Bachelor of Management Studies (B.M.S.) SEM VI 2018 19 May 2018-19 FINANCE INTERNATIONAL FINANCE Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 All questions are compulsory subject to internal choice
2. Q2 Figures to the right indicate full marks
3. Q3 Use of simple calculator is allowed
   • (a) Fill in the blanks by choosing the right option (any 8): 8
   • (1) Reserves are held in following forms except . (Foreign Currency, SDR, Silver)
   • (2) Under there is interference of monetary authorities to decide exchange
   • (5) The project is financially viable if NPV is . (positive, negative, zero)
   • (6) is known as secrecy jurisdiction. (Tax haven, Transfer pricing, foreign
   • (7) risk also called as “Accounting exposure”. (Transaction, Economic,
   • (8) is a type of security listed in Luxemburg. (ADR, GDR, IDR)
   • (9) An option giving the buyer of the options the right but not the obligation to buy a currency iS . (call option, put option, forward option)
   • (10) Difference between the value of merchandise exports & imports is . (BOP, BOT,
4. Q1 (B) State whether the following statements are True or False (any 7): FDI is recorded in capital account of Balance of payments 7 marks
   • (2) Under fixed exchange rate system value of currency is decided by market forces of
   • (3) Spread is bid-ask
   • (4) Hedging means protecting the business from risks
   • (5) Standardized contract terms are used in Forward contract
   • (6) A Euro bond is an international bond denominated in a currency not native to the country where it is issued
   • (7) Sensex includes 30 largest & most actively traded stocks in BSE
   • (8) Entry & exit of FDI is more difficult compared to FPI
   • (9) There is lot of transparency in tax havens
   • (10) AFM stands for Arbitrageur’s Forward Margin
   • (A) Explain the concept of International Finance and discuss the emerging challenges in 8
   • (B) State the difference between fixed and flexible exchange rate system. Calculate outright forward rate for 1 month & 2 month Calculate outright forward rate for 45 days 7
   • (A) Briefly describe the structure of Indian foreign exchange market. 8
   • (B) Explain various types of currency derivatives. 7
   • (P) The following quote is given by a bank in Mumbai: e Is this quote “Direct” or “Indirect” in Mumbai? e Calculate Mid-rate, Spread and Spread % e Find the inverse quote 8
   • (Q) From the following data decide on the best alternative for investing INR 10 Million for a temporary period of 6 months on risk free basis. Ignore transaction cost 7
   • (A) Discuss any two types of Euro Bonds in detail. 8
   • (B) Describe various types of capital budgeting techniques. 7
   • (P) The following quotes are given in US: And the given quote in Australia is: 8
5. Q1 Derive the quote GBP/AUD from the set of quotes given in US
   • ii) Compare the derived GBP/AUD quote with the quote given in Australia and find arbitrage if any on Million GBP
   • (Q) From the following given details calculate NPV. Required Rate 10%. Expected Life (No salvage value): The present value of Re. | at 10% discounting rate are 0.909, 0.826, 0.751, 0.683, 0.621 7
   • (A) What are different types of foreign exchange risks faced by firms? 8
   • (B) Describe the objectives of taxation. Write Short Notes on (any three) (15) 7
6. Q5 Tax havens

Read from the scan above, so a character or two may differ. The scan is the original.