International Financial Management - 5028 Words

EXAMINATION PAPER OF INTERNATIONAL FINANCIAL MANAGEMENT Section A: Objective type Part One: 1). Foreign exchange market in India is relatively very Answer: b). Small 2). Balance of payment is a systematic record of all ___________ during a given period of time. Answer: c). Economic Transactions 3). Merchandise trade balance, services balance balance on unilateral transfer are the part of _________ account. Answer: a). Current Account 4). Interest rate swaps can be explained as an agreement between ___________ parties Answer: b). Two 5). Capital account convertibility in India evolved in August Answer: c).1994 6). Interest rate parity is an economic concept, expressed as a basic algebraic identity that†¦show more content†¦So, domestic investors can benefit by investing in the foreign market. If domestic interest rates are more than foreign interest rates, foreign currency must trade at a forward premium to offset any benefit of higher interest rates in domestic country to prevent arbitrage. If foreign currency does not trade at a forward premium, or if the forward premium is not large enough to offset the interest rate advantage of domestic country, arbitrage opportunity exists for foreign investors. So, foreign investors can benefit by investing in the domestic market. 2). What are Direct Indirect Quotes of exchange rates? Forex rates in the currency exchange market are displayed in pairs by market makers (or dealers). Exchanges rates on the other hand are forex rates or FX rates that represent the value of one currency in relation to another currency. For e.g., 1USD = 96.62 JPY. This is the exchange rate between the US Dollar and Japanese Yen, which means that 1 US dollar is equal to 96.62 Yen. This would be represented as USD/JPY = 96.62. In other terms a spot exchange rate is one at which currency can be sold or bought for immediate delivery which two business day after the transaction. In spot exchange market the quote for a currency may be direct or indirect. a). Direct Quotes : Direct quote means indicates how many units of localShow MoreRelatedInternational Financial Management5022 Words   |  21 PagesEXAMINATION PAPER OF INTERNATIONAL FINANCIAL MANAGEMENT Section A: Objective type Part One: 1). Foreign exchange market in India is relatively very Answer: b). Small 2). Balance of payment is a systematic record of all ___________ during a given period of time. Answer: c). Economic Transactions 3). Merchandise trade balance, services balance balance on unilateral transfer are the part of _________ account. Answer: a). Current Account 4). Interest rate swaps can be explained as an agreementRead MoreInternational Financial Management9731 Words   |  39 Pagesinflow of foreign currency. a. True b. False ANS: T PTS: 1 93. Forward contracts are the best technique for managing exposure arising from project bidding. a. True b. False ANS: F PTS: 1 94. The currency futures markets are regulated by the International Monetary Fund. a. True b. False ANS: F PTS: 1 95. It is possible to have an opportunity loss when using futures to hedge. a. True b. False ANS: T PTS: 1 96. Margin is used in the forward market to mitigate default risk. a. True b. False ANS:Read MoreMicrosofts International Financial Management: An Analysis1234 Words   |  5 Pagesand innovation. This is a sign of how the firm has established a large international presence around the globe. (Microsoft, 2013) (Fact about Microsoft, 2013) To fully understand what is happening requires focusing on the way the investment banking process assisted them, the regulatory bodies affecting their decisions and identifying / evaluating contemporary issues they are dealing with in international financial management. Together, these elements will highlight how the company was able toRead MoreAs Assessment of Financial Management in International Business2698 Words   |  11 Pagesoperating of financial management in different nations impacts investment decisions with multinational enterprise. Paper describes financial options available to the foreign subsidiary of the multiple enterprises and shows how money management in international business can be used to minimize cash balances, and taxation and introduce us to basic methods of money management. This project is focusing on financial management in the international business, discussing three sets financial decisions suchRead MoreWhy Is It Important For Study International Financial Management?1928 Words   |  8 PagesWhy is it important to study international financial management? In our globalized world, it is crucial for the international companies understand the complexity of the international financial management that shape the size and the rank of each multinational company in a very aggressive competitive market. 2. How is international financial management different from domestic financial management? International finance treats the financial movements on the global scale, while the domestic finance focusesRead MoreInternational Financial Management : Maple Leaf Inc.1831 Words   |  8 Pages INTERNATIONAL FINANCIAL MANAGEMENT MAPLE LEAF INC. INSTRUCTOR: PROFESSOR RAYMOND COX GROUP HEDGER INC SUNKANMI ODUFUWA JERALD ZAKALL Maple Leaf Inc. Method 1 - Unhedged Cross Exchange Rate (Risky) (GBP) 30,000,000 = (GBP)30,000,000 x 1.762(USD/GBP) = (USD)52,860,000 (T=0) (GBP) 30,000,000 xRead MoreEssay about International Financial Management: Key Answers606 Words   |  3 Pageslarge agency problems. 2. Comparative Advantage. a. Explain how the theory of comparative advantage relates to the need for international business. ANSWER: The theory of comparative advantage implies that countries should specialize in production, thereby relying on other countries for some products. Consequently, there is a need for international business. b. Explain how the product cycle theory relates to the growth of an MNC. ANSWER: The product cycle theory suggestsRead MoreThe International Financial Reporting Standards1487 Words   |  6 Pages This report aims to provide the executive directors and senior level management, of Fujitsu with a condensed insight into the potential use of the International Financial Reporting Standards (IFRS), as a substitute method of â€Å"corporate disclosure to its’ current reporting standards (GAAP)†, (American Institute of Certified Public Accountants, 2014). This report will analyse the primary benefits and limitations of adopting the IFRS as one of many accounting standards, thus ultimately aiming to provideRead MoreInternational Accounting Standards Board ( Iasb )1543 Words   |  7 PagesInternational Accounting Standards Board (IASB) The international Accounting Standards Board (IASB) is an independent, private sector that develops and approves the body of the International Financial Reporting Standards (IFRS). The IASB manages and controls the IFRS foundation. The IASB has a group of 14 members who operates and manages the IFRS through daily meetings, community engagements, and speeches about the IFRS. These members are experts in accounting standards, preparing, auditing, financialRead MoreU.s. Accounting Practices Can Cause Complications1060 Words   |  5 PagesUnion and around the world claim that had the U.S. followed International Financial Reporting Standards, instead of U.S. GAAP, these debacles might never had happened. For many years, the accounting profession had faced several challenges developing a set of guidelines that would be generally accepted and universally practiced around the globe. In more recent years, more than 100 countries around the world, have adopted International Financial Report ing Standards in order to settle on a common worldwide