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

(a)
Product strategy

(b)
Plant location

(c)
Promotional Strategy

(d)
Pricing strategy

(e)
Currency swap.


< ans >

17.
An American Mutual Fund company invested US$ two million in Bombay Stock Exchange

on 30.09.2005 when the BSE sensex was at 8723 points. The Investment Manager on 31.03.2006 observed that his portfolio was appreciated by 35% when the BSE sensex touched 11,411 points on 31.03.2006. If the investor decided to withdraw the investment from India, what would be the return on his investment in dollar?

Rs./$ spot rates are quoted as:

On 30.09.2005 : 43.50/43.55

On 31.03.2006 : 44.70/44.75

(a)
35.00%

(b)
33.33%

(c)
31.38%

(d)
36.00%

(e)
31.23%.


< ans >

18.
Which of the subsequent is false under currency board system?

(a)
The market mechanism determines the interest rates

(b)
The board is having power to print the domestic currency to the extent of requirement under fiscal policy

(c)
The increase in domestic interest rates may increase the supply of anchor currency

(d)
The stable exchange rates encourages international trade and investment

(e)
The currency in circulation is backed by anchor currency reserves.


< ans >

19.
If spot market rates at New York are quoted as :

US$/€ = 1.2814 /1.2820

US$/DKr = 0.1719 /0.1720

Then which of the subsequent is the bid /ask rates of DKr/€ ?

(a)
0.2203 / 0.2205

(b)
7.4500 / 7.4578

(c)
0.1341 / 0.1342

(d)
5.8140 / 5.8170

(e)
0.7800 / 0.7803.


< ans >

20.
Which of the subsequent statements is not actual with respect to SDRs?

(a)
SDRs are reserves created by IMF and allocated to member countries

(b)
SDRs are only used to cover current account deficit

(c)
Interest is paid to those who hold SDRs and by those who draw down their SDRs

(d)
The interest rate of SDRs is based on an avg. money market rates in major countries.

(e)
problem of SDRs to a member country is in proportion to its quota in IMF.


< ans >

21.
Consider the following:

Rs/$ Spot 45.10/45.20

Interest rates (1 year) Rs : 6.00% - 6.50%

US$ : 5.00% -5.25%

Earning:   Approval pending.