BCom In Accounting & Finance (BCAF) SEM V 2022 2023 Dec 2023 INTERNATIONAL FINANCE Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 (A) Multiple Choices Question: (Any Eight) 8 marks
   • 1. Spot price of a stock is 1100. Risk free interest rate is 5%, fair value for a 9months contract is
   • 2. In diagonal spread of options, strike price is
   • a) different c) cannot be determined d) no relationship
   • 3. A is your account of your money, held by us
   • a) b) c)Loro d) None of these
   • 4. 100 INR= JPY 175- it is a direct quote for
   • a) India b) Japan c) USA d) None of these
   • 5. Using Future contracts to transfer price risk is called
   • 6. In Holgate principle, if Bid > Ask, Swap Points for forward rate are to be
   • 7. is based on the concept of “Law of one Price”
   • a) IRP Theory b) PPP Theory c) Fishers Parity Theory d) none of these
   • 8. spread of options, strike price is
   • a) Same_b) different c) cannot be determined d) no relationship
   • 9. The risk that a government may default on its debt obligation
   • 10. Interbank market deals are conducted mainly over the
   • a) telephone d) courier
2. Q1 B. Answer whether the below statements are true or false (Any seven) 7 marks
   • 1) Short position is taken by option seller
   • 2) Premium on base currency is always deducted from the spots rate
   • 3) Time value of an option can be negative
   • 4) Bid quote is the price at which the exchange dealer is ready to buy the currency
   • 5) According to Prof. Fisher, nominal rate of interest depends on inflation rate
   • 6) Economic risk is difficult to quality
   • 7) There is very less transparency in forex trading
   • 8) Nifty includes stocks of 30 blue-chip companies
   • 9) Basis is futures price minus spot price
   • 10) Forward contracts can be closed prior to delivery
3. Q2 (B) From the following information calculate each case: 7 marks
   • a) Spread MID rate and % spread
   • b) Calculate the implied inverse quote
   • ii) INR 65.9985 - 15
4. Q2 (C) Define International Finance. What are the merging challenges in International
5. Q2 (D) Write a note on the Purchase Power Parity. 7 marks
6. Q3 (B) Arjun buys a February Call option at a strike price of Rs. 600. If the spot price of the underlying asset in February is as follows:
7. Q3 (C) Define foreign exchange market. Explain its characteristics 8 marks
8. Q3 (D) Explain the internal techniques of managing foreign exchange risk. 7 marks
9. Q4 (A) Who are the Participants of Foreign Exchange Market? 8 marks
10. Q4 (B) Explain the different functions of Foreign Exchange Market. 7 marks
11. Q4 (D) Given: Identify and calculate arbitrage profit 7 marks
12. Q5 (A) What are the factors affecting change in exchange rate? 8 marks
13. Q5 (B) Distinguish between Translation Risk & Operating Risk. 7 marks
14. Q5 (C) Short Notes (Any three). 15 marks
    • 1. Option Contract
    • 2. Globalization of World Economy
    • 3. Underlying Asset
    • 4. Forward Rates
    • 5. Vostro Account

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