BCom In Accounting & Finance (BCAF) SEM V 2023 2024 Dec 2024 INTERNATIONAL FINANCE Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 (A) Multiple Choices Question: (Any Eight) 8 marks
   • 1. An option seller is also known as
   • 2. Using futures contracts to transfer price risk is called:
   • 3. The underlying asset for a derivative contract can be
   • (a) Equity (b) Commodities (c) Interest Rate (d) Any of the above
   • 4. USD 1 Pound sterling is an quote
   • c) Swap d) Forward
   • 5. The indirect quote for 1 GBP = SGD 2.8272 — 82 is
   • 6. 0.7000 — 0.7010 is indirect quotation for
   • 7. The first exchange traded financial derivative in India commenced with the trading of
   • 8. In Holgate Principle, if Bid > Ask, swap points for forward rates are to be
   • 9. India is facing continuous deficit in its balance of payments in the foreign exchange market rupee is expected to
   • a) Appreciate b) Depreciate c) Show no specific tendency d) FEMA
   • 10. Standard Forward Contracts have a maximum duration of months
2. Q1 B. Answer whether the below statements are true or false (Any seven) 7 marks
   • 1) A put option is in-the-money if the current market price of underlying asset is below its strike price
   • 2) An out-of-the-money option will always be exercised
   • 3) Time value of an option is zero at expiration
   • 4) A three-month stock options contract is also known as near month options contract
   • 5) Premium charged is the highest profit that an option writer can earn
   • 6) Inverse quote of INR
   • 8) Foreign Exchange Markets are decentralized
   • 9) LORO account means — ‘their account with you’
   • 10) If Goldman Sachs US Banks has an INR account with State Bank of India it is called
3. Q2 (A) Mr. X has a long position in a two-month futures contract for 4 lots (lot size is 30 shares) of Reliance Industries Ltd. at a price of Rs. 2,560/- per share. What will be his payoff if price per share on settlement date is (a) Rs.2,520/-, (b) Rs. 2,565 or
4. Q2 (B) Classify the following Put Options as (i) In The Money, (ii) At The Money and (iii) Out of The Money and the corresponding option payoff per share (ignore the e Strike price (a) 1,630, (b) 1,640, (c) 1,650, (d) 1,660 and (e) 1,670 (07)
5. Q2 (C) Who are the various participants in Derivative Markets? 8 marks
6. Q2 (D) Explain payoff for a Call option holder and a Put option holder. 7 marks
7. Q3 (A) Mr. X can buy an American call option on the shares of ABC Ltd. with following details on per share basis — You are required to find out arbitrage opportunity and gain per lot, if any, if the lot size is 50 shares. Assume option is settled on delivery basis. (08)
8. Q3 (B) Explain the concept of Put-Call parity. Calculate Spread, MID rate, and % Spread. (08) If AUD interest rate = 3.25% p.a. calculate EUR interest rate. (07) 7 marks
9. Q4 (A) Identify names of respective countries where the following is an Indirect quote and find for each direct quote of that country
10. Q4 (B) What is INR GBP rate?
11. Q4 (C) From the following RS. US $ quotation, Calculate the outright forward quotes Explain whether it is at a premium or discount
12. Q4 (D) What are the factors affecting the exchange rate 7 marks
13. Q5 (A) Define Foreign exchange market. What are the principal characteristics of this
14. Q5 (B) Distinction between Direct and Indirect rates. 7 marks
15. Q5 (C) Short Notes (Any three). 15 marks
    • 1. Hedging
    • 5. Risk and Exposure

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