MS - 45 International Financial Management

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ASSIGNMENT

Course Code                                                      :                               MS - 45
Course Title                                                       :                               International Financial Management
Assignment Code                                            :                               MS-45/TMA/SEM - II /2015
Coverage                                                             :                               All Blocks


Note: Attempt all the questions and submit this assignment on or before 31st October, 2015 to the coordinator of your study centre.

Q. 1. Explain in detail how the international financial architecture evolved over a period of time.

Answer:The world experienced substantial changes prior to 1914, which created an environment favorable to an increase in and development of international financial centers. Principal among such changes were unprecedented growth in capital flows and the resulting rapid financial center integration, as well as faster communication. Before 1870, London and Paris existed as the world's only prominent financial centers. Berlin and



Q. 2. Explain Purchasing Power Parity (PPP) relationship and its applications. What are the reasons for deviations from such relationship?

Answer: Purchasing power parity is both a theory about exchange rate determination and a tool to make more accurate comparisons of data between countries. It is probably more important in its latter role since as a theory it performs pretty poorly. Its poor performance arises largely because its simple form depends on several assumptions that are not likely to hold in the real world and because the amount of foreign exchange activity due to importer and exporter demands is much less than the amount of activity due to investor demands. Nonetheless, the theory remains important to provide the background for its use as a tool for




Q. 3. Describe different types of foreign exchange exposures. Explain the techniques used for management of transaction exposure.

Answer:Transaction exposure, defined as a type of foreign exchange risk faced by companies that engage in international trade, exists in any worldwide market. It is the risk that exchange rate fluctuations will change the value of a contract before it is settled. Transaction exposure is also called transaction risk.
Transaction Exposure Meanin

Transaction exposure, meaning risk that foreign exchange rate changes will adversely affect a cross-currency transaction before it is settled, can occur in either developed or developing nations. A cross-currency transaction is one that involves multiple currencies. A business contract may extend over a period of months. Foreign exchange rates can fluctuate instantaneously. Once a cross-currency contract has been agreed upon, for a specific




Q. 4. Explain in detail the Credit Insurance Policies and Maturity Factoring services offered by Export Credit Guarantee Corporation.

Answer:ECGC is a Corporation set up by the government of India for providing export credit insurance and guarantee facilities to India's exporters. It functions under the administrative control of the Ministry of Commerce. This organisation is offering its services to the exporting community for more than 47 years. It has evolved different credit insurance products to suit the requirements of Indian exporters and commercial banks.





Q. 5. Discuss the basic steps involved in evaluating foreign projects. Why should a foreign project be evaluated individually as well as from its parent company's viewpoint?

Answer:1. Planning an Evaluation at the Design Stage:Independent Project Evaluations are required for all projects.

Depending on the evaluation purpose, Independent Project Evaluations are undertaken at mid-term of the project (mid-term evaluations) and/or shortly before the end of the project (final evaluations). Projects lasting four years or more must undergo a mid-term evaluation and a final evaluation.



Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
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