Bachelor of Management Studies (B.M.S.) SEM VI 2019 20 Oct 2019-20 ELECTIVE FINANCE INTERNATIONAL FINANCE Question Paper - Mumbai University | munotes

Questions asked in this paper

• 2) Figures to the right indicate full marks

1. Q1 Attempt any two Questions:
   • a) What is International Finance? Discuss its significance. (7.5)
   • b) Explain the features of Bretton Wood System. (7.5)
   • c) The following quote is given (7.5) Identify the country in which the quote is direct Find the mid rate, spread and spread percentage Calculate the inverse quote
2. Q2 Attempt any two Questions:
   • a) The following data is available to decide on the best alternative for investing INR 20 (7.5) Million for a temporary period of six months on a risk free basis. Exchange rates are
   • c) Discuss the PPP theory in detail. (7.5)
3. Q3 Attempt any two Questions:
   • a) What is FDI? How is it different from FPI? (7.5)
   • b) Discuss the origin and growth of Euro Currency Market. (7.5) What are Depository Receipts? Explain ADR and its levels or types. (7.5) Attempt any two Questions:
   • a) What are the factors affecting risk in foreign exchange? (7.5)
   • b) What are benefits of Tax Havens? (7.5)
   • c) Suhas Ltd. is considering investing in a project requiring a capital outlay of Rs. (7.5) 2,00,000. Forecast for annual income after tax is as follows: Depreciation is 20% on Straight Line basis. Evaluate the project on the basis of NPV taking 14% discounting factor and advise whether Suhas Ltd. should invest in the project or not. The present value of Re. 1 at 14% discounting rate are 0.8772, 0.7695, 0.6750,
   • 0.5921 and 0.5194
   • a) Case Study: India’s current account deficit (CAD) stood at US$ 15.8 billion (2.4 per cent of GDP) in
4. Q1 of 2018-19 as compared with US$ 15.0 billion (2.5 per cent of GDP) in Q1 of 2017
   • 18. The widening of the CAD on a year-on-year (y-0-y) basis was primarily on account of a higher trade deficit at US$ 45.7 billion as compared with US$ 41.9 billion a year ago Net services receipts increased by 2.1 per cent on a y-o-y basis mainly on the back of a rise in net earnings from software and financial services. Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 18.8 billion, increasing by 16.9 per cent from their level a year ago In the financial account, net foreign direct investment at US$ 9.7 billion in Q1 of 2018 19 was higher than US$ 7.1 billion in Q1 of 2017-18. Portfolio investment recorded net outflow of US$ 8.1 billion in QI of 2018-19 — as compared with an inflow of US$ 12.5 billion in QI last year — on account of net sales in both the debt and equity markets Answer the following questions:
   • (1) What was the Current Account Deficit in of 2018-19? What was the reasoning behind the widening of this CAD? (2.5)
   • (2) What are private transfer receipts? In which account are they recorded in BOP?
   • (3) What is the recorded status of FDI and FPI in Q1 of 2018-19? (2.5)
   • (4) What are the benefits of Portfolio investments? (2.5)
   • b) Solve the following: Calculate AFM and interpret the results 5

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