School of Business

BBA Program
Semester Final Examination
Summer Semester 2020
Time: 2:00 Hours Total Mark: 30
Course Code: FIN 402 Course Title: International Finance
Answer any SIX from the following questions

Q1. Describe briefly the common techniques used for forecasting. Suppose the one year forward
rate of the Australian dollar is $.63.While the spot rate is $.60. What is the expected percentage
change in the Australian dollar?

Q2. Explain the different types of Exposure. Point out the relevance of an MNC’s exposure to
exchange rate risk.

Q3. Describe the common motives for Direct Foreign Investment. Explain the common barriers
to direct foreign Investment.

Q4. Compare the capital budgeting analysis of an MNC’s subsidiary verses its parents. How the
risk of international project can be assessed.

Q5. Explain Why MNC’s consider long term financing in foreign currencies. Point out the
assessment of long term financing in foreign currencies is adjusted for bonds with floating
interest rate.

Q6. Describe the methods of payments for International trade. Explain the major agencies that
facilitate International trade with export insurance and /or loan program.

Q7. Explain why MNC’s consider foreign financing. Illustrate the possible benefits of financing
with a portfolio of currencies.

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