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Paper / Subject Code: 44301 / International Banking andFinance

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Duration: 2 ½ Hours Marks: 75

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N.B. 1. All questions are compulsory.

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2. Figures to the right indicate full marks

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Q.1 A Multiple-Choice Questions (Any 8) (8)

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1.When a country experiences ____, its interest rates are likely to fall.

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(Boom, Depression, Recession)

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2.The artificial currency created by IMF to be used as supplementary Reserve Asset is called as _____.

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(SDR, Gold coins, Paper currency)

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3.GDRs can be converted into shares. Shares can be converted into GDRs. This is called ____.
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(Two way fungibility, no way fungibility, four way fungibility)

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4.The minimum investment required in the IDR issue by the investors has been fixed at ____by SEBI. DB
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(Rs.2Lakh, Rs.5Lakh, Rs.20Lakh)
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5.An act, which is enacted to regulate payments and foreign exchange in India, is ___.
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(FERA, FEMA, FEDAI)

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6. If the bid points are lower (than the ask points), the spot rate has to be made ____ to arrive at the
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forward bid-ask rates.
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(High, low, multiplied)

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7. The electronic payment system through which forex remittances are made is _____.
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(Chips, Chaps, Infinet)

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8. Pre-shipment finance is also called as ___ credit.

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(Term-loan, post shipment, packing)

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9._____ is where you can buy and sell a currency, at a fixed future date for a pre-determined rate.
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(Forward rate, domestic rate, currency rate)

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10.Foreign exchange risk management is also known as the ______.

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(exchange rate risk, political risk, sovereign risk)

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Q.1.B) State True or False (Any 7) (7)

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1. Balance of payments reflects the country’s capacity to provide material requirements of the
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population.
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2. A decrease in an interest rate causes depreciation of the currency.

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3. Net FDI inflow can never be negative.

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4. Domestic bonds are normally designated in the local currency.

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5. Exchange brokers facilitate deal between banks.

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6. A Price interest point (PIP) is the smallest unit by a currency quotation can change.
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8. Micro factors existing within a firm lead to country risk.

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9. Trade between companies in two different countries is called internal trade.

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10. A foreign banks in India can enter only as a wholly owned subsidiary.
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Paper / Subject Code: 44301 / International Banking andFinance

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Q.2.a.Explain prospects for India in developing offshore banking units in India. (08)

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Q.2.b.Explain principles of international finance. (07)

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Q.2.c.Explain meaning and components of BOP. (08)

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Q.2.d.Distinguish between ADR and GDR. (07)

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Q.3.a.Explain in detail characteristics of Foreign Exchange Market. (08)

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Q.3.b.What is Risk Management? Also explain risks faced by banks. (07)

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OR

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Q.3.c. Explain in features of International banking. (08)

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Q.3.d.Explain functions of FEDAI in detail. (07)

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Q.4.a.Explain advantages of Crypto Currency in detail. (08)

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Q.4.b.Explain reasons for Internationalization of Banks. (07)

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Q.4.c. Calculate the forward buying and selling rate from the following information. (08)
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Spot rate-USD/INR 60.6000/60.9000

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One month 1100/1000

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Two month 1300/1200

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Three month 1500/1400
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Four month 1600/1550

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Q.4.d.Calculate inverse rate, spread, mid-rate, spread % of GBP/INR 99.1100/99.9900.

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Q.5.a. Explain types of foreign exchange quotations. (08)
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O.5.b.Explain meaning and types of Letter of credit. (07)

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Q.5 C) Write short notes on: (Any 3) (15)

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1. Foreign bonds
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2. Purchasing power parity

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3. Country risk analysis

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4. Crypto Currency
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5. Fixed exchange rate system

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