1. Investment Decisions, Project Planning and Control - 10%
Measuring Cash Flows, Discounted Cash Flow Technique for Project Evaluation
NPV and IRR - Conflict and Resolution, The Modified Internal Rate of Return (MIRR), Comparing Projects with Unequal Lives, The Concept of Abandonment Value, Modified Accelerated Cost Recovery System (MACRS)
Inflation Adjusted Cash Flow Forecasting in Capital Budgeting
Capital Rationing for Divisible and Non – divisible Projects (with Application of Integer Programming)
Social Cost Benefit Analysis
2. Evaluation of Risky Proposals for Investment Decisions - 10%
Risk Analysis in Capital Budgeting - Certainty Equivalent Approach, Risk Adjusted Discount Rate, Expected NPV, Standard Deviation of NPV and Use of Normal Distribution, Decision Tree Analysis, Options in Capital Budgeting
Sensitivity Analysis
Scenario Analysis
Monte Carlo Simulation
3. Leasing Decisions - 2.5%
Lease Financing – Evaluation of Lease vs. Buy Options
Break-Even Lease Rental Determination and Implicit Rate
Cross Border Leasing, Sale and Lease Back
4. Securitization - 2.5%
Definition and Concept and Benefits of Securitization
6. Equity and Bond Valuation and Evaluation of Performance - 7.5%
Equity Valuation - Discounted Cash Flow Based Valuation, Relative Valuation using Multiples and Weights
Bond Valuation - Prices & Yields
7. Mutual Funds - 7.5%
Meaning, Advantages and Disadvantages, Structure and Types
Regulations
Computation of NAV
Evaluation of Performance and Movements in Security Values and NAVs of Mutual Funds for Investment Decisions: Perspective of AUM Managers and Individual Investors
ETF, REIT, InvIT
8. Portfolio Theory and Practice - 3.8%
Portfolio Return and Risk, Systematic and Unsystematic Risk, Diversification strategies (Naïve vs the Markowitz Model)
Optimal Portfolio, Efficient Frontier, Capital Market Line
Principles of Asset Allocation, Active and Passive Asset Allocation
9. Asset Pricing Theories - 3.8%
Single Factor and Multifactor Asset Pricing Theories: CAPM and APT
Concepts and Applications (including Levered Beta and Unlevered Beta)
10. Portfolio Performance Evaluation and Portfolio Revision - 3.8%
Conventional Performance Evaluation
Market Timing and Style Analysis
11. Efficient Market Hypothesis - 3.8%
Definition
Forms of Market Efficiency
Implications
SECTION C: FINANCIAL RISK MANAGEMENT [20%]
12. Risks in Financial Market - 10%
13. Financial Derivatives – Instruments for Risk Management - 10%
Introduction to Financial Derivatives
Forward and Futures – Meaning and Difference, Pricing, Stock Futures, Index based Futures, Hedging through Futures
Options
Meaning, Features and Types of Options, Option vs. Forward and Futures, Profitability of Option, Profit Profile of Buyer and Seller, Value of Option, Determination of Option Premium
Option Strategies
Put-Call Parity Relationship, Valuation of Options using Binomial Tree Approach and Black-Scholes Model, The Greeks
Swaps
Meaning, Features, Types, Benefits of Swaps
Interest Rate Swaps, Credit Default Swaps
Interest Rate Derivatives – Forward Rate Agreement, Interest Rate Futures and Options, Caps, Floors and Collars
SECTION D: INTERNATIONAL FINANCIAL MANAGEMENT [15%]
14. The International Financial Environment- 5%
International Financial Institutions and Markets
Sources of Foreign Currency
15. Foreign Exchange Market- 5%
Introduction – Structure of Foreign Exchange Market
Foreign Exchange Rate – Meaning, Determinants, Equilibrium Exchange Rate, Exchange Rate Quotations – Meaning, Direct vs. Indirect Quote, American vs. European Quote, Bid-Ask Rate and Spread, Cross Rates
Segments of Foreign Exchange Market – Spot Market (including two and three-point Arbitrage), Forward Market
Foreign Currency Derivatives
Currency Forwards
Currency Futures
Currency Options
Currency Swaps
Parity Relationships
16. Foreign Exchange Risk Management- 5%
Transaction Exposure
Translation Exposure
Operating Exposure
SECTION E: DIGITAL FINANCE [5%]
17. Digital Finance- 5%
Meaning, Traditional Finance vs. Digital Finance
Digital Finance Ecosystem –
Digital Infrastructure
Digital Money – Cards, Central Bank Digital Currency
Digital Assets – Non-Fungible Tokens, Private Cryptocurrency, Stablecoins
Digital Financial Services – Wallets, UPI, Neo-Banks, FinTech
Regulation and Governance in a Digital Finance Environment
