DU SOL M.Com Question Paper 2nd Year 2018 Sem 4 International Financial Management

'Ihis question paper contains 3 printed pages]
Your Roll No.

M.Com. : SEMESTER-IV (OC) G
INTERNATIONAL FINANCIAL MANAG EMENT
Paper 7l 12

Tinte : 3 Hours Maximum Marks : 100
(ll'rite your Roll .No. on the lop imnediatell' on receipt of thts que.stion paper.)

Attempt a// questions.

l// questions carry equal marks.
What is IMF Conditionalities ? Explain the different funding
facilities through which IMF provides balance of payment support
to member countries. n
Or

(a) Why is it important to study International Finance ? What
determines the globalization of nations and firms ? l0

(b) What do you understand by Crawling Peg ? "Crawling
peg is a compromise between fixed exchange rates and
floating exchange rates". Discuss. l0

2. (a) Consider the data given below :

Home Country : India

Foreign Country : U.S.

Spot Rate (Rs/$) : 62

6 mths forward rate : 63
P.T.O,

(2) 4148

lnterest rate in India
: l2oh P'a'

Interest rate in U.S.
: l0% P'a'
l0
Find the arbitrage gain'

Power Parity' Based on
(b) Explain the theory of Purchasing

this theory what is general forecast
of the values of

currencies in highly inflated countries
? l0

0r

following quotes for
(a) A foreign exchange trader gives the
two months and three
the Rs. lzs. dollar spot, one month'

months to a US based treasures
:

62.32162.s3
Spot rate (Rs/$)

0.05/0.09
One-month forward

0.07/0.03
Two-months forward

Three-months forward
0'08/0'06

one' trvo and three month
Calculate the outright quotes for

forward.A|socalculatespreadandspreadpercentage
for these periods'
(based on selling as well as buying price)
l0

What is arbitrage ? What are
the various types of
(b)
t0
arbitrages ?

(3)
Budg-
cashflorvs in lnternational Capital
llow do you compute in
reference to the complexities involved
eting ? Explain with n
Budgeting 2
lnternational capital
Or

the structure
Euro-Banking ? Explain
(c) What is meant by

of Euro-Banking'
put options and
that affect Currency
(b) What are the taitors
t0
CttrrencY call oPtions
?
of lnternational workin* "uPtt;
(a) What are the objectives
management
management ? How
by Currency risk
(b) What do you mean
10
manage currencY
risk ?
do You
Or

Transfer prices
by Transt'er Pricing ? How are
What do you mean n
set ?
: 10'10
an1 nvo of the following
Write short notes on

(a) Political Risk

of Exchange Rates
(b) Brettenwoods System

(c) lnternational Accounting'

100