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IBO-06 Question Bank

IBO-06 Question Bank (3)

IBO-06 Question bank,  International Business Finance 

Term-End Examination
December, 2014
Time : 3 hours Maximum Marks : 100
Weightage : 70%
Note : Attempt any five questions. All questions carry equal

1. Explain the concepts of 'Balance of Trade' and 'Balance of Payments', with the help of specific illustrations.

2. "A change in the exchange rate can result in three different exposures for a company : translation exposure, transaction exposure and economic exposure". Explain the mechanism with suitable illustrations.

3. Explain the international money transfer mechanism.

4. Discuss the broad features of international monetary system, highlighting the role of international monetary system.
5. Explain the concept of Foreign Direct Investment. While explaining briefly the policy framework adopted in
India, suggest change(s) in the policy in view of the prevailing crisis in country's balance of payments.

6. Explain the CAPM model in relation to cost of capital.

7. One of the major concerns for multinationals intending to invest in other countries is the assessment and measurement of political risks. How do the multinationals do it ? Explain.

8. Distinguish, with examples between :

(a) Currency Swaps and Interest Rate Swaps.

(b) Factoring and Forfeiting

9. Write short notes on any two of the following :

(a) Exchange Rate Forecasting

(b) Purchasing Power Parity

(c) Loan Syndication Process

(d) Yield Curve

December, 2012

IBO-06 : International Business Finance

1.  What are the salient features of the present day International Monetary System ? Critically examine their suitability from the view point of developing countries.

2.  Discuss the concept of disequilibrium in balance of payments. What are the measures usually adopted to restore the equilibrium ? Explain.

3.  Write a note on organization and structure of Foreign Exchange Markets in India, bringing out the changes since 1991.

4.  What is Transaction Exposure ? Name the different methods of hedging transaction exposure and explain in detail any one  of them.

5.  Explain the concept of Transfer Pricing. Why do the TNCs resort to such a practice and why are the governments against it ? Discuss in detail.

6.  Explain the CAPM model in relation to cost of  capital.

7.  What is involved in assessment and management  of political risks ? Discuss adopting a step by step approach.

8.  Differentiate between :

(a)  (i)  balance of trade and balance of  payments.

(ii) Spot and forward rates.

(b)  Purchasing Power Parity theory and Interest Rate Parity theory.

9.  Write short notes on any Two of the following :

(a)  Special Drawing Rights

(b)  Currency Options

(c)  International Development Association

(d)  Counter trade 

June, 2013

IBO-06 : International Business Finance

1. "Devaluation is the most effective remedy for correcting an adverse balance of payments position" Critically examine this statement .

2. Discuss the rationale of Regional financial institutions. Have they succeeded in achieving their objects ? Explain the working of any one of them.

3. What are the 'Foreign Exchange Markets', their participants and the roles they perform ?

4. How does tax policy impact foreign investments ? Do accounting practices of countries have any influence on it ? Discuss.

5. Under each of the following scenario, whether the value of rupee in relation to apanese Yen will appreciate, depreciate or remain the same ? Assume exchange rates are free to vary and other factors remain constant.

(a) Growth rate of national income is higher in India than in Japan.

(b) Inflation in India is higher than in Japan

(c) Prices in India and Japan are raising at the  same rate.

(d) Real interest rates in India are higher than in Japan.

(e) India imposes new restriction on Indian companies acquiring foreign companies and investing is real estate abroad.

6. Define yield curve. How is it constructed ? How does interest rate risk influence the yield curve ?

7. Appraisal of international projects is more complex than the domestic projects. Do you agree with the statement. If so ? If not, why not ? Give reasons supports by illustrations.

8. Distinguish between :

(a) Translation and Transaction currency risks

(b) Forward contract and Forward Rate Agreements


      Future of options.

9. Write short notes on any two of the following :

(a) Transfer Pricing

(b) Economic Exposure

(c) Forfeiting

(d) Pre-shipment Credit. 

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