FIRST SEMESTER

MBA130

INTERNATINONAL FINANCE MANAGEMENT

University Examination

: 70 Marks
Continuous Internal Assessment
: 30 Marks
Maximum Time: 3 Hrs
Total Marks: 100
Minimum Pass Marks : 40%

Instructions for candidates

1. Candidates are required to attempt one question each from sections A, B, C and D of the
question paper and will carry 14 marks each. Candidates have to attempt at least one
question compulsory from each section.
2. section E will comprise of 10 short answer type questions, which will cover the entire
syllabus and will carry 14 marks candidates will have to attempt any seven questions .

SECTION A

114=14

1. Explain the concept of Balance of Payments (BOP). and discuss the different
accounts of BOP. Can a country run a current account deficit (surplus) indefinitely?
Give reasons.

2. Discuss pre-shipment and post-shipment financing. Discuss the procedure followed by the
commercial banks in this regard.
SECTION B

114=14

1. Distinguish between 'Foreign direct investment' (FDI) and 'Portfolio Investment'

and discuss the different strategies of portfolio investment.

2. What do you understand by foreign exchange risk? What are the different external exposure
management techniques which are used by importers and exporters?
SECTION C

1. a) Briefly discuss the centralized cash management system and its advantages.

114=14

b) What do you understand by special drawing rights (SDRs)? Discuss its significance in
international Finance.
2 a) how are inflation rates and foreign exchange rates related? Illustrate with the help of an
example.
b) Differentiate between accounting exposure and economic exposure. Discuss the principal
translation methods of 'Foreign Subsidiaries accounts'.
SECTION D

114=14

1. Write short notes on any four of the following:

a) Irrevocable confirmed letter of credit

b) Syndicate euro currency loan market
c) Transfer pricing
d) International development association (IDA)
e) Foreign currency accounts of non resident Indians
2.(a.) Identify the factors which are to be taken into consideration by the countries, which seek to
make use of foreign capital on their terms.
b) "The International economy is fast turning into a borderless global economy" Critically
analyze in relation to International Financial system.
SECTION E

27=14

1. What do you mean by 'Foreign Exchange Market'?

2. Explain briefly and illustrate with an example, the chain method of making out cross rates.
3. Explain the need for foreign exchange exposure management
4.Define 'Letter of credit'.
5. Explain briefly the different types of policies offered by the Export credit guarantee
corporation to provide cover for shipments made on a short-term credit.
6. "In the absence of a common currency throughout the world, a series of problems arise in
International cash management." What are these problems? How can these problems be
overcome?
7. Explain the need for an the advantages of centralised cah management for a company which is
involved in international business.

8. Explain the globalisation of financial markets.

9. What is the role of a factor in foreign trade?
10. What are bills of lading and how do they facilitate trade financing?