DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, DECEMBER 2017.
Fourth Semester
FOREIGN EXCHANGE MANAGEMENT
(2013-14 Academic Year and 2014 Calendar Year onwards)
Time Three hours Maximum 100 marks
SECTION A — x 8 40 marks)
Answer any FIVE questions.
All questions carry equal marks.
1. Explain the concepts of direct and indirect quotation.
2. Write short notes on: Fischer effect.
3. What do you understand by the term, option forward
contract? How does it differ from fixed forward contract?
4. Tabulate any three major differences among Translation,
Transaction and Economic Exposures.
5. What do you mean by rupee convertibility? What is
partial and full convertibility?
6. Write notes on: real and normal exchange rate indices.
7. What is a premium in option market?
8. On April 3 months interest rate in UK Pound and USD
are 7.50% and 3.50% p.a. respectively. The UK
Pound/USD spot rate is 0.7570. What would be the
forward rate of USD for delivery 30th June?
Sub. Code
41
DE-3349
2
wk11
SECTION B — × 15 60 marks)
Answer any FOUR questions.
All questions carry equal marks.
9. Discuss the salient features of foreign exchange markets.
10. Compare and contrast Long-term and medium-term
foreign exchange rate forecasting tools.
11. Explain the settlement mechanism of option contracts.
12. Explain the external techniques of hedging transaction
risk.
13. Discuss the different forms of exchange control.
14. Explain the asset market model.
15. Why do countries keep forex reserves? What is the
present position of forex reserves of India? What are the
implications of slump in forex reserves on exchange rate?