POST GRADUATE DIPLOMA IN
INTERNATIONAL BUSINESS
OPERATIONS / MASTER OF COMMERCE
Term-End Examination
December, 2014
IB0-06 : INTERNATIONAL BUSINESS FINANCE
Time : 3 hours Maximum Marks : 100
Weightage : 70%
Note : Attempt any five questions. All questions carry equal
marks.

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