International finance Management ARAVIND - 09901366442 – 09902787224
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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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