M.B.A. (Part II) (Semester IV) Examination, 2017
Group G INTERNATIONAL BUSINESS (Paper IV)
International Financial Systems and Markets
Day and Date Thursday, 25-5-2017 Total Marks 70
Time 10.30 a.m. to 1.30 p.m.
Instructions Q. No. 1 is compulsory.
Attempt any two questions from Q. No. 2 to Q. No 4.
Attempt any two questions from Q. No. 5 to Q. No 7.
Figures at right indicate marks.
1. Analyze the following Case, Identify the problem, Generate possible alternatives
and Choose the best alternative.
The Cost of Delay
The public sector Indian Oil Corporation the major oil refining and marketing
company which was also the canalizing agency for oil imports and the only
Indian company in the Fortune 500, in terms of sales, planned to make a foray
into the foreign market by acquiring a substantial stake in the Bala! Oil field in
Iran of the Premier Oil. The project was estimated to have recoverable oil a
reserve of about 11 million tones and lack was supposed to get nearly four
million tonnes.
When lac started talking to the Iranian company for the acquisition in October
1998, oil prices were at rock bottom 11 per barrel) and most refining companies
were closing shop due to falling margins. Indeed, a number of good oil properties
in the Middle East were up for sale. Using this opportunity, several developing
countries "made a killing by acquiring oil equities abroad." IOC needed
Government's permission to invest abroad. Application by Indian company for
investing abroad is to be scrutinised by a special committee represented by the
Reserve Bank of India and the finance and commerce ministries. By the time
the government gave the clearance for the acquisition in December 1999
(i.e.more than a year after the application was made), the prices had bounced
back to 24 per barrel. And the Elf of France had virtually took away the deal
from under IOC's nose by acquiring the Premier Oil. The RBI, which gave IOC
the approval for $15 million investment, took more than a year for clearing the
deal because the structure for such invesements were not in place, it was
reported.
Discuss internal, domestic and global environments of business revealed
by this case.
Discuss whether it is the domestic or global environment that hinders the
globalization of Indian business.
Even if EIf had not acquired Premier Oil, what would have been the impact
of the delay in the clearance on IOC
What would have been the significance of the foreign acquisition to IOC
What are the lessons of this case
2. Write short notes (any two).
Foreign Exchange Market Activities.
Interest Rate Parity.
Role of financial intermediaries.
3. Write short notes (any two).
International Bond Market.
FDI.
Indian Forex Scenario.
4. Write short notes (any two).
International Development Banking.
Problem of Debt Servicing.
Balance of Payment Theory.
5. What is international securities market Discuss various instruments of
international market.
6. Discuss about complexities and issues in financial decisions of a multinational
firm. Briefly explain various aspects of commercial borrowings.
7. What is international financial management Briefly explain various phases of
international monetary system.