MANAGEMENT PROGRAMME
Term-End Examination

June, 2005

MS-45 : INTERNATIONAL FINANCIAL MANAGEMENT

Time : 3 hours
Maximum Marks : 100
(Weightage 70%)

Note : Attempt any five questions. All questions carry equal marks.1. (a) What are the major benefits arising out of Internationalization of financial system ?

(b) What are the major challenges which the finance managers in developing countries are facing while taking decisions with respect to foreign business ?

2. Critically examine Purchasing Power Parity Theory with the help of suitable examples.

3. “The nature and magnitude of foreign exchahge exposure depends on the market segment in which a firm operates.” Comment on this statement with suitable examples. What are the important elements of a currency risk sharing agreement ?

4. (a) Briefly discuss the various types of short-term capital flows.

(b) “All hedging is speculation, but all speculation is not hedging.” Discuss.

5.What is the geographical location of foreign exchange market ? Discuss, in brief, functions of major players in the foreign exchange market.

6. ”An altemative to investing in foreign stock is to invest in the shares of domestic MNCs.” Discuss. Are MNCs likely to provide a reasonable substitute for international portfolio investment?

7. Discuss, in brief, any four of the following :

(a) Netting and Matching
(b) Leading and Lagging
(c) Objectives and functions of IMF
(d) Forward Hedge
(e) Comparative Cost Theory of International Trade
(f) Unique features of International Bond Market

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