Seat No.

: Enrollment No:

SHRI SUNSHINE GROUP OF INSTITUTIONS

END Semester exams
SUBJECT CODE: 4549221 SUBJECT: IF
DATE: TIME: 10:00 to 11:45
TOTAL MARKS: 50
Instructions:-
1. Q.1 is compulsory.
2. Attempt any FIVE questions from Q.2 to Q.8

Q.1 Answer in one word or one sentence. (15)

1) ___________ is the process of interaction and integration among people,
companies, and governments worldwide.
2) A _____________ is a corporate organization that owns or controls the production
of goods or services in at least one country other than its home country.
3) “To hold Reasonable Risks within Reasonable limits in relation to Profit” is One of
the Objective of any MNCs. True or False.
4) Period of Gold Standard was___________.
5) Fisher Effect is A relation between Nominal Rate, Real Rate and ___________.
6) full form of LIBOR is ______________
7) formula of Purchasing power Parity is ___________
8) The forward rate for the foreign currency is said to be at a premium with respect to
the spot rate when one Foreign currency can bough more units of Another currency In
the forward rather than in the spot market. True or False.
9) Write any two forms of International Banking.
10) International Money Market is ________________________________________
11) full form of FCCB is _________________________________.
12) objective of International Cash Management is to __________ The Currency
exposure risk and to ________ the Country and Political Risk. (Minimize, Maximize,
Maintain)
13) one of the most important objective of issuing Letter of Credit is________
14) There are Minimum ________ Parties Involved in the Letter of Credit Process.
15) Economic Exposure is also Known as ____________________.
 
Q.2 Describe the Evolution of International Monetary System. (07)
Q.3 Mayank is an NRI investor who has an opportunity to invest in India as well as In the
U.S.A. in the U.S.A. the investment can be Made at 4% per Annum, while the interest

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rate in India is 10% per Annum. Since the interest rate in India is Higher, The NRI
investor from USA decided to invest USD 100000 in India for 90 Days, Assume that
the Current Exchange rate is USD 1 = INR 40 and the 90 days forward rate is USD 1
= INR 40.6752.
1) Calculate the 90 day theoretical forward rate. (07)
2) Identify weather there is any Arbitrage opportunity.
3) If there is an arbitrage opportunity, calculate the arbitrage profit for USD 100,000.

Q.4 Using the following data, calculate the 30 day, 90 day and 180 day forward premiums for
the British Pound.
Spot : 1 GBP = 1.4487 USD
30 Days Forward 1 GBP = 1.4498 USD
90 Days Forward 1 GBP = 1.4511 USD
180 Days Forward 1 GBP = 1.4529 USD (07)

Q.5 What is International Banking? Explain Major Risks associated with International Banking
And Type of International Banking. (07)
Q.6 What is LIBOR, Explain in Detai (07)
Q.7 What is Letter of Credit? Explain the Types of Letter of Credit and Benefits of Letter of
Credit to Importer an Exporter. (07)
Q.8 What is Foreign Exchange Exposure? Explain the types of Foreign Exchange Exposure
and Management of Economic Exposure. (07)

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