Dear students get fully solved assignments Send your semester & Specialization name to our mail id : help.mbaassignments@gmail.com or call us at : 08263069601

1. Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
help.mbaassignments@gmail.com
or
call us at : 08263069601
AEREN FOUNDATION’S Maharashtra Govt. Reg. No.: F-11724
SUBJECT :FOREIGN EXCHANGE MANAGEMENT
(Answer Any 8)
Question.1. Explain the types of Credit Risk?
Answer:A credit risk is the risk of default on a debt that may arise from a borrower failing to make
required payments. In the first resort, the risk is that of the lender and includes lost principal and
interest,disruptiontocashflows,andincreasedcollectioncosts.The lossmaybe complete orpartial
and can arise in a number of circumstances, for example:
 A consumermayfail to make a payment due on a mortgage loan, credit card, line of credit,
or other loan.
Question.2. Why E-Banking Systems prove attractive to money
launderers?
AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-
SCHOOL

2. Answer:Money laundering is the process of transforming the proceeds of crime, corruption or
kleptomania into ostensibly legitimate money or other assets. However, in a number of legal and
regulatorysystems,the termmoneylaunderinghasbecome conflated with other forms of financial
crime, and sometimes used more generally to include misuse of the financial system (involving
things such as securities, digital currencies, credit cards, and traditional currency), including
terrorism financing and evasion of international
Question.3. Explain the term an audit?
Answer:Auditing refers to a systematic and independent examination of books, accounts,
documentsandvouchersof an organizationto ascertain how far the financial statements present a
true and fairviewof the concern.It alsoattemptsto ensure that the books of accounts are properly
maintainedbythe concernasrequiredbylaw.Auditinghasbecome suchaubiquitousphenomenon
in the corporate and the public sector that academics started identifying an "Audit Society". The
auditorperceivesandrecognizesthe propositionsbeforehim/herforexamination,obtainsevidence,
evaluates the same and formulates an opinion on th
Question.4. Define the term Call option?
Answer:A call option,often simply labeled a "call", is a financial contract between two parties, the
buyer and the seller of this type of option. The buyer of the call option has the right, but not the
obligation, to buy an agreed quantity of a particular commodity or financial instrument (the
underlying) from the seller of the option at a certain time (the expiration date) for a certain price
(the strike price).The seller(or"writer") isobligatedtosell the commodityorfinancial instrumentto
the buyer if the buyer so decides. The buyer pays a fee (called a premium) for this right.
Question.5. Explain the features of Derivatives?
Answer:Derivativecanbe defined as a contract or an agreement for exchange of payments, whose
value is derived from the value of an underlying asset. In simple words the price of derivative
depends on the price of other assets.
Derivatives are agreements (contracts) which confer rights and/or obligations based on some
underlyinginterest.The specificrightsandobligationsencompassedbyaderivative contract may be
cash settlement, delivery of, or the transfer of rights to, the underlying interest. The underlying
interest of a derivative may include physical

3. Question.6. Define ‘Swap’ in detail?
Answer:A swapis an agreementbetweentwopartiestoexchange sequences of cash flows for a set
periodof time.Usually,atthe time the contract isinitiated,atleastone of these seriesof cash flows
is determined by a random or uncertain variable, such as an interest rate, foreign exchange rate,
equity price orcommodityprice.Conceptually,one mayview aswapas eithera portfolio of forward
contracts, or as a long position in one bond
Question.7. What are the factors influencing exchange rate risks?
Answer:Aside fromfactorssuchas interestratesandinflation,the exchange rate is one of the most
importantdeterminantsof acountry's relative level of economic health. Exchange rates play a vital
role in a country's level of trade, which is critical to most every free market economy in the world.
For this reason, exchange rates are among the most watched,analyzed and governmentally
manipulatedeconomicmeasures.Butexchange ratesmatterona smaller scale as well: they impact
the real return of an investor's portfolio.
Question.8. Write short notes (Any two)
a) Stress Testing
Answer:
b) Pat option
Answer:
c) Forward Rate Agreement (FRA)
Answer:
Question.9. Explain the categories of Bank Frauds?
Answer:Bankfraudis the use of potentiallyillegal meanstoobtainmoney,assets, or other property
ownedorheldby a financial institution,ortoobtain money from depositors by fraudulently posing
as a bank or otherfinancial institution.Inmanyinstances,bankfraudisa criminal offence.Whilethe
specific elements of particular banking fraud laws vary depending on jurisdictions, the term bank
fraud applies to actions that employ a scheme or artifice, as opposed to bank robbery or theft. For
this reason, bank fraud is sometimes considered a white-collar crime.

4. Question.10. Define ‘Treasury Bills or T-Bills’ in details?
Answer:
Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
help.mbaassignments@gmail.com
or
call us at : 08263069601