International Finance Questions-

Q1. What are International debt sources of funds? Why are they important for success of large Indian companies? What are the risks associated and how can they be dealt?

Q2. How does Project feasibility using NPV different when it comes to Multinational enterprises? Describe the APV technique.

Q3. Differentiate between different types of ADR and GDR. Which type of ADR's is commonly used by Indian companies? How are prices determined for ADR issue?

Q4. Spot rates in NY are

USD/100 JY 1.01250.

USD/100 INR 1.62550

Determine:

a. The spot quotations in India for JY if spread is 0.2%

b. Determine premium/ discount on JY if forward quotes for 60 days are USD/100 JY 1.01375.

c. Forward rates (INR) for 60 days in NY if USD is at annualized premium of 4%

d. Spot Rates of USD  in Mumbai if spread is 0.3%

Q5. On November 20th, you are requested by your export customer to negotiate 45 days bill on New York for $ 75,000. In New York, the quotations are

Spot                                                       $/€ 1.3855/1.38725

1 month forward                                             50/45

2 month forward                                             90/80

3 months forward                                           125/110

Interbank market rate in Mumbai are

Spot                                                       INR/ € 99.9850/100.0125

Spot/ November                                              600/700

Spot/ December                                              800/900

Spot/ January                                                 900/1050

Spot/ February                                               1200/1400                                                                          

Determine the Quotations if Exchange margin is 0.15% and transaction period is 25 days.