DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, DECEMBER 2017.
Third Semester
FOREIGN EXCHANGE MANAGEMENT
(Upto 2012-13 Academic Year 2013 Calendar Year)
Time Three hours Maximum 100 marks
SECTION A — × 8 40 marks)
Answer any FIVE questions.
All questions carry equal marks.
1. Explain spot exchange rates and forward exchange rates.
2. What are the practical issues in fundamental forecasting
of exchange rates?
3. What are the consequences of cancellation on due date
and early cancellation of forward contract?
4. What kind of changes in exchange rate results in
economic exposure?
5. What are the objectives of exchange control regulations?
6. What is the significance and advantages of option
contracts?
7. Enumerate the transactions where TT buying rates are
applied and TT selling rates are quoted.
8. Describe features of an interest rate swap.
Sub. Code
34
DE-2713
WSS
2
SECTION B — × 15 60 marks)
Answer any FOUR questions.
All questions carry equal marks.
9. Write a detailed note on foreign exchange market
participants.
10. What do you understand from Purchasing power parity
theory? Explain with examples.
11. Explain the settlement mechanism of option contracts.
12. Discuss internal techniques of managing transaction
exposure risk.
13. Discuss the monetary and fiscal policy initiatives directed
by the RBI for exchange rate management.
14. Write a note on the various clearing systems of foreign
exchange markets.
15. The following 2-way quotes appears in the foreign
exchange market
Spot Rate 2-Months Forward
Rs./US Rs. 66.00/Rs. 66.25 Rs. 67.00/Rs.67.50
How many US Dollars should a firm sell to get
Rs. 25 Lakhs after two months?
How many Rupees is the firm required to pay to
obtain US 2,00,000 in the spot market?
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