Bhavnagar University 2007 M.B.A Management of Information Systems INTERNATIONAL BANKING AND FOREIGN EXCHANGE - Question Paper

M.B.A. DEGREE EXAMINATION, DECEMBER 2007.
INTERNATIONAL BANKING AND FOREIGN EXCHANGE

Time : 3 hours Maximum : 100 marks
PART A — (5 ? eight = 40 marks)
ans any 5 ques..
every ans need not exceed a page.
1. Explain the concept of foreign exchange.
2. Define and illustrate spot and forward transactions.
3. Write a note on Liberalised Exchange Rate Management System.
4. Discuss in brief, India's foreign exchange issues.
5. Explain the features of foreign Traveller's cheques.
6. What is letter of credit? elaborate its merits and demerits?
7. Describe the procedure for financing against export incentives.
8. Your customer requested you to problem a Demand Draft on Colombo for USD 10,000.
(a) Assuming the on-going spot rates in the local market for dollar are as under :
(b) USD one = Rs. 49.2000/2125
(c) Reserve Bank of India selling and buying rates for US dollar are as follows :
(d) USD one = Rs. 49.2050/2100.
(e) You needed an exchange margin of 0.15%.
(f) What rate will you quote to your customer? Also compute the rupee amount payable by the customer.
PART B — (4 ? 15 = 60 marks)
ans any 4 ques..
every ans need not exceed five pages.
9. Elaborate the functions of the foreign exchange department of a commercial bank.
10. Explain the features different methods of exchange control.
11. Describe the mechanism of letter of credit with an example.
12. Examine the role of commercial banks in the field of import financing.
13. Explain the features of standard and specific policies of the ECGC.
14. On twelfth February your customer has received an import bill for USD 10,000. He asks you retire the bill to the debit of his account. Interbank rate for dollar is
(g) Spot USD one = Rs. 48.7050/7200
(h) Spot/March 5000/4500
(i) You require an exchange margin of 0.15% for TT sales and 0.20% for bill sales. With what amount will you debit his account?

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