Institute of Chartered Financial Analysts of India (ICFAI) University 2006 Certification Finance International and Trade – I - exam paper

(10 marks) < ans >

8. Intellectual property rights are the rights provided to persons over the creation of their minds. They provide the creator an exclusive right over the use of his/her creation for a certain period of time. In this context, explain different categories of the intellectual properties covered under TRIP agreement?

(10 marks) < ans >





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Suggested Answers
International Finance and Trade I (221) : January 2006

part A : Basic Concepts

1.
ans : (d)

Reason: S~(A/B) = =
=1.90%.

Hence, choice (d) is the accurate ans.
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2.
ans : (b)

Reason: Imitation – Gap theory considers the possibility of trade ranging from 2 countries having similar factor endownments and consumer tastes.

Hence, choice (b) is the accurate ans.
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3.
ans : (d)

Reason: Bid bond guaurantee is issued for a maximum period of 6 months. Hence, statement (I) is false. All other statements are actual.

Hence, choice (d) is the accurate ans.
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4.
ans : (b)

Reason: Payment made to a foreign tech. consultation for porfessional services rendered by him will appear as a debit item under the head ‘Miscellaneous’.
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5.
ans : (d)

Reason: Under a system of floating exchange rates, relatively high productivity and low inflation rates in the US outcomes in a (an) reduce in the demand for foreign currency and increase in the supply of foreign currency and an appreciation in the dollar.

Hence, choice (d) is the accurate ans.
< TOP >

6.
ans : (b)

Reason: 3 month forward and 4 month forward rates are as follows:

Bid rate Ask rate

Spot 0.6472 0.6475

3- month forward 0.6452 0.6460

4-month forward 0.6442 0.6455

Here, the exporter has the choice to buy SFr and bank has to sell SFr to the exporter. Therefore, the improper rate to be used is the ask rate. Here, 2 ask rates available are Euro 0.6460/SFr and Euro 0.6455/SFr. Since the bank has to sell SFr and SFr is at discount it will deduct minimum discount possible from the spot rate and sell the currency at highest possible ask rate. Hence, the bank will quote exchange rate of Euro0.6460/SFr to the exporter.

Earning:   Approval pending.