Bachelor of Management Studies (B.M.S.) SEM VI 2019 20 Oct 2019-20 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) Multiple Choice Questions (any 8): 8
   • (1) The term Euro currency market refers to
   • a) The countries which have adopted Euros as their country,
   • b) the market in which Euro is exchanged for other countries,
   • c) the market where the borrowings and lending of currencies take place outside the country of issue,
   • d) the international foreign exchange market
   • (2) Bond issued simultaneously in several global financial centre is
   • a) Domestic Bond
   • b) Foreign Bond
   • c) Global Bond
   • d) Euro Bond
   • (3) IMF is a firm of
   • a) 190 members countries
   • b) 182 members countries
   • c) 186 members countries
   • d) 183 members countries
   • (4) In a quote exchange rate, the currency that is to purchase with another currency is called
   • a) Liquid Currency
   • b) Foreign Currency
   • c) Local Currency
   • d) Base Currency
   • (5) US dollar denominated bond issued in US domestic market is known as
   • a) Yankee Bond
   • c) Samurai Bond
   • d) Dual Bond
   • (6) IMF is headquartered in
   • c) Geneva Switzerland
   • (7) Japanese Yen denominated bond issued in Japan domestic market is
   • a) Yankee Bond
   • c) Samurai Bond
   • d) Dual Bond
   • (8) An option at the money when
   • a) The strike price is greater than the spot price, in the case of call option
   • b) The strike price is greater than the spot price, in the case of put option
   • c) The option has a ready market
   • d) The strike price and the spot price are the same
   • (9) EURO is the official currency of
   • a) All the states of Europe
   • b) All the states of European Union
   • c) Only 12 of the states of European Union
   • d) Only 10 of the states of European Union
   • (10) contract is an agreement to buy or sell an asset on
   • a) Specified Price
   • b) Specified Time
   • c) Specified Date
   • d) Specified Volume Match the following: (07) in Buropean Capital
   • (A) Describe the scope of International Finance. 8
   • (B) Explain the components of Balance of Payments. 7
   • (P) The following quote is given 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) The following quotations are available in New York: The following quotation is available in Toronto: e From the quotes, given in New York, Calculate the cross-currency quotation for 1 GBP in terms of CAD e Compare the derived GBP/CAD quote with the quote given in Toronto and find the arbitrage gain if any on GBP Million 7
   • (A) What are currency options? Explain its types? 8
   • (B) State the differences between futures and options. 7
   • (P) Following is the GBP/ USD spot rate: 1.2192/1.2290 1 month forward points are: 100/150 3 month forward points are: 300/500 6 months forward points are: 500/800 3 and 6 months outright forward quote Calculate 1 Month AFM and interpret the results 8
   • (A) Discuss the elements of International Equity Market. 8
   • (B) Describe the features of FEMA. 7
   • (P) The following data is available to decide on the best alternative for borrowing INR 5 Million for a temporary period of three months on a risk free basis. Exchange rates are 8
   • (Q) Hinduja Ltd. is considering investing in a project requiring a capital outlay of Rs. 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 Hinduja 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 7
   • (A) Explain the benefits of doing business internationally. 8
   • (B) What are Tax Havens? Explain their advantages. Write Short Notes on (any three) (15) 7
4. Q2 Participants of Foreign Exchange
5. Q4 Fisher Effect
6. Q5 Hedging

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