Mf0015 international financial management
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![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 or commodity price. Conceptually, one may
Q4 Explain in detail the types of exposure and measuring economic exposure
Answer: Types of Exposure
Translation Exposure
Translation exposure is also referred to as accounting exposure or balance sheet exposure. The
restatement of foreign currency financial statements in terms of a reporting currency is termed
translation.The exposurearisesfromthe periodicneedtoreport consolidatedworldwideoperations
of a group in one reporting currency and to give some indication of the financial position of that
group at those times in that currency.
Q5 Elaborate on the tools of foreign exchange risk management and techniques of exposure
management.
Answer: Foreign exchange risk (also known as FX risk, exchange rate risk or currency risk) is a
financial riskthatexistswhenafinancial transactionisdenominatedin a currency other than that of
the base currency of the company.Foreignexchange riskalsoexistswhenthe foreignsubsidiary of a
firm maintains financial statements in a currency other than the reporting currency of the
consolidatedentity.The riskisthatthere maybe an adverse movement in the exchange rate of the
denomination currency in relation to the base currency before the date when the transaction is
completed.[1][2] Investors and businesses
Q6 Write short note on:
a. Adjusted present value model (APV model)
Answer: Adjusted Present Value Definition
Adjusted present value (APV), defined as the net present value of a project if financed solely by
equityplusthe presentvalue of financingbenefits,isanothermethodforevaluating investments. It
is similar to NPV. The difference is that is uses the cost of equity as the discount rate rather than
WACC. And APV includes tax shields](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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Mf0015 international financial management
- 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 (Prefer mailing. Call in emergency ) ASSIGNMENT DRIVE SUMMER 2016 PROGRAM MBADS – (SEM 4/SEM 6) / MBAN2 / MBAFLEX – (SEM 4) / PGDFMN – (SEM 2) SUBJECT CODE & NAME MF0015 - INTERNATIONAL FINANCIAL MANAGEMENT SEMESTER 4 BK ID B1759 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 Q1 Explain Globalization, Advantages of Globalization and Disadvantages of Globalization. Answer: By the term globalisation we mean opening up of the economy for world market by attaining international competitiveness. Thus the globalisation of the economy simply indicates interaction of the country relating to production, trading and financial transactions with the developed industrialized countries of the world. Q2 In foreign exchange market many types of transactions take place. Discuss the meaning and role of forward, future and options market. Answer: : In finance,aforwardcontract or simplyaforwardisa non-standardizedcontractbetween twopartiesto buy or to sell an assetat a specifiedfuturetime at a price agreed upon today, making it a type of derivative instrument.Thisisincontrastto a spot contract, whichisan agreement to buy or sell anasseton itsSpot Date,whichmay varydependingon the instrument, for example most of the FX contracts have Spot Date two business Q3 Explain Swap, its features and types of Swap.
- 2. 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 or commodity price. Conceptually, one may Q4 Explain in detail the types of exposure and measuring economic exposure Answer: Types of Exposure Translation Exposure Translation exposure is also referred to as accounting exposure or balance sheet exposure. The restatement of foreign currency financial statements in terms of a reporting currency is termed translation.The exposurearisesfromthe periodicneedtoreport consolidatedworldwideoperations of a group in one reporting currency and to give some indication of the financial position of that group at those times in that currency. Q5 Elaborate on the tools of foreign exchange risk management and techniques of exposure management. Answer: Foreign exchange risk (also known as FX risk, exchange rate risk or currency risk) is a financial riskthatexistswhenafinancial transactionisdenominatedin a currency other than that of the base currency of the company.Foreignexchange riskalsoexistswhenthe foreignsubsidiary of a firm maintains financial statements in a currency other than the reporting currency of the consolidatedentity.The riskisthatthere maybe an adverse movement in the exchange rate of the denomination currency in relation to the base currency before the date when the transaction is completed.[1][2] Investors and businesses Q6 Write short note on: a. Adjusted present value model (APV model) Answer: Adjusted Present Value Definition Adjusted present value (APV), defined as the net present value of a project if financed solely by equityplusthe presentvalue of financingbenefits,isanothermethodforevaluating investments. It is similar to NPV. The difference is that is uses the cost of equity as the discount rate rather than WACC. And APV includes tax shields
- 3. b. Economic and political risk Answer: Meaning and definition of economic risk Generally speaking, economic risk can be described as the likelihood that an investment will be affectedbymacroeconomicconditions such as government regulation, exchange rates, or political stability,mostcommonlyone inaforeigncountry.Inotherwords,while financing a project, the risk that the output of the project will not Dear students get fully solved assignments Send your semester & Specialization name to our mail id : “ help.mbaassignments@gmail.com ” or Call us at : 08263069601 (Prefer mailing. Call in emergency )