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1. Dear students get fully solved assignments
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ASSIGNMENT
DRIVE FALL SPRING 2015
PROGRAM Bachelors of Business Administration- BBA
SUBJECT CODE & NAME BBA603 & ROLE OF INTERNATIONAL FINANCIAL
INSTITUTIONS
SEMESTER 6
BK ID B1905
CREDITS 4
MARKS 60
Note: Answer all questions. Kindly note that answers for 10 marks questions should be
approximately of 400 words. Each question is followed by evaluation scheme.
1 Give introduction to international finance. Explain the benefits, scope of international finance.
List the advantages and disadvantages of globalization.
Answer : International finance is the branch of financial economics broadly concerned with
monetaryandmacroeconomicinterrelationsbetweentwo or more countries. International finance
examinesthe dynamics of the global financial system, international monetary systems, balance of
payments,exchange rates, foreign direct investment, and how these topics relate to international
trade.
Sometimesreferredtoasmultinational finance,internationalfinanceisadditionally concerned with
matters of international financial management.
2 Write short note on:
 Balance of Payment
 Current account
 Capital account
 Foreign exchange reserves
 Accounting equilibrium
Answer : Balance of Payment : Balance of Payments is the record of a country’s transactions with
the rest of the world. Terms like trade surplus and deficit are used to describe if the country has
more or exports than
 Current account : The current account consists of the balance of trade, net factor income
and net cash transfers. The current account balance is one of two major measures of a
country's foreign

2.  Capital account : A national account that shows the net change in asset ownership for a
nation.The capital account isthe net result of public and private international investments
flowing in and

 Foreign exchange reserves : Deposits of a foreign currency held by a central bank. Holding
the currencies of other countries as
 Accounting equilibrium:the state of balance inthe economy where supply equals demand
or a country’s balance of payments is neither in deficit nor in excess. The state in which
market supply and demand
Q3 Give introduction on foreign exchange. Explain on foreign exchange markets and role of
international forex markets.
Answer : Foreign Exchange
The exchange of one currencyfor another, or the conversionof one currency into another currency.
Foreignexchange alsoreferstothe global marketwhere currenciesare traded virtually around-the-
clock. The term foreign exchange is usually abbreviated as "forex" and occasionally as "FX."
Q.4 Explain cash-in-advance and write the process of issuing letter of credit and different types of
letter of credit.
Answer : Cash in Advance
The cash-in-advance constraint (sometimes known as the Clower constraint after American
economistRobertClower)[1] is an idea used in economic theory to capture monetary phenomena.
In the most basic economic
Q5 Explain the Foreign Direct Investment (FDI). Give the comparison between American
Depository Receipt (ADR) and Global Depository Receipt (GDR). Write the categories for trade
blocs.
Answer: Foreign direct investment (FDI) is defined as a company from one country making a
physical investment into building a factory in another country. It is the establishment of an
enterprise bya foreigner. FDI includes investments made to acquire lasting interest in enterprises
operating outside of the economy of the investor. FDI relationship consists of a parent enterprise
and a foreignaffiliate whichtogetherforman international business or a multinational corporation
(MNC). In order to qualify as FDI the investment must afford the parent enterprise control over its
foreign affiliate. The IMF defines control
Q. 6 Write down the differencesbetweenGATTandWTO. Explain the problems and achievements
of GATT & WTO.

3. Answer: Difference between WTO and GATT:-
The World Trade Organization is not a simple extension of GATT; on the contrary, it completely
replacesitspredecessorandhasa verydifferentcharacter.Among the principal differences are the
following:
The GATT wasa setof rules,amultilateral agreement,withnoinstitutional foundation, only a small
associated secretariat which had its origins in the attempt to establish an International Trade
Organization in the 1940s. The WTO is a permanent institution with its own secretariat.
The GATT was applied on a “provisional basis
Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
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