Bachelor of Management Studies (B.M.S.) SEM VI 2017 18 Nov 2017-18 INTERNATINAL FINANCE Question Paper - Mumbai University | munotes

Questions asked in this paper

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1. Q1 (A) Explain what are autonomous and accomodating capital flows? 7.5
   • (B) Explain the difference between arbitrage and speculation. 7.5
   • (C) USD AED Spot is 6.6023/6.6666. Find the spot rate the Spread, Spread %, mid-rate and inverse quote. 7.5
2. Q2 (A) Following are the options to borrow 10 million INR for a period of 3 months. 7.5
   • (B) EUR/AUD spot rate is 2.6128. Three months forward rate is 2.2000. Find the AFM. 75
   • (C) state difference between fixed and floating exchange rates. 7.5
3. Q3 (A) Write note on Euro Currency Markets and their origin. 7.5
   • (B) Explain the issuance procedure for GDR. 7.5
   • (C) Explain the difference between FDI and FPI. 7.5
4. Q4 (A) Write brief note on role of FEEDAI
   • (B) Explain transaction risk. How do companies protect themselves against transaction risk
   • (C) Write note on role of BIS (Bank of International Settlement)
5. Q5 (A) Spot USD/INR rate is: 62.1234. Six month forward rate is 62.8834. Interest rate in USA is 2% per annum and interest rate in Indiais 8% per annum. Find arbitrage opportunity (if any) on one million 5 marks
   • (B) Case study: India posted a current account deficit (CAD) of $3.4 billion, or 0.6% of gross domestic product (GDP), in the October-December quarter as per data released by the Reserve Bank of India (RBI) The CAD in the second quarter was higher than the first quarter (April-June) CAD of 0.1% of GDP but lower than the same quarter (July-September) a year ago at 1.7% of GDP. The contraction on a year-on-year (y-o
   • y) Basis was primarily on account lower trade deficit ($25.6 billion) brought about by a larger decline in merchandise imports relative to exports India’s merchandise exports and imports turned positive in September and October after consistently decline since December 2014-barring in June-because of Sluggish global demand and low commodity RBI had to continuously intervene during last two quarters in order to defend value of rupee
   • (i) What is current account deficit? 2.5
   • (ii) What is balance of Trade? 2.5
   • (iii) What is meant by RBI intervention? 2.5
   • (iv) As per the case study what is the current status of CAD? 25

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