DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, MAY 2017.
Third Semester
FOREIGN EXCHANGE MANAGEMENT
(Upto 2012 2013 Academic Year and 2013 Calendar Year)
Time Three hours Maximum 100 marks
SECTION A — 8 40 marks)
Answer any FIVE questions.
All questions carry equal marks.
1. What is cross rate and chain rule?
2. Distinguish between Nominal Effective Exchange
Rate(NEER) and real effective exchange rate (REER).
3. What are the factors on which the value of an options
contract depends?
4. What are the important variants of currency swap?
5. What are the main differences of fixed rate and floating
exchange rates?
6. What is matching, leading and lagging?
7. Distinguish between fundamental and technical
approaches to forecasting foreign exchange rates.
8. What is Loro account?
Sub. Code
34
DE-410
2
Sp 1
SECTION B — × 15 60 marks)
Answer any FOUR questions.
All questions carry equal marks.
9. Explain how demand for and supply of foreign exchange
determine the foreign exchange rate.
10. Explain the asset market model.
11. Explain the circumstances under which a forward
exchange contract can be cancelled by an authorized
dealer?
12. Explain the general protection measures for foreign
exchange risk exposure management.
13. Explain the monetary and fiscal policy initiatives for
exchange rate management.
14. Describe the functions of foreign exchange markets.
15. How do you hedge real operating exposure?