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IntCorpFin Sample Test Questions WS2023 - 24
IntCorpFin Sample Test Questions WS2023 - 24
IntCorpFin Sample Test Questions WS2023 - 24
Ursula Walther
Winter 2023/24
Why is corporate governance relevant for corporate finance? Which are core aspects (see
e.g. OECD pinciples)
Name several motives for international activities of companies.
Explain the theory of comparative advantage. What are key limitations?
Given an example like on overheads 26/27 (or the first exercise), explain why there is an
advantage for both countries.
Example and questions like the Zoom-Exercises on Comparative Advantage
Given an exercise (with solution) like “Indian investment returns”, “Americo”, “Pacific
Precisions”, or “Peng Plasma Pricing”, explain the role and relevance of exchange rate
changes.
Note: exercise “Fashion Acquisitions” is not exam relevant.
Balance of Payment
Provided a country’s BOP, interpret the main accounts (CA, FA, FXB, Errors) with
respect to supply and demand of the country’s currency. Which development of the
exchange rate would you expect based on this information?
When and why is a current account deficit problematic for a country?
Note: Booking or classifying transactions is not exam relevant
Explain “the J-Curve Adjustment Path” (either based on overhead 61/62 or on data as in
the respective exercise).
Note: Section 3.2 “The Foreign Exchange Market” is not exam relevant.
Explain a Currency Forward based on an example like on overheads 21, 22, and 23.
Given an exercise similar to the case study Baker Adhesives,
o explain how to determine the PV of the three possibilities no hedge, forward
hedge, money market hedge.
o when provided the solution: explain.
o comment on the hedging cost
o Is the exchange rate risk completely eliminated?
o Which further possibilities may a company use to manage the exchange rate risk?
Given the necessary data of an existing forward contract, explain how to determine the
current value (or: explain a provided calculation)
When provided an exercise like “Gnome Capital” (with solution): explain.
Note: exercises: “Kona Macadamia”, “Hindustan Lever”, “Seattle Scientific”, and “Chronos
Time Pieces”, “Risk Sharing at Harley Davidson” are not exam relevant.
Given the relevant data (as in exercise “Currency Swap – Delphi”): describe the swap’s
cash flows
How can we find fair conditions for a currency swap?
Given the data of an existing swap and the necessary market data, explain how to find the
swap’s fair value (alternatively: when provided the calculation: explain)
Explain a currency option (Call or Put, Long or Short) based on the respective P&L
profile (see overhead 52)
Explain the figure on overhead 53 “Price of a call option”. Explain the most important
influences on the time value.
Provided one of the examples on overheads 59, 60. 61, and 62:
o Explain how to hedge the exposure using an option.
o Explain a provided Profit&Loss figure
Given the exercise “Currency Options (2)” with a Profit&Loss figure. Explain the
different positions.
Given an exercise like “Micca Metals”:
o explain how to compare the hedging alternatives.
o provided the calculations: explain.
Note: The exercise “Risk Sharing at Harley Davidson” is not exam relevant
Note: exercises Cost of Capital (Tata, Interpretation, Cargill, Stevenson Kwo) are not exam
relevant.