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What is GDR'/ Write short note on "Correspondent Bartk". What are various International Business Methods?

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$0.024.47 9 181, 3 I 5, 8ll (03 Marks) What does this mean in term of dollar per Euro? (07 Marks) Briefly discuss the various techniques to elirninate economic exposure. An MNC has account receivables of $l.B billion and account payable of $940 million. It also has borroweC $700 million. The current spot rate is $ I .81381f.. What is the MNCs dollar transaction exposure in dollar tenns? (ii) What is the exposure in pound terms? (iii) Suppose the pound appreciates to $2.11221f.. What is MNC gain or loss. in pound terms on its dollar transaction (10 Marks)

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a. The foreign exchange trader has given follor,ving quotation for spot, one month and 3 nr.onth

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(03 Marks) What do you mean by Intemational Monetary System? (07 Marks) Explain the rationale behind purchasing power parity. From the following information prepare BOP and suggest how it can be put to equilibrium using office reserve I U! Do 4L

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Max. Marks:100 Note: l. Answer nnJ) THREEfull questionsfrorn Q,No.l to 6. 2. Q.No. 7 & I sre compulsCItrJl. 3. Use of PV tables is permitted.

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Companies A and B has been offered the following rates per annum on a $ 20 mitrlion five year loan. Fixed Floating Company A t3% L +0.3% Company B t 4.s% L + A.5o/o Company A requires a floating rate loan. Company B requires fixed rate loan. Design a swap that will net bank acting as intermediary A.2% pa and will appear equally attractive to both the cornpanies. (10 Marks) For More Question Papers Visit www.pediawikiblog.com I of 2

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What is direct ancl indirect quotation'/ Give example. (03 Marks) Discuss objective anci functions of rvortrd bank. (07 Marks) Moeiern Pharma Ltd. an Inciia.n based MNC is evaluating an overseas investment proposal the project requires initiai outiay of US $ 100 rniilion and it is expected to give cash flows over a llfe of four years. 4

CF ($ in million 30 4A 50 60 The current spot exchange rate is {45 fbr {.-r > $ the risk 1i'ee rate of interest in India is I I % and in US 6%. 'fhe Modern Pharma requires a rupee return of 159/o on the above project. Calcuiate the NPV of project under home currency. (10 Marks)

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a. It is given that Dotlar 6 month T bills 7a/o risk free 5 months Japanese bond : 6.50/o. Spot erchange rate I Yen : $ 0.008. What is the 6 month forward exchange rate? (CI3 Marks) b. What is fbreign exchange rate'? What are the factors that afTect foreign exchange rate? (07 Marks)

s. A fbreign exchange dealer has assumed the fbllowing information for a particular

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there any Co',rered Interest Arbitrage Possibiiity (Assunte investor invesr $ 1000000)

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90 day forward rate of C $ : $"69 90 day Canadian interest rate - 5ol, 90 days US interest rate :3.5ato Calculate percentage return if investor used covered interest arbitrage.

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When south Korean expot-t grourth staltred some south Koi:ean firms suggested that south Korean primary export probleni was weakness in Japanese Yen. How would you interpret their statement? (05 N{arks) Explain holv each of the followirig condition woulC be expected to affect the value of Mexican Peso.

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with Peso. Mexico imposes quotas on prcduci imported fioia US. (05 Marks) One executive said that Europe was not considered as a location fbr drect foreigl investment because of Euro's l,alue. [nterpret the statement. (05 Marks) Briefly explain how inflation rate can aflbct equilibrium exchange rate of Japanese Yen's value with respect to that of dollar. (05 Marks)

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Situation i. Mexico suddenly experiences high rate of inflation ii. Mexico interest rate rise while inflation is expected to remain low. iii. Mexico central bank intervenes in the foreign exchange market by purchasing dollars

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An American firm has a EUR 70 raillion I [i0 days payable. Market rates are EUR/USD Spot : 0.8733141 180 days swap :16i1175 EUR interest rate : 3.90'4.1A USD interest rate : 7.9518.A5 Horv rnuch wiil it have to pay if it covers the payable forward? (05 Marks) Flow much will be ttre outflow be if it co''rers via money market? (07 Marks) It is decided to lead the paymeni liow much would it cost? (05 Marks) Can it lead the payment and use a forwart.l cover? How? Will it be equivalent to forward cover?

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(03 Marks)

International Financial Management July 2016 (2012 Scheme).pdf ...

Company B requires fixed rate loan. Design a. swap that will net bank acting as intermediary A.2% pa and will appear equally attractive to. both the cornpanies.

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