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International finance Management
1. ‘‘Centralized cash
management is a double – edged sword for international working capital
management’’ – Discuss.
2. ‘‘Balance of payments always balances’’ –
Comment.
3. How does the international
Monitory fund raise the resources ? What are special drawing rights? Breifly
explain the funding facilities provided by IMF to its member countries
4. How does international
financial system differ from domestic financial system?
5. What is infra-corporate
transfer of fund? Explain the variable that influence intra corporate transfer
of funds.
6. Explain purchasing power
parity and reason for its deviation. Also discuss its applications.
7. Critically examine the
impact of developments in the emerging foreign exchange markets.
8. Consider the following data
Exchange Rate $
Interest Rate £ Interest Rate Spot 1 $ 1,5753/ £ -
-
1 month $ 1, 5623/ £ 3% p.a
8.5% p.a 3 months $ 1, 5577/ £ 3.5%
p.a 7.5% p.a 6 months $
1.5536/ £ 3.5% p.a 7% p.a
1)Find out the arbitrage possibilities for various
periods.
2) Show how interest rate parity will be restored as
a result of arbitrage activities.
9) You are setting up a project in USA. The
estimated NFV is $12 million. Your finance officer started in the report that
he has not accounted for foreign exchange risk. He felt that with such a large
NPV, the project should be accepted since even a risk adjusted NPV would likely
be positive. You have the final decision as to whether to accept or reject the
project. What is you decision? Calculate the following rates into outright
rates: ii) Indicate their spreads
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