Electives in Finance Area for PGDM (General) - Year II:

Course Title: Investment Analysis & Portfolio

Management
COURSE OBJECTIVE
The objective of this course is to introduce the student to both the theory
and applications of Investment analysis and Portfolio management. The
subject will give an in-depth insight into the techniques for valuation of
securities and the management and control of portfolios of financial
assets. Emphasis will be put on development of techniques that should be
part of the tool kit of those interested in becoming professional investors
and/or researchers in finance.
COURSE CONTENTS
Module
Sessio
n
1. The
Investment
Spectrum

1-2

Topic/Reading
An overview of markets and instruments, various
forms of investments, investment attributes,
sources of investment uncertainties, approaches
to investment decisionmaking, investment Style.
Profile of Indian securities market, understanding
trading systems in stock exchanges, rolling
settlement, depository system and internet
trading.
Reading:

Bodie, Kane, Marcus, Mohanty-Chapter 1, 2,

3, 4
Elton & Gruber-Chapter 1, 2, 3
Reilly, Frank K. & Brown, Keith C.- Chapter 1
Charles P. Jones(9th edition) -Chapter 1, 2,3,
4,5
www.bseindia.com
www.nsdl.com
www.nseindia.com
www.icicidirect.com
www.sebi.gov.in
Case: Warren E Buffet, 1995: Robert F. Bruner,
Cases in Finance, Fifth Edition, pp.3-22.

Module

Sessio
n

2. Risk &
Return

Topic/Reading
Classification of risk, relationship between risk
and return,
Reading:

3. Efficient
Markets

4-5

Elton & Gruber-Chapter 4, 5, 6, 7

Bodie, Kane, Marcus, Mohanty-Chapter 5, 6,
7, 8, 9, 10, 11, 12
Sharpe, Alexander & Bailey-Chapter 9, 10,
11
Strong , Robert A-Chapter 6, 7.
Charles P. Jones(9th edition)- Chapter 6, 7,
8, 9
Efficient market theories, determinants of efficient
market, strong, semi-strong and weak forms of
market efficiency, Random Walk Theory and tests
of market efficiency, Market anomalies. Empirical
validation of asset pricing models and market
efficiency, behavioral aspect in financial market.
Investment strategies in efficient and inefficient
markets.
Readings:
Bodie, Kane, Marcus, Mohanty-Chapter 12
Elton & Gruber- Chapter 17
Sharpe, Alexander & Bailey-Chapter 4
Charles P. Jones(9th edition)-Chapter 12

4. Security
Analysis

Fixed Income Securities: Bond prices and yields,

term structure and valuation, fixed income
portfolio management.
Readings:
Charles P. Jones(9th edition)- Chapter 17,
18
Bodie, Kane, Marcus, Mohanty-Chapter 14,
15, 16
Sharpe, Alexander & Bailey-Chapter 5, 13,
14, 15
Strong, Robert A-Chapter 13, 16
Case Study: GMO: The Value v/s Growth
Dilemma, Darden Business Publishing, William
Barton

Module

5.Portfolio
Managemen
t

Sessio
n

Topic/Reading

7-8

Fundamental analysis, Economy Industry

Company framework, Equity Shares: Valuation
models.
Readings:
Frank K. Reilly & Edgar A. Norton-Chapter
11, 12, 13
Bodie, Kane, Marcus, Mohanty-Chapter 17,
18, 19
Charles P. Jones(9th edition)-Chapter 11, 13,
14, 15
Case Study: Mascom Telecom
Case Study: Generation Investment Management,
Harward Business Publishing Sandra J . Sucher;
Daniela B Eyersdorfer, Ane Damgaard J E Nsen

9-10

4.4 Technical Analysis, basic tenets, tools, Dow

theory, charts and trend lines, MACD and other
models.
Readings
TESTS OF TECHNICAL ANALYSIS IN INDIA.
By: Sehgal, Sanjay; Gupta, Meenakshi.
Vision (09722629), Jul2007, Vol. 11 Issue 3,
p11-23, 13p, 6 charts; (AN 27024944)
Technical Analysis from A to Z by Steven B.
Achelis.
Donald E. Fischer & Ronald J. Jordan-Chapter
15
Charles P. Jones(9th edition)-Chapter 16
Case Study: TDL Electronics

11-18

Portfolio
objectives, construction, analysis,
diversification and optimal portfolio choice,
efficient frontier, Markowitz & Sharpe portfolio
optimization, Characteristic line, Capital Asset
pricing Model, Arbitrage Pricing Theory, Single
Index & multi factor Models. Portfolio evaluation
and revision, Portfolio protection
Readings:
Elton & Gruber-Chapter 3, 8, 9 & 22
Sharpe, Alexander & Bailey-Chapter 6, 7, 8,
23, 24
Charles P. Jones(9th edition)- Chapter 21,
22
Bodie, Kane, Marcus, Mohanty-Chapter 24,
25, 26, 27
Strong, Robert A.-Chapter 21, 22, 23
3

Module
6. Project
Presentation
s

Sessio
n
19-20

7. Self-Study

Topic/Reading
Group Project Presentations

Portfolio management practices in Indian &

International context.
Reading:
Merbert B. Mayo-Chapter 22
Stock
Market
Indices:
Types,
objectives,
construction, revision, utility and limitations,
growing role of floating index with special
emphasis on Morgan Stanley Composite Index.
Reading:
Frank K. Reilly & Keith C. Brown-Chapter 5
Carry forward trading & its experience in Indian
stock market
Bullions & Real Estate-Nature, significance and
impact on portfolio choice.

Course Title: Project Appraisal, Financing and

Control
COURSE OBJECTIVE:
The course aims at giving a broad understanding of project formulation,
Project selection, project appraisal, project financing, and techniques of
control. The course provides practical inputs on various aspects of project
appraisal as well as norms and procedure of project finance. The students
will be made familiar with practical aspects involved in preparation of
comprehensive project reports, and appraisal and financing of projects.

COURSE CONTENTS:
Modu
le
No.
I

Sessi
on
No./s
1-2

Topic & Reading/s

Conceptual Framework
Types of capital investments
Key issues in investment decisions
Strategy and Resource Allocation
Monitoring the environment
Scouting for project ideas
Project Identification
Preliminary Study
Project Formulation
Feasibility Study
Steps in Preparation of Detailed Project Reports
Reading:
Prasanna Chandra (2009): Projects Planning, Analysis,
Selection etc, Ch 1, 2, 3

II

III

3-4

5-9

Selection of Project by each group

Each group to basically firm up its project (1. Name of
the firm and 2. Nature of activity) by the end of the 2 nd
Session
Project Analysis:
Analysis of the industry, market, demand
Analysis of the technical aspects of business
Analysis of legal, banking and environmental factors of
business
Analysis of management factors of business
Analysis of the financial estimates and projections of
business
Reading:
Prasanna Chandra (2009): Projects Planning, Analysis,
Selection etc, Ch 4, 5, 6
Project Appraisal and evaluation:
Appraisal and quantitative evaluation of market,
industry, demand, macroeconomic, legal, banking,
environmental, management and finance factors of
business
Analysis of projected financial information and
parameters
Analysis of financial, economic, technical and other
indicators
Project Risk analysis, Risk Measurement, Risk Mitigation
and Risk Management
Risk-Return trade-of
5

Degree of risk and investment decision

Investment criteria, cost of capital
Project rate of return
Social Cost Benefit Analysis
Judgemental, behavioural, strategic and organizational
considerations

IV

1014

Readings:
Prasanna Chandra (2009): Projects Planning, Analysis,
Selection etc, Ch 8, 9, 10, 11, 12, 14, 17
Project Finance:
Risk Assessment and Credit Rating of Project
Pricing of the Project
Capital Structure
Menu of financing
Term loans and working capital advances
Raising venture capital in India and capital/loans abroad
Analysis of lending procedure and lending norms for
Project Finance
Financing of project from financial markets or/and
lending institutions. Sanction, Documentation, Security
creation and Disbursement of funds
Review of RBI/Commercial Banks/FIs guidelines of
project finance
Recent Trends
Long term shifts in global investment and saving,
farewell to cheap capital, emerging equity gap, global
capital flows
Readings:
Prasanna Chandra (2009): Projects Planning, Analysis,
Selection etc, Ch 18, 20
McKinsey Global Institute (MGI) research papers
1. Farewell to cheap capital? The implications of longterm shifts in global investment and saving
December 2010
2. Mapping global capital markets 2011 updated
August 2011
3. The emerging equity gap: Growth and stability in
the new investor landscape December 2011

1519

Group Presentations of Project Reports

Project Implementation
Management of projects
Project planning, project control and human aspects
Time estimation
Determination of critical path

PERT & CPM models

Readings:
Prasanna Chandra (2009): Projects Planning, Analysis,
Selection etc, Ch 21, 22
Case:
Merck & Company: Evaluating a drug licensing
opportunity (2000), Richard S Ruback and David Krieger,
Harvard Business School Case published in Case
Problems in Finance by Kester, Ruback & Tufano, Pages
371-76
VI

20

Group Presentations of project appraisal reports

Putting it all together

TEXT BOOK
Prasanna Chandra (2009), Projects Planning, Analysis, Selection,
Financing, Implementation and Review, Tata McGraw Hill 7th Edition
OTHER READINGS
Khatua, Sitangshu, (2011) Project Management and Appraisal, Oxford
University Press, 1st Edition
Jefrey K, project Management Achieving Competitive Advantage,
Pearson Education 2009
Carkenord, Barbara A, Seven steps to mastering business analysis,
Cengage Learning, 1st India Edition
Gatti, Stefano (2008), Project Finance in Theory and Practice, Academic
Press, 1st India Edition
Kester, Ruback and Tufano (2007), Case problems in Finance, Tata
McGraw Hill 12th Edition
Wysocki, Robert K, Efective Project Management: Traditional, Adaptive,
Extreme, John Wiley & Sons, 4th Edition 2006
S. Choudhury, Project Management, Tata McGraw Hill 2004
Vishwanathan, R, Industrial Finance Macmillan 2003
McKinsey Global Institute (MGI) research papers
1. Farewell to cheap capital? The implications of long-term shifts in
global investment and saving December 2010
2. Mapping global capital markets 2011 updated August 2011
3. The emerging equity gap: Growth and stability in the new investor
landscape December 2011

Course Title: Financial Derivatives

Course Objective:
Financial derivatives have become an indispensable part in todays world.
The purpose of this course is to give an overview of the fundamentals of
derivatives. This course introduces financial derivatives, such as forwards,
futures, swaps, and options. Application of these derivatives instruments
in managing risk management, besides their pricing / valuation issues
would be explored.
Course Contents:
Modu
le
No.

Sessio
n Nos.

Topics & Readings

Introduction to Derivatives Securities:

Forward Contracts; Futures Contracts; Options & Other
Derivatives Meaning & Diferences; Types of traders;
Uses of Derivatives; Role of Derivatives; Criticism of
Derivative contracts; Overview of Indian Derivatives
market.
Reading: Hull & Basu: Chapter 1

Mechanics of Futures Market:

Specifications of Futures Contracts; Operation of
Margins; Newspaper Quotes; Convergence of Futures
price to Spot Price; Safeguards in Futures Market;
Closing of a Futures position; Open Interest.
Reading: Hull & Basu: Chapter 2

3-4

Determination of Futures prices:

Investment vs. Consumption assets; Short selling;
Cost-of- Carry Model; Valuing Futures Contracts;
Futures Price & the Expected future Spot Price.
Reading: Hull & Basu: Chapter 5

5-6

Hedging Strategies Using Futures:

Basic Principles; Basis Risk; Cross hedging; Minimum
Variance Hedge Ratio; Stock Index Futures; Hedging
with Stock Index Futures; Rolling the hedge forward.
Reading: Hull & Basu: Chapter 3

Mechanics of Options Market:

Types; Option Positions; Underlying assets;
Specifications of a Stock Option; Commission &
Margins; Trading & Clearing Corporation.
Reading: Hull & Basu: Chapter 8

8-9

Properties of Stock Options:

Factors afecting Option prices; Upper & Lower Bounds
of Option prices; Put-Call parity; Early exercise of
options; Relationship between American Put - Call
prices; Efect of Dividends.
Reading: Hull & Basu: Chapter 9

10-12

Valuing Options:
Binomial Model, one-step, two step binomial trees;
Risk-neutral valuation; Black-Scholes Options Pricing
Model (BSOPM); Assumptions; Log-normal property of
stock prices; Interpretation of the formula; Volatility;
Implied Volatility; Volatility smiles, Efect of Dividends.
Reading: Hull & Basu: Chapter 11, 13

13-14

Trading Strategies Using Options:

Strategies involving a single option & a stock; Spreads;
Combinations; Synthetic Stock.
Reading: Hull & Basu: Chapter 10

15-16

The Greeks:
Delta, Theta, Gamma, Vega, and Rho - Meaning, Uses
and relationship.
Reading: Hull & Basu: Chapter 17

17-18

Swaps:
Concepts; Diferent types of Interest rate swapsStructure, Pricing and Valuation of Interest rate swaps;
Currency swaps- Structure, Pricing and Valuation of
Currency swaps.
Reading: Hull & Basu: Chapter 7

19

Commodity Derivatives:
Products, participants, Diferences between
Commodity and Financial Derivatives; Commodity

Derivative Exchanges in India; Present Scenario in

India.
6

20

Lessons from Derivative Disasters:

Main learnings from incidents of losses sustain while
using derivative contracts such as Barings Bank,
Orange County, Kidder Peabody etc.
Reading: Hull & Basu: Chapter 34

Suggested Readings:
John C. Hull & Sankarshan Basu, Options, Futures, and Other
Derivatives, 7th Edition, Pearson Education, 2010.
Robert W. Kolb and James A. Overdahl, Futures, Options & Swaps, 5th
Edition, Wiley India, 2009.
Don M. Chance and Robert Brooks, Derivatives and Risk Management
Basics, Cengage Learning, 2008.
David A. Dubofsky, and Thomas W. Miller, Derivatives Valuation &
Risk Management, Oxford University Press, 2003.

Course: Management of Financial Services

OBJECTIVE
The changes taking place in the financial services industry have far
reaching efects on our local and global economies. In view of these
changes, the course aims at providing an in-depth understanding of the
financial services industry as it exists and the forces governing its future.
The emphasis is laid on integrating the theoretical and practical
framework to analyze the forces that shape current and future
developments in the financial services industry. Financial services are
discussed in detail with special reference to India.
COURSE CONTENTS
Module
No
1

Sessi
on
No(s)
1-2

Topic & Readings

- Financial Services Developments, Growth and Future prospects
Financial Services Industry in transition, Financial
services
and Value Production, Asset Management,
10

3-4-5

Information and
Advisory Services, Financial Services and the
Economy.
Individual Assignments : Article Review
Readings:Ch. 1,1.1 to 1.6, Financial Services,
Thummuluri Siddaiah, Pearson
Ch.1, 1.1to 1.4.2 Financial Services,
by N.P.Tripathy,(IIMS) PHI
Announcement of Real Life Projects
Depositories,
Commercial Banks,
Financial Sector Reforms,
Role of RBI as Banking Regulator
Universal Banking
Debit and Credit Cards.
FAQ s on Depository Services
CASE STUDY ON BANKS BALANCE SHEET.
Readings: Ch. 10, 10.1 to 10.11, Financial
Services, Thummuluri Siddaiah,
Pearson.
Ch.14, 14.1 to 14.7, Financial
Services, N.P. Tripathy(IIMS), PHI,
Ch.13, 13.1 to13.10, Financial
Services, N.P. Tripathy,(IIMS)
www.rbi.org.in,
www.nsdl.co.in, www.sebi.gov.in

6-7-8

Merchant Banking
New Issue Management, Pricing of Securities,
Merchant
Banking, Bought out Deals, private Placement
and Book
Building, Loan Syndication.
Practical Exercise on Pricing of Equity Shares and
Allotment
Of shares in IPO/FPO.
CASE STUDY ON SYNDICATION OF LOANS
Readings: Ch.3, 3.1 to 3.7, Ch4, 4.1 to 4.19,
ch.5, 5.1 to 5.7-Financial Services
By Thummuluri Siddaiah,, 2011, Pearson
Publishers.
Ch.7, 7.1 to 7.8, Financial Services, N.P.
Tripathy,(IIMS), PHI

9-10

Venture Capital-Concept,
guidelines of SEBI
Stages of Venture financing,

Regulatory

11

Criteria for appraisal and methods of

evaluation.
Exit Strategy.
Case Study on Venture Capital
Readings: Ch.5 P.81-104, Financial Services and
Markets, Dr. Punithavathy
Pandian, Vikas Publishing.
Ch.8, P.117-135, Financial Services, N.P. Tripathy,
(IIMS) PHI
Ch 15, 15.1 to 15.6, Financial Services, Thummuluri
Siddaiah, Pearson India.
5

1112

Factoring and Forfaiting

Concept and scope; need for factoring and
forfaiting;
Bills discounting and factoring;
Practical Problems and Exercises.
GROUP PRESENTATIONS AND EVALUATION
Readings: Ch. 23, 23.1 to 23.5, Financial Services,
Thummuluri Siddaiah, Pearson.
Ch 10, 10.1 to 10.10 and Ch 11, 11.1 to
11.6, Financial Services by
N.P. Tripathy,(IIMS), PHI

1314

1516

Credit Rating
Need for credit rating; Scope and Methodologies of
credit rating for financial companies, banks and
financial instruments; limitations
.
Case Study on Credit Rating
Readings: Ch. 12, 12.1 to 12.9, Financial Services,
Thummuluri Siddaiah, Pearson.
Ch.9, 9.1 to 9.9, Financial Services, N.P
Tripathy, PHI.
Mutual Funds
Structure and functions of Mutual funds; types of
mutual funds. Performance evaluation of Mutual
Funds
Practical Problems and Exercises.
Readings: Ch 13, 13.1 to 13.15, Financial
Services, Thummuluri Siddaiah,Pearson
Ch.8, P.144-164, Financial Services,
Dr. Punithavathy Panidian,Vikas.
Ch.6, 6.1 to 6.14, Financial Services,
N. P. Tripathy(IIMS) , PHI

12

1718

Leasing and Hire Purchase.

Case Study on Leasing
Practical Problems and Exercises
Readings: Ch 12, 12.1 to 12.18, Financial
Services, N.P. Tripathy(IIMS), PHI
Ch.2, P.16 to 39, Financial Services, by
Dr. Punithavathy Pandian,Vikas.
Ch. 18, 18.1 to 18.9,Financial Services,
Thummuluri Siddaiah, Pearson.
Insurance Services-

19

10

20

Types of Insurance
Role of Insurance Regulator Development
Authority
Readings:Ch 14, 14.1 to 14.6, Financial
Services,Thummuluri
Siddaiah, Pearson.
Contemporary Issues :
Internet Banking, Internet Trading in Securities
Market
Role of SEBI as regulator of Capital Markets.
Readings: Ch. 13, 13.1to 13.10, Financial
Services, N.P. Tripathy(IIMS),PHI

SUGGESTED READINGS :

Tripathy, N.P., Financial Services,,Prentice Hall of India Limited

Paul Justin, Padmalatha Suresh, Management of Banking and Financial
Services, 2007, Pearson Education
Financial Services Thummuluri Siddaiah - Pearson,2011.
Financial Services and System, K. Sasidharan and Alex K. Mathews,2008,
Tata Mcgraw Hill Publishing Ltd.,
Financial Services and Markets Dr. Punithavathy Pandian- Vikas
Publishing House (P) Ltd.
Perspectives on Financial Services Subhomoy Das- Allied Publishers(P) ltd
Financial Services Khan and Jain.-Tata Mcgraw Hill..
Merchant Banking and Financial Services- Dr S. Gurusamy Mcgraw Hill
Education-Vijay Nicole Imprints(P) Ltd
Khan, M.Y., Financial Services, Tata McGraw Hill.
Pandey, I.M.,, Venture Capital The Indian Experience, Prentice Hall of
India
Saunders, Anthony, Financial Institution Management, Irwin McGraw-Hill,
3rd Edition
Verma, J.C., Merchant Banking, Bharat Law House Pvt. Ltd.
SEBI / RCI guidelines
RBI Reports
Indian Economic Survey
13

CMIE Reports

Course Title: Commercial Banking

COURSE OBJECTIVE:
The purpose of the course is to provide a thorough understanding of the
Key aspects of Management of Commercial Banks and to give exposure
to the students in issues and
Challenges being faced by the Commercial Banks consequent to Banking
Sector Reforms,
Risks faced by banks in the dynamic economic
environment, Liability Management, Management of Capital, Loan Policy,
Exposure Norms, Investment Policy , Management of Assets Quality,
Recovery Management etc. The course will also cover the key aspects of
financing to SME sector and Retail banking and the emerging opportunity
to banks in wealth management .
COURSE CONTENTS:
Modu
le
No.
I

Sessi
on
No./s
1-2

II

3-4

Topic & Reading/s

*An Overview of Banks and the Financial Services Sector.

*Organization and Structure of Banking and the Financial
Services Industry
*Banking Sector Reforms
* Impact of Govt. Policy and Regulation on the Banking
Sector.
* Functions of Banks.
* Financial System structure
*Types of Banks
* Organizational set up in a Bank.
* Opening of New Branches/ATMs
*Banks Balance Sheet
* Analysis and Evaluation of Financial Performance of
Banks

14

III

5-6

IV

7-8

9-10

VI

11-12

VII

13-14

*Measuring and Evaluating the Banks performance and

their
principal competitors
* Analyzing Banks profitability
*Supervisory Mechanism of RBI for the Banks-CAMELS
approach
CASE STUDY and Exercises on calculating Financial
Ratios.
* Management of Capital
* Capital Planning and Capital Adequacy of Banks
* Basel Norms
Exercises for computing Capital Adequacy
* Managing Sources of Funds for Banks and their principal
competitors.
* Liabilities Management(incl. NRI Deposits)
* Asset Liabilities Management(ALM)
* Managing and pricing deposits services
* Cost of Funds and Transfer Pricing Mechanism
CASE STUDY on ALM
* Managing Investment Portfolio
* Investment Banking-Investment Policy.
* Liquidity and Reserve Management .
* Non-Fund Based services
Exercises in Investment Management
*Credit Management* Loan Policy of Banks , Exposure norms.
* Corporate Banking, Rural Financing ,Financial Inclusion,
SME,
Retail Banking, Personal Banking, Wealth Management.
* Credit Appraisal- Assessment of Term Loan, Working
Capital and
Non-Fund Limits., including Export Finance.
* Loan Delivery
* Credit Rating and pricing of loans
CASE STUDY on Credit Appraisal and Assessment of
Credit Limits
* Credit Monitoring and Risk Based Supervision in Banks
* Restructuring of Advances-CDR Mechanism.
* RBIs prudential norms on Income Recognition and Asset
Classification.
* Management of NPAs
* Recovery of loans and advances-Legal and Non-Legal
Measures
CASE STUDY on Credit Monitoring and Corporate Debt
Restructuring

15

VIII

1516

IX

17-18

19-20

* Technology in Banks
* Payment Service Mechanism.
* Contemporary issues in banking
*Financing Imports and Exports.
*Letter of Credit, Packing Credit and Export Facilities,
*Role of ECGC in promoting International Trade.
Case Study in financing imports and exports
Financing to SME sector.
Retail Banking
Marketing of Banks Products and Services.
Wealth Management.
Case study in SME banking and Retail Banking
PROJECT WORK

TEXT & READINGS :

1. Management of Banking, S. Scott MacDonald and Timothy W. Koch,
Publishers : CENGAGE Learning.
2. Bank Management and Financial Services, Peter S. Rose, Sylvia C.
Hudgins,
Publishers : Tata Mcgraw Hill.
3. Management of Banking and Financial Services, Padamlatha Suresh and
Justin Paul,
Publishers : PEARSON.
4. BANKING : Theory and Practice, K. C. Shekhar and Lekshmy Shekhar,
Publisher : Vikas Publishing House (P) Ltd.
5. Commercial Bank Management, Singh and Dutta, Mcgraw Hill
Education(India) (P) Ltd.
6. Financial Services and Systems(Chapter 10, 13, 14 and 16),K.
Sasidharan and Alex K. Mathews,
Publishers : Tata Mcgraw Hill Publishing company.
7.Modern Commercial Banking, H. R. Machiraju, Publishers : New Age
International Publishers.

Course Title: International Financial Management

Course Objectives:
This course aims at providing a conceptual framework within which key
financial decisions of the multinational firm can be analysed. It aims at
providing an insight into operations and functioning of foreign exchange
markets, hedging foreign exchange exposure, besides the tools for taking
investment and financing decisions in a multinational setting.

16

Course Outline:
Modu
le
1

Session
Nos.
1

2-3

4-5

6-7

Topics & Readings

Globalization and the Multinational Firm
Rise of Multinational Corporations, Process of
Overseas expansion, Internationalisation of
Business & Finance, Dimensions of International
Finance
Readings: Shapiro: 1 ; Levi: 1; Sharan: 1; Eiteman: 1;
Vij: 1
Market for Foreign Exchange
Structure of Foreign Exchange Market, Major
Participants, Direct & Indirect quotes, Cross
exchange rates, Spot & Forward Market, FEDAI
rules, Determination of Exchange rates in Spot
market. Factors influencing determination of
exchange rates.
Readings: Shapiro: 2 ; Levi: 2&3 ; Sharan: 4 & 5;
Madura: 6;
Eiteman: 4; Vij: 7
International Monetary System
Exchange Rate systems - Fixed-rate system, Free
float, Managed float, Current system of Exchange
rate determination.
Brief history of the International Monetary System
Classical Gold Standard, Bretton Woods System,
Post-Bretton Woods system, European Monetary
System & Monetary Union, Emerging Market
Currency Crisis.
Readings: Shapiro: 3 ; Levi: 10 & 11; Sharan: 3;
Eiteman: 2; Vij: 2
International Parity Relationships
Arbitrage and Law of one price
Purchasing Power Parity- Absolute & Relative form,
empirical evidence on PPP
Interest Rate Parity uncovered and covered,
empirical evidence
International Fisher Efect, empirical evidence,
Relationship between Forward rate and future
Spot rate.
Readings: Shapiro: 4 ; Levi: 5 & 6; Madura: 7 & 8;
Eiteman: 6.
Balance of Payments
17

Modu
le

Session
Nos.

Topics & Readings

9-10

11-12

13-14

15-16

Structure of Balance of Payments categories,

Equilibrium & Disequilibrium, Approaches to
Adjustment, Coping with Current Account Deficit,
Capital Account Convertibility.
Readings: Shapiro: 5 ; Levi: 7 ; Sharan:2; Madura: 2;
Eiteman: 3; Vij: 4.
Managing Foreign Exchange Exposure
Concept of Foreign Exchange Exposure, Types of
Foreign Exposure Transaction, Operating &
Translation
Managing Foreign Exchange Exposure, Need for
Hedging, Hedging of Transaction & Real Operating
Exposure, Managing Translation Exposure
Readings: Shapiro: 10& 11; Levi: 13 & 14; Sharan: 9 &
10; Madura 10 & 11; Eiteman: 8-10; Vij: 9-11.
Derivatives on Currencies
Currency Futures & Options - Product details
Structure and pricing of Interest rate & Currency
Swaps, Swap Market Quotations, Currency
derivatives in India
Readings: Shapiro: 7,8,9; Sharan: 6,7,19; Madura: 5;
Eiteman: 5.
International Financial Markets
International Debt Market, Types of Instruments,
Foreign Bonds and Eurobonds, Credit Ratings
International Equity Markets, Market Structure,
Trading Practices and Costs.
Global Development Banks - IBRD, IFC, IDA &
Regional Development Banks - ABD
Readings: Shapiro: 12 & 13; Levi: 21; Sharan: 15 &
16;
Eiteman: 12, 13; Vij: 18.
Capital Structure and Cost of Capital for MNCs
Domestic vs. MNC cost of capital, Cost of Capital
across countries, International CAPM, Cost of
Capital for Foreign Projects.
MNCs Capital Structure decision, Subsidiary vs.
Parent Financing, Cross-Border Listings of Stocks,
Efect of Foreign Ownership Restrictions, Financial
Structure of Subsidiaries & MNC.
Readings: Shapiro: 14; Madura: 17 & 18; Vij: 12.

18

Modu
le
6

Session
Nos.
17-18

Topics & Readings

International Capital Budgeting

Evaluation criteria, Subsidiary vs. Parents
Perspective, Additional factors to be considered
Exchange rate fluctuations, Inflation, Impact of
Project on existing cash flows, Host countrys
incentives, Risk Adjustment in Capital Budgeting
Analysis, Real Options & Adjusted Present Value
Model.
Readings: Shapiro: 17; Levi: 19; Sharan: 12; Madura:
14; Eiteman: 18.
7
19
Financing International Trade
Payment terms in International Trade Cash in
Advance, Letter of Credit, Draft, Consignment,
Open Account.
Documents in International Trade Bill of Lading,
Invoices, Insurance certificate.
Financing techniques Bankers Acceptance,
Discounting, Factoring & Forfaiting.
Agencies of International Trade & Credit Insurance
EXIM Bank of India, ECGC.
Readings: Shapiro: 18; Levi: 23; Sharan: 22; Madura:
19; Eiteman: 23.
20
International Cash Management
Objectives, Centralised Cash Management,
Accelerating Cash Inflows, Bilateral & Multilateral
Netting, Blocked funds, Transfer Pricing, Investing
excess cash.
Readings: Shapiro: 19; Levi: 17; Sharan: 21; Madura:
21; Vij: 15.
Suggested Readings:
Eiteman, David K., Stonehill, Arthur I., & Moffett, Michael H.,
Multinational Business Finance, 12th Edition, Pearson Education, 2011
Madura, Jeff, International Corporate Finance, 10th Edition, Cengage
Learning, 2010
Shapiro, Alan C., Multinational Financial Management, 9th Edition, Wiley
India, 2010
Levi, Maurice D., International Finance, 5th Edition, Roultedge, 2009

19

Eun, Choel, & Resnick, Bruce G., International Financial Management,

4th Edition, Tata McGraw-Hill, 2003
Sharan, V., International Financial Management, 6th Edition, PHI Learning,
2012
Vij, Madhu, International Financial Management, 3rd Edition, Excel
Publishers, 2011
Apte, P.G., International Financial Management, 6th Edition, Tata McGrawHill, 2011

Course Title: Insurance and Risk Management

COURSE OBJECTIVE
The objective of this course is to introduce the student to both the theory
and applications of Insurance and Risk Management. The subject will give
an in-depth insight into the insurance areas like Life, Health, Auto,
Accident, Reinsurance and managerial control of insurable assets.
Emphasis will be put on development of techniques that are part of the
tool kit of those interested in becoming insurance professionals and/or
researchers in insurance. The emphasis is laid on insurance as a means of
dissipating and disseminating risk in insurance management.
COURSE CONTENTS
Module

Sessio
n

1.
Introduction
To Insurance

2. Principles
of an
Insurance
Contract

2-3

Topic/Reading
Importance of Insurance, Nature of Insurable
Risks, Insurance Needs Analysis, Methods of
Need Analysis, Classification of Insurance, Risks
in Insurance
Essentials of an Insurance Contract, Diference
between an Insurance Contract and a Wager
Contract, History of Insurance contracts,
Development of Insurance in India. PSU and
Private Sector Insurance Companies in India

20

Module
3. Life
Insurance

Sessio
n

Topic/Reading

4-7

Principles of Life Insurance, Mortality Tables,

Construction of Mortality Tables, Premium and
Bonus, Life Insurance Products, Policy conditions,
Portability, Pricing of Life Insurance Plans,
Underwriting, Medical Records and Risks in Life
Insurance.
ULIP and Whole Life Plans, Annuity and Pension
Plans, Settlement of Claims, LIC of India and
Private Sector Life Insurance Companies in India.
Pension Plans in India. Life Insurance Sales and
Rebating.
Health Insurance Plans in India, diferent Health
Insurance Schemes for Elder Citizens, Group
Health Insurance, Third Party Administrator TPA
and HMO, Portability, Policy Conditions, Pricing of
Health Insurance Plans, Deductibles,
Underwriting, Medical Claims Administration,
Medical Records and Risks in Health Insurance,
Critical Illness Insurance, PSU and Private Sector
General Insurance Companies in India. Health
Insurance Sales and Rebating.

4. General
InsuranceHealth
Insurance

8-10

5. General
InsuranceAccident and
Auto
Insurance

11-12

Accident Policy and Accident Insurance. Auto

Insurance in India, Third Party Auto Insurance,
Comprehensive Auto Insurance, Portability, Policy
Conditions, Pricing of Auto Insurance Plans,
Deductibles, Underwriting, Auto Claims
Administration Risks in Auto Insurance, PSU and
Private Sector General Insurance Companies in
India. Auto Insurance Sales and Rebating.

6. Insurance
Regulation in
India : IRDA.
Also PFRDA

13-14

Insurance Regulatory and Development Authority

(IRDA) Rules and Regulations, Registration of
Insurance Company, Loss Prevention and Control,
Tarif Advisory Committee, Protection of
Policyholders Interest. Pension Regulator PFRDA,
Pension Regulation, NPS, EPFO.

21

Module

Sessio
n

7.Bankassura
nce and
15
Marketing of
Insurance
Products

8.
Reinsurance

9. Risk in
Insurance

10. Risk
Management
in Insurance

16

17-18

19-20

Topic/Reading

Trends in Insurance Marketing, Marketing

Strategies by Diferent Companies , Rebating,
Bankassurance in India, Bankassurance Models,
Future of Bankassurance

The Reinsurance Contract, Functions of

Reinsurance, Methods of Reinsurance,
Reinsurance vs Double Insurance, Future of
Reinsurance, Reinsurance Regulation in India,
Reinsurance Risk, Global Reinsurance
Understanding risk in Insurance, Risk and
Hazards,
Theories
of
Insurance
Risk
Management, Probability in Insurance Risk
Management, Analysis of Financial Statements of
an Insurance Company, Accounting Functions.
The
Identification,
Assessment,
Treatment,
Management and Implementation of Risk
Management Plan.
Risk
Risk
Risk
Risk

Mitigation
Mitigation
Mitigation
Mitigation

through
through
through
through

Fire Insurance
Liability Insurance
Agriculture Insurance
Marine Insurance

TEXT BOOK
Swarup C. Sahu and Suresh C. Das, (2013) Insurance Management,
Himalaya, 2nd Ed, 2013.
OTHER READINGS
G E Rejda, Principles of Risk Management and Insurance, Pearson, 2002
P K Gupta, Insurance and Risk Management, Himalaya, 2005
Harrington And Niehaus, Insurance and Risk Management, McGraw Hill,
1999
Taxmann, Insurance Law Manual, 2001
Insurance Institute of India, Practice of General Insurance, Mumbai 1999

22

Robert I. Mehr, Life Insurance Theory and Practice, Business Publications

Inc, 1997
Mark S. Dorfman, Fundamentals of Insurance, Prentice-Hall, 2002

Course: Financial Engineering

This course is a sequel to Financial Derivative. It will develop the

advanced tools needed to understand and value the increasingly complex
financial instruments and contracts which are being used by corporations
and other organizations. It aims at reviewing the main models and
modeling techniques used in practical applications, understanding their
applicability and limitations, and at building an integrated framework
enabling students to: 1) decide what stochastic factors (e.g., volatility,
jumps, one or more interest rate factors, default intensities) should be
incorporated in a reasonable pricing model for a given derivative; 2)
formulate a consistent model incorporating the chosen factors; 3)
calibrate the model using market data; 4) price the derivative and identify
a hedging strategy.

Course Outline
Module
1 Financial
Engineerin
g

Session
No.
1

Topic
Scope and tools of financial engineering; factors
contributing
to the growth of financial engineering; salient
aspects in designing innovative products,
processes, and strategies
Readings:

Marshall

and

Bansal

(1992),

Financial

23

Engineering, a complete guide to Financial

Innovations, Prentice Hall of India, Chapters
1 and 2

3-6

Martingale Pricing & Monte Carlo simulation:

Martingales, Brownian motions, Ito processes,
Difusion & Stochastic diferential equations, Itos
lemma, Girsanov theorem
The martingale approach to derivative pricing.
Examples: Black-Scholes & Black formula
Monte Carlo Simulation: Euler Discretization,
Choleski decomposition, Estimating the greeks
through Monte Carlo simulation
Readings:

Hull, John C and Basu (2011). Options, Futures

and Other Derivatives, Prentice Hall of India,
7e, Chapter 19

7-9
Modelling Volatility
The Constant elasticity of variance (CEV) model and
the implied volatility function (IVF) model, The
Merton-Jump difusion model. Stochastic Volatility
Models
Readings:

2.Exotics
Options

10-12

Hull, John C and Basu (2011). Options, Futures

and Other Derivatives, Prentice Hall of India,
7e, Chapter 26
1. Exotic Options - Non-standard Options,
Forward start options, Chooser options,
Barrier options, Binary Options, Look back
options, Compound options, Shout Options,
Asian Options, other complex options and
their valuation.
2. Variance and volatility Swaps, VIX calculation,
Correlation swaps, Volatility Trading
Readings:

Hull, John C and Basu (2011). Options, Futures

and Other Derivatives, Prentice Hall of India,

24

7e, Chapter 24
3.Introducti
on to Fixed
Income
Securities

13-14

Basic instruments (Swaps, Caps & Floors,

Swaptions), The market pricing formulas & quoting
conventions, Pricing caps, floors and swapations as
bond options
Valuations of Convertible bond, Callable and putable
Convertible bond using Black Scholes and Binomial
tree methods.
Readings:

4. Interest
rate
models

15-17

Marshall and Bansal (1992), Financial

Engineering, a complete guide to Financial
Innovations, Prentice Hall of India, Chapter
15.
Hull, John C and Basu (2011). Options, Futures
and Other Derivatives, Prentice Hall of India,
7e, Chapter 28
Hull & White, Heath-Jarrow-Morton, CoxIngersoll-Ross, Jamshidian, Vasicek, Merton
Black, Derman & Toy
Binomial and trinomial trees

Readings:

5. Real
Options

18-20

Hull, John C and Basu (2011). Options, Futures

and Other Derivatives, Prentice Hall of India,
7e, Chapters 30 & 31

Real Options - Real Option Examples, Review of

NPV, WACC, and Options, Comparison of Real
Option and NPV, approaches to investment
decisions, project mapping. Deferral options,
Abandonment options, Contraction options,
Expansion options, Compound options, Switching
options.
Readings:

Hull, John C and Basu (2011). Options, Futures

and Other Derivatives, Prentice Hall of India,
7e, Chapter 33
The Options Approach to Capital Investment
25

Dixit & Pindyck, HBR, May-June 1995

Investment Opportunity as Real Option:
Getting Started on the Number Luehrman,
HBR, July-Aug, 1998
Real Option Primer: A Practical Synthesis of
Concepts and Valuation Approaches Hevert,
Journal of Applied Corporate Finance, Vol 14,
No 2, Summer 2001
Option Pricing Theory and its Applications
Damodaran
Do Forgone Earnings Matter when Modeling
and Valuing Real Options? A Black Scholes
Teaching Exercise D Lander, Financial Practice
and Education, Fall/Winter 2000
Estimating a Firms Cost of Capital: An Option
Pricing Approach Hsia, Journal of Business
Finance and Accounting, 18(2), January 1991
Uncertainty: The new rules of Strategy Amran
and Kalutilaka, Journal of Business Studies,
May-June 1999
Capturing the value of flexibility Amran and
Howe, Strategic Finance, December 2002
Real Options and Strategic Decisions
Copeland and Howe, Strategic Finance 2002
Real Options: Facts and Fantasy Damodaran
The Promise and Perils of Real Options
Damodaran
What is not a Real Option: Considering
Boundaries For the Application of Real Options
to Business Strategy Adner and Levinthal,
Academy of Management Review, 2004, Vol
29, No 1, 74-85

Text

Hull and Basu (2011). Options, Futures and Other Derivatives,

Prentice Hall of India, Seventh Edition
Marshall and Bansal (1992), Financial Engineering, a complete guide
to Financial Innovations, Prentice Hall of India

References

Schwartz E S and Trigeorgis L (2001), edited Real Options and

Investment under Uncertainty, Classical Readings and Recent
Contribution, MIT Press

26

Copeland T and Antikarov V (2001), Real Options A practitioners

Guide, Texere
Eales, B (2000), Financial Engineering, Macmillan
Neftci S N (2005), Principles of Financial Engineering, Academic
Press
Mason et al (1995), Cases in Financial Engineering, Applied Studies
in Financial Innovation, Prentice Hall, New Jersey
Paul Glasserman (2004), Monte Carlo Methods in Financial
Engineering, 1st edition, Springer
Damiano Brigo and Fabio Mercurio (2006), Interest Rate Models Theory and Practice, 2nd edition, Springer
Riccardo Rebonato (2002, Modern Pricing of Interest-Rate
Derivatives: The LIBOR Market Model and Beyond, 1st edition,
Princeton University Press.

Course: Mergers , Acquisitions and Corporate

Restructuring
Learning Objectives:
a) Equipping the students to understand the rationale for the process
of
Corporate restructuring through mergers & acquisitions and other
techniques in M & A.
b) Due Diligence and evaluation of target firms,
c) Cross Border acquisitions
d) Valuation of companies, methods of payments and financing in M &
A.
e) Post-merger integration including HR issues in cultural integration.
f) Legal processes in M & A , SEBI regulatory requirements, Tax and
accounting aspects.

Session Plan
Module

Sessio
n

Topic

27

1. Introduction to
Mergers and
Acquisitions

1-3

2. Value Creation
by
restructuring

4-6

3. Executing
restructuring
process

7-9

- Framework for Mergers & Acquisitions, Major

types
of Mergers and Acquisitions
Motives and justification for mergers &
acquisitions,
- Concept of Synergy, Approaches to
formulating strategy.
- M&A as a Growth strategy
- BCG Matrix, Ansof Matrix, Porter Approach,
- Due Diligence of Target firms,
- Cost Benefit analysis of M and A
( CASE STUDY : Merger of Reliance
Petroleum
With Reliance
Industries Ltd.)
Readings: Mergers, Restructuring and
Corporate Control, PHI
J.Fred Weston, Kwang S. Chung and Susan E
Hoag( Part-II, P.56-82
and Mergers, Acquisitions and Corporate
Restructuring,,
Prasad G. Godbole (IIMA), Vikas Publishing
House (P.3 to 8)
- Diversification & Conglomerates,
Restructuring
Strategies.
-Types of Restructuring, Strategic Alliance,
- Joint Ventures
- Corporate divestments and disinvestments.
Case Study : Demerger of Ultratech by
L & T and its
acquisition by GRASIM
(A Case Study on Corporate Restructuring)
Readings: Mergers, Acquisitions and
Corporate Restructuring,
Prasad G. Godbole,(IIMA), Vikas,Publishing,
2009
( P.9 to 32)
and Mergers, Restructuring and Corporate
Control, by J.Fred
Weston, P. 56-82, 190-to 223.
- Management Buyout (MBO), Leveraged
Buyout (LBO),
Cross- Border M & A.
Reverse Merger, spin-ofs, Takeovers-hostile
and friendly
Defenses against hostile take over.
-Readings: Ch.5, 58-68, Mergers, Acquisitions

28

and

4. Valuation
of firms

10-13

5 Compliance
With Legal
requirements

14-15

6.Accounting
and Tax
Implications
16

Restructuring, Prasad G.Godbole(IIMA)

-Ch. 17,Mergers,Acquisitions and other
restructuring
Activities, Donald M DePamphilis ( 649-680)
Case Study : Merger of ICICI with ICICI
Bank
(Reverse Merger)
- Corporate Valuation Valuation Problems,
- ESOPS and valuation problems
- Various methods (FCF, DCF, Valuation of
Intangibles).
- Exchange Ratio,
- Methods of Payment for M & A Funding
Options
- Readings: Ch.14,15,16 P. 212 to 248.
- Practical Exercises and Problems in
Valuation.
Case Study : Acquisition of Corus by Tata
Steel
( A Case on Cross Border Acquisition and
Funding Options for
an acquisition)
-Legal Processes in M &A
-SEBI Takeover code and regulatory
guidelines
-Competition Act -2002.
-Ch 7 to 10 ,Mergers, Acquisitions and
Corporate
Restructuring, Prasad, G. Godbole ,IIMA,
Vikas
Publishing.
CASE STUDY
Merger of Ponds India Ltd with
Hindustan Lever Ltd.
( A Case on Legal Processes in M
&A )
Accounting aspects in Mergers &
Acquisitions.
- Tax implications in M & A
Readings, Ch. 12 and Ch 13, P. 175-204,
Mergers,
Acquisitions and Corporate Restructuring,
by Prasad
G. Godbole, (IIMA)
( Exercises in Tax and Accounting
aspects)

29

7. Post-merger
and change
management

8. Group
Presentation

17-18

19-20

- Post-merger integration,.
- Human aspects, implications of
organizational and
Cultural changes.
- Case Study Merger of Indian Airlines
with Air India
Key Issues in Due Diligence and
Integration
Lessons Learnt.
- Readings: Part-II, Ch. 6 ( P. 205-231)
Group Presentation and Evaluation

Suggested Readings

Compulsory:

Mergers, Restructuring & Corporate Control by J. Fred Weston,

Kwang S. Chung and Susan E. Hoag (Prentice Hall India)
Takeovers, Restructuring and Corporate Governance by J. Fred
Weston, Kwang S. Chung and Juan A. Siu (Prentice Hall)
Valuation by Aswadh Damodaran (John Wiley)
Financial Management- MY Khan and PK Jain Tata Mcgraw
Hill.Mergers, Acquisitions and Takeovers- H.R. Machiraju, New Age
International (P) Ltd.
Mergers, Acquisitions and Corporate Restructuring by Prasad g.
Godbole-Vikas Publishing House (P) Ltd.
Corporate Restructuring-Enhancing Shareholder Value Ranjan Das
and Udyan Kumar Bose- Tata Mcgraw Hill .
Mergers ,Acquisitions and other Restructuring Activities- Donald M.
DePamphilis-2010
By Elsevier Inc.

References:

Mergers et.al Issues ,Implications and Case Laws by S.Ramanajum

(Tata McGrow Hill)
Mergers & Acquisitions of Companies by P. Mohan Rao (Deep &
Deep)
Readings in Mergers & Acquisitions by Patrick Vaughan (Blackwell)
Corporate Finance: Theory & Practice by Aswath Damodaran ( John
Wiley)

30

Exploring Corporate Strategy by Garry Johnson & Kevan Scholes

(Prentice Hall India)
Cartwright, Sue and Cary L. Cooper (1996), Managing Mergers,
Acquisitions and Strategic Alliances: Integrating People and
Cultures,Butterworth- Heinemann Ltd., Second edition.
Beckley, Peter J and Pervez N Ghauri (2002), International Mergers
and Acquisitions- A Reader, Thomson.
Case Studies on Mergers and Acquisitions (2004), ICFAI Center for
Management Research.
Advanced Corporate Finance Chandrasekhar Krishnamurti and S.
Vishwanathan PHI Learning(P) Ltd.
Mergers and Acquisitions from A to Z Andrew J Sherman and
Milledge A Hart.
Valuation-Measuring and Managing the Value of Company Mckinsey
and Co, Tom Copeland ,Tim Koller.
Law and Practice of Mergers and acquisitions Jayant M Thakur Snow
white Publishers
Corporate Mergers, Amalgamations and Takeovers-J.C.Verma
Bharat Publishing House

Course: Enterprise Risk Management

INTRODUCTION
Risk Management has emerged a specialized area of management contributing to the value
maximization process of organizations. Risk Compliance and reporting is an integral part of
the financial statements apart from the prime responsibility of boards towards stakeholders.
Global financial crises and turbulence has accentuated the need for a sophisticated risk
management system in all businesses including corporations. Future managers need to
understand how corporations make use of the insights and tools of risk management in
holistic manner.
OBJECTIVE
The objective of this course is to develop an integrated approach to measuring and managing
all risks directed towards value maximization. The course lays emphasis on specific risks of
businesses and apprises with the emerging technologies in current business environment.
SESSION PLAN

31

Session No.
Part I
1-5

Readings (as listed below)

Topic/Theme

Introduction to Risk
Risk-Defined, Risk vs. Uncertainty, Importance of # Erick Banks- Ch. 2
Risk, Types of Risk, Risk for Business and # Hampton Ch. 12-18
Individuals, Risk Management by corporations, # Christopher Culp Ch. 10
Risk Perception, Risk Culture and RM Business
Models, Exceptions
Case Lets: Daimler and Chrysler, Weban and
Philips,Nokia and Erickson, Global Portfolio

Part II
6-9

Risk Management Process & Strategies

RM process, Risk Matrix, Risk Mapping, Risk # Shimpi Ch. 4
Focus, Changing Face, Risk and Business Strategy, # Shimell Ch. 21
Risk Assessment, COSO Framework
Case Study: Southern Airlines Case

Part III
10-15

Risk Management Tools & Techniques

Risk Assessment, Risk Quantification

# Merna and Thani Ch. 4

Methodologies Mathematical and Statistical

Measures, Comparative Analysis
Part IV
15-22

Case Study: Sesa Goa Ltd.

Risk Management Systems - Implementation
Implementing ERM Strategic Issues, Defining # Hopkin Ch. 7-10
RM Policy, Roles and Responsibilities, RM
Documentation, Risk Architecture and Structure,
RM technologies - monitoring, evaluating, and
improving the effectiveness of risk management
systems

and

processes;

Integrated

Risk

Management - global outlook, prospects and

challenges.
Part V

Case Study: Chase Manhattan

Levels of Risk Management in Corporations

32

23-31

Risk Management at Corporate, SBU and Project

# Merna and Thani Ch. 7-9

Levels, Model Risk Organization {Case

Presentations}
Part VI
32-36

Case Study: Idea Cellular, Airtel, NHPC

RM Applications & Perspectives
# Shimpi Ch. 8,9
Portfolio View of Risk, RM in Insurance
Companies, Banks, Manufacturing Organizations, # Hopkin Ch. 18-20
BCM, Run-offs and Contingent Capital, Corporate
Governance, Stakeholders Management

READINGS
Books
Shimpi
Prakash A. Shimpi, Integrated Corporate Risk Management (2001),Texere
LLC., NY.
Hampton
Hampton John J. (2009), Enterprise Risk Management, AMACOM.
Culp
Shimell
Merna &
Thani

Culp Christopher L. (2001), The Risk Management Process, John Wiley &
Sons.
Shimell Pamela (2002), The Universe of Risk, Pearson Education.
Merna Tony and Faisal F. Al-Thani (2008), Corporate Risk Management,
John Wiley and Sons.

Hopkin
Lam

Hopkin Paul (2010) , Fundamentals of Risk Management, Kogan Page.

James Lam (2003), Enterprise Risk Management: From Incentives to
Controls, Wiley Finance Series.

Erick Banks
Erick Banks and Richard Dunn (2003), Practical Risk Management, John
Wiley and Sons
Research Papers
#

ERM-Theory and Practice

33

Use Of Cash Flow at Risk Reports in Making Intelligent Hedging Decisions

Risk Measurement: An introduction to Value at Risk

Integrated Risk Management with Cash Flow at Risk/Earnings at Risk methods

LIST OF EXERCISES
1. Read the risk mapping cases and map the risk for Southern off Airlines Case
2. Analyze the financials of Sesa Goa Ltd. and compute profit at risk.
3. Read the applications of VaR.

TERM PAPER
Students in-group shall be undertaking the case of any company, analyze its financials,
business models, and other information. On that basis perform a risk analysis
comprising of risk maps, strategic risks, risk methods used and critical summarizations.

PEDAGOGY
The teaching methodology will be a blend of lectures, real live cases and discussions and
presentation by students. Every student has to carry out exercises listed above. The case
presentations would help the students to learn experiences of the past and help them to build
portfolio strategies in real life. A group of 5-6 students would write a term paper and present
in the class. The purpose of the group term paper is to provide students with a vehicle for
creative thinking and study in the field of corporate risk management. The term paper will
provide an opportunity to critically analyze the issue in the listed topics, which would build
strong conceptual base for the course and would enable students to relate to the practice.
Carefully written term papers will synthesize, clarify and illuminate a large part of the course
curriculum.
GRADING POLICY

Assignment (Individual)

15%

34

Term Paper (Group)

15%

Case Presentation (Group)

20%

End Term Examination

50%

35