GUJARAT TECHNOLOGICAL UNIVERSITY
 MBA - SEMESTER (03) - EXAMINATION - SUMMER 2016
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Subject Code:2830502 Date: 06/05/2016Subject Name: International Finance (IF)
Time: 10.30 AM TO 01.30 PM Total Marks: 70
Instructions:
- Attempt all questions.
- Make suitable assumptions wherever necessary.
- Figures to the right indicate full marks.
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| Q. No. | Question Text and Option | 
|---|---|
| Q.1 (a) | Objective Questions A standardized forward contract is called A. Future B. Netting --- Content provided by FirstRanker.com ---C. Swap D. Option | 
| Q.1 | Which of the following Letter of credit (LOC) doesn’t require any document accompanying it? A. Unconfirmed LOC B. Back to back LOC C. Clean LOC D Revolving LOC | 
| Q.1 | LIBOR is the A. Deposit rate in B. Interest rate in Eurocurrency Market European banks --- Content provided by FirstRanker.com ---C. Interest rate in D. Deposit rate applicable to interbank loans Eurobond market within London | 
| Q.2 | is a time draft on and accepted by one bank on another one. A. Corporate Guarantee B. Bill of lading C. Bank guarantee D. Banker’s acceptance | 
| Q.1 | The exchange of foreign currency exposures is called A. Put option B. In the money --- Content provided by FirstRanker.com ---C. Forward D. Swap | 
| Q.1 | An Industrial unit which offers entire production for export is called A. EOU B. Industrial estate C. EPZ D. FTZ | 
| (b) | 1. In the money option 04 2. Arbitrage 3. Purchasing power parity --- Content provided by FirstRanker.com ---4. Options | 
| (c) | What are the factors affecting cross border merger and acquisition? 04 | 
| Q.1 | (a) Define Future Contract and explain the difference between Forward Contract and Futures Contract? 07 (b) Explain the role of WTO in international Business? 07 OR | 
| Q.2 | Explain Export finance and help the exporter? 07 | 
| Q.3 | (a) What is Exposure? Explain the types of exposure in international business? 07 (b) What are multinational corporations (MNCs) and what economic roles do they play? 07 OR | 
| Q.3 | (a) Which factors should be considered by an investor before investing in another country? 07 --- Content provided by FirstRanker.com ---(b) Explain the types of services provided by International Banks to their customers? 07 | 
| Q.4 | (a) Explain Balance of payment? Discuss its implications under the fixed and flexible exchange rate regime? 07 (b) If the interest rate in US is 10%, in Japan the comparable rate is 7%. The spot rate for the yen is $ 0.0038.If the interest rate parity holds, what is 90day forward rate? 07 OR | 
| Q.4 | (a) An investor wishes to buy euro spot (at $0.9080) and sell euros forward for 180 days (at $0.9146). 07 1. What is the swap rate on euro? 2. What is the premium on 180-day euros? --- Content provided by FirstRanker.com ---(b) What is Transaction Exposure? Explain in detail with example. 07 | 
| Q.5 | Suppose the spot quote on the Deutsche mark is $0.3302-10 and the spot quote on the French Franc is $0.1180-90 14 a. What is the direct quote for the franc in Frankfurt? b. Compute the percentage bid-ask spread on the DM and franc. OR | 
| Q.5 | Explain the objectives of Cash management. If an Indian Company has to manage its cash which factors should be considered? 14 | 
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