KMBNFM04 FOREIGN EXCHANGE AND RISK MANAGEMENT UNIT 1 Foreign Exchange Foreign Exchange and Foreign trade, Exchange Rate Foreign Exchange of Stock, Balance of Payments, Balance of Payments Accounting Components of balance payments; Current Account , Capital Account, Official Reserve Account, Debit and Credit Entries Official Reserve Account: The Official Reserve Account records the changes in a country's foreign exchange reserves. It includes the following sub-accounts: International Exchange System Fixed and Floating Exchange rate system, Exchange rate system under IMF: Bretton woods system, The Smithsonian Agreement , The flexible Exchange Rate Regime UNIT 2Â Convertibility of Rupee; Current account Convertibility, Capital account Convertibility Theories of foreign exchange Rate, International fisher Effect ( IFE) Interest Rate Party (IRP) Administration of Foreign Exchange ; Authorised person , Authorised dealer Authorized Money Exchange UNIT 3 Foreign Exchange Transactions; purchase and sales transaction, Spot and Forward Transaction Forward margin, Factors determining forward margin, Merchant Rates: Basis of Merchant Rates, Types of buying and selling Rates Ready rates based on Cross 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 4 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 Market Settlement of Transactions: Chips, Swift, Chaps, Fed wire UNIT 5Â Exchange Risk: Exchange exposure and Exchange risk External Hedging, Forward Contract hedge, Money market hedge, hedging with futures, and Options Internal Hedge, Translation Explosure, Method of translation, managing translation Explosure Economic Exposure, Managing Economic Exposure,Interest rate risk
