MBA SEMESTER-4

ASSIGNMENT Set 1
Name :.. Registration No. :. Learning Center :. Learning Center Code : Course :. Subject :. Semester :. Module No. :. Date of submission :. Marks awarded :.

Directorate of Distance Education Signature of Sikkim Manipal University Center Signature of Evaluator II Floor, Syndicate House Manipal- 576104

Signature of Coordinator

Important Note to the Students:

The student must submit all the assignments given per course per semester to the learning Center. Assignment marks will be accounted for your Internal Assessment. Assignments should be submitted within the time given. Please answer all the Assignments on ruled sheets. Write in your own handwriting Write in your own words. Do not copy. Assignments which are not original/ copied shall be awarded zero marks. Write neatly and legibly in the prescribed format

Comments by the Subject Evaluator: (Subject expert will give comments on overall content, reliability, correctness and appropriateness of information provided)

Suggestions for improvement: (Subject expert will give areas of improvement and possible ways/ methods to follow to improve)

Last Date to Submit the Assignment Set-1 at the respective LCs: - January 30 th , 2013

INSTRUCTIONS FOR ASSIGNMENT SUBMISSION

1. Completed assignments must be hand written neatly and hard copies should be submitted on or before the dates mentioned above. (January 30 th , 2013) 2. Ensure that you answer all questions according to the marks allocated. 3. Content that has been directly copied from the Internet will NOT be accepted. 4. Please attempt all the assignments individually and independently. Assignments that have been copied and shared among students will be automatically rejected and disqualified. 5. All students must sign the acknowledgement sheet while submitting assignments. 6. Late submissions will NOT be accepted. 7. Follow assignment format and complete all the details for each assignment individually.

Master of Business Administration- MBA Semester 4 MF0015 International Financial Management- 4 Credits (Book ID: B1316) Assignment Set- 1 (60 Marks)
Note: Answer all questions (with 300 to 400 words each) must be written within 6-8 pages. Each Question carries 10 marks 6 X 10=60

Q1. What are the goals and functions of the World Bank, the IDA and the IFC? Q2. What is a credit transaction and a debit transaction? Which are the broad categories of international transactions classified as credits and as debits?

Q3. Write a note on exchange rate regime and foreign exchange market in India.

Q4. An American firm purchases $4,000 worth of perfume (FF 20,000) from a French firm. The American distributor must make the payment in 90 days in French francs. The following quotation and expectations exist for the FF. Present spot rate $ 0.2000 90 day forward rate 0.2200 US interest rate 15% French interest rate 10%

Your expectation of the SR 90 days hence 0.2400. (a) What is the premium or discount on the forward French francs? What is the interest differential between US and France? Is there an incentive for covered interest arbitrage? (b) If there is a CIA, how can an arbitrageur take advantage of the situation? Assume i) the arbitrageur is willing to borrow $4,000 or FF 20,000 and ii) there are no transaction costs. (c) If transaction costs are $50, would an opportunity still exist for CIA?

Q5. Define a futures contract. What are the different types of futures contracts? What are the advantages of using stock index futures?

Q6. Define Interest Rate Parity. What are the different types of IRP?