M.B.A. DEGREE EXAMINATION, APRIL 2016
FOREIGN EXCHANGE
(Common for MBA
(CBCS 2012 onwards)
Time 3 Hours Maximum 75 Marks
Part A 3 15)
Answer all questions.
All questions carry equal marks.
1. What are the features of foreign currency accounts?
2. What do you mean by Foreign Traveller's Cheques?
3. What do you mean by flexible exchange rate?
4. What do you understand by SWIFT?
5. What is foreign exchange exposure?
Part B 10 50)
Answer all questions choosing either or
All questions carry equal marks.
6. State the important dealers in the foreign exchange
market.
Or
Discuss the functions of commercial banks with
regard to foreign exchange.
Sub. Code
632303
RW-11028
2
Sp4
7. How does buying and selling rates are determined
in foreign exchange transaction?
Or
Explain the working mechanism.
8. Examine the role of Export Credit Guarantee
Corporation of India.
Or
Discuss the merits and demerits of convertibility.
9. Explain the responsibilities and liabilities of parties
towards letter of credit on import bills.
Or
Discuss the various causes of changes in the
exchange rate.
10. Explain the trends and management of foreign
exchange reserves of India.
Or
Examine the risks of currency exchange and their
management.
Part C
(Compulsory)
11. Give your comments on any two of the following
questions
Do you think that because of the cost of moving
bank notes back to their country of circulation,
buying foreign currency bank notes could sometime
be cheaper than buying back drafts
RW-11028
3
Sp4
What might a borrower want to borrow in a
currency that is at a forward discount if
that borrower faces a higher tax rate on interest
income than on capital gain
Would it make sense add a firm's exposure in
different currencies at a spot exchange
rate to obtain a measure of the firm's aggregate
exposure? If not, why not?