15MBA3107(F1) MBA15 Reg.

No:

Questions: VELAGAPUDI RAMAKRISHNA

SIDDHARTHA ENGINEERING COLLEGE
1. Where should you invest for better return? (AUTONOMOUS)

2. Assume that the US rate and spot expected return remain as stated M.B.A DEGREE EXAMINATION, NOVEMBER, 2018
above, what forward rate would yield an equilibrium situation? Third Semester
3. Assume the US interest rate and forward rate remain as stated 15MBA3107(F1) INTERNATIONAL FINANCIAL
above, where would you invest if sterling deposit rate is 14% P.A.? MANAGEMENT

***
Time: 3 hours Max. Marks: 60
Part-A and Part-C are compulsory
Answer One Question from each Unit of Part - B
Answer to any single question or its part shall be written at one place only

PART-A
5 x 2 = 10M
Answer any FIVE questions from the following

a. Current account deficit

b. Arbitration
c. Exchange rate risk
d. Purchasing power parity
e. Currency futures contract
f. Netting
g. Gold standard
h. Bid-Ask spread

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 15MBA3107(F1) MBA15 15MBA3107(F1)
PART-B UNIT-IV
5 x 8 = 40M
7. Explain various factors affecting currency exchange rate. 8M
UNIT-I
(or)
1. Define balance of payments and explain accounting components
of balance of payments. 8M 8. What is fisher effect? How it is used in practice? 8M

(or) UNIT-V

2. Discuss about various agencies promoting international trade 9. What is the significance of FDI in development of global trade?
flows. 8M 8M
UNIT-II (or)

3. Give a brief note on Bretton-Woods conference and its proceeding 10. What is country risk analysis? Explain its significance in foreign
developments. 8M investments. 8M

(or) PART-C
4. Briefly explain about European monetary system. 8M
Analyze the following case in not exceeding four pages 10M
UNIT-III Your company has to make $2 million payment in 3 months and
US dollars are available now. You decided to invest them for 3
5. Explain the role and functions of Foreign exchange markets. 8M
months and you are given the following information.
(or) US deposit rate = 8% P.A.
Pound Sterling deposit rate = 9% P.A.
6. Explain how currency futures used in hedging Foreign exchange
rate risk? 8M Spot rate = $1.81/£
3 months forward rate = $1.78/£

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