MBA for papers such as ‘Foreign Exchange Risk’, ‘Foreign Exchange Management’ and ‘International Financial Management’. Practical questions that appeared in professional courses of Chartered Accountants, Cost and Management Accountants and Chartered Secretaries and MBA courses have been included in appropriate chapters with full solutions. To encourage student to attempt on his/her own the solutions are provided after the set of questions and not after each question.
Section A: Framework of Foreign Exchange
1. Introduction
2. Foreign Exchange Regulations
3. Balance of Payments
4. International Monetary Systems
5. Exchange Rate Determination
6. International Monetary Fund
Section B: Foreign Exchange Markets and Deals
7. Foreign Exchange Market
8. Forward Exchange Deals
9. Merchant Rates — Ready
10. Merchant Rates — Forward
11. Merchant Rates — Cross Currency
12. Execution of Forward Contract
13. Exchange Management by Banks
Section C: Derivatives and Risk Management
14. Currency Derivatives
15. Currency Futures
16. Currency Options
17. Corporate Policy on Exposure and Risk
18. Transaction Exposure
19. Accounting Foreign Currency Transactions
20. Translation Exposure
21. Economic Exposure
22. Interest Rate Risk
23. Financial Swaps
Section D: Foreign Trade Procedures and Documents
24. International Trade Procedures
25. Letter of Credit
26. International Trade Documents
27. Bank Finance for Exports
Section E: External Sources of Funds
28. Non-resident Deposits and Investments
29. International Financial Markets
30. Raising Debt Abroad
31. Raising Equity Abroad
32. International Financial Institutions
Section F: International Financial Management
33. Spectrum of International Financial Management
34. Country Risk Analysis
35. Foreign Direct Investment
36. International Portfolio Investment
37. International Capital Budgeting
38. Capital Structure and Cost of Capital
39. Working Capital Management
40. Funds Positioning and Tax Management