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IBO-06 June, 2013 International Business Finance

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June, 2013

IBO-06 : International Business Finance

1. "Devaluation is the most effective remedy for correcting an adverse balance of payments position" Critically examine this statement .

2. Discuss the rationale of Regional financial institutions. Have they succeeded in achieving their objects ? Explain the working of any one of them.

3. What are the 'Foreign Exchange Markets', their participants and the roles they perform ?

4. How does tax policy impact foreign investments ? Do accounting practices of countries have any influence on it ? Discuss.

5. Under each of the following scenario, whether the value of rupee in relation to apanese Yen will appreciate, depreciate or remain the same ? Assume exchange rates are free to vary and other factors remain constant.

(a) Growth rate of national income is higher in India than in Japan.

(b) Inflation in India is higher than in Japan

(c) Prices in India and Japan are raising at the  same rate.

(d) Real interest rates in India are higher than in Japan.

(e) India imposes new restriction on Indian companies acquiring foreign companies and investing is real estate abroad.

6. Define yield curve. How is it constructed ? How does interest rate risk influence the yield curve ?

7. Appraisal of international projects is more complex than the domestic projects. Do you agree with the statement. If so ? If not, why not ? Give reasons supports by illustrations.

8. Distinguish between :

(a) Translation and Transaction currency risks

(b) Forward contract and Forward Rate Agreements

OR

      Future of options.

9. Write short notes on any two of the following :

(a) Transfer Pricing

(b) Economic Exposure

(c) Forfeiting

(d) Pre-shipment Credit. 

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