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Foreign Exchange & Risk Management (FM04)

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This book is designed to meet the needs of master of business administration students studying for the very first time in their curriculum. Thus complexity of the matter has been avoided with a view that complete course content has to be completed by the student in limited time period. The subject matter has been presented in a lucid, comprehensive and systematic manner which is easy to understand and also develops writing ability for students to score good marks in upcoming examination. This book includes all types of questions according to new pattern of university. Course content has been divided into topic wise and in chapter wise form according to curriculum framed by Dr. A.P.J. Abdul Kalam Technical University, Lucknow. This book includes unsolved papers of last years and sample paper. We hope that this book will be successful in its objectives and will receive appreciation from students and teachers alike.

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SKU: KMBN-FM04 Categories: , ,
ISBN 978-93-88783-15-2
Publishers R. Narain & Co.
Author Dr. Beena Agarwal
Binding Paperback
Pages  160
Subject Foreign Exchange & Risk Management

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Weight 200 g

Table of Content

UNIT I: Foreign Exchange and Foreign Trade, Exchange Rate, Foreign Exchange as stock, Balance of Payments, Balance of Payments accounting, Components of Balance of Payments; Current Account, Capital Account, Official Reserve Accounts, Debit and Credits Entries, International Exchange Systems; Fixed and Floating Exchange rate system. Exchange Rate System prior to IMF; Gold currency standard, Gold bullion standard, Gold exchange standard, Exchange Rate System under IMF: Bretton woods system, The Smithsonian Agreement, The Flexible Exchange Rate Regime.
UNIT II : Convertibility of rupee; Current account convertibility, Capital Account Convertibility; Theories of Foreign exchange rate: Purchasing power parity (PPP), International Fisher Effect (IFE), Interest Rate Parity (IRP); Administration of Foreign Exchange; Authorized persons, Authorized dealers, Authorized Money Changers; Foreign Currency Accounts: Nostro Account, Vostro Account and Loro Account in foreign transactions.
UNIT III : Foreign Exchange Transactions; Purchase and sale transactions; Exchange quotations: Direct and Indirect Quotations, Two way Quotation; Spot and Forward Transactions: Forward margin, Factors Determining forward margin; Merchant Rates: Basis of Merchant Rates, Types of buying and Selling rates, Ready rates based on cross rates; Forward exchange contract: Fixed and option forward contracts, Calculation of fixed and option forward rates; Inter Bank Deals; Execution of forward Contracts.
UNIT IV : Exchange Dealings: Dealing position- Exchange position, Cash Position; Accounting and Reporting: Mirror account, Value date, Exchange profit and loss, R returns; Forex Risk Management: Risk in Forex Dealing, Measure of Value at Risk; Foreign Exchange markets; Settlement of Transactions: Swift, Chips, Chaps, Fed wire.
Unit V : Exchange Risk: Exchange exposure and exchange risk; Transaction Exposure, Managing Transaction exposure: External Hedge-Forward contract hedge, Money market hedge, hedging with futures and options, Internal Hedge; Translation exposure, Methods of translation, managing translation exposure; Economic exposure, managing economic exposure; Interest rate risk.


Salient features include:

  1. Comprehensive coverage of theoretical aspects in management concept & Indian ethos.
  2. All intricate aspects are explained by simple, lucid and specific explanations and substantiated with neat and elaborate diagrammatic sketches.


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