Long Answer Questions:

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Chapter 1 

(1) The Current Account of the Balance of Payments is the key to establised foreign currency demand/supply equilibrium. Discuss.

(2) Discuss the relationship between the Balance of Trade and Current Account of Balance of

 

Chapter 2

(1) Define Forward Rates. Explain the concept of Premiums and Discounts in the context of Holgates Principle.

(2) The term „Cash Contract‟ does not refer to currencies in physical cash form. Discuss.

(3) A market is imperfect without the presence of market makers. Explain the importance of Foreign Exchange traders.

 

Chapter 3

(1) Discuss the connectivity between exchange rates, interest rates and commodity prices.

(2) The Covered Interest Parity theory forms the basis for decision making for borrowing / investing on a risk free basis when multi-currency options are possible. Discuss.

 

Chapter 4

(1) Explain the features of the Gold Standard and how the concept of Gold Points helped to maintain exchange rate stability?

(2) Describe  the  features  of  the  Gold  Standard  and  how  the  Price  Specie  Adjustment mechanism helped to achieve trade equilibrium?

(3) Enumerate the features of the Bretton Woods System and explain the reasons for its failure. (4) What are SDR‟s? Describe their characteristics in detail.

 

Chapter 5

(1) Describe in detail the characteristics of the International Foreign Exchange market.

(2) Describe the operations of a Foreign Exchange Dealing Room.

(3) Who are „Dealers‟? What role do they play in dealing room operations?

 

Chapter 6

(1) What is the Euro-currency market? What factors have contributed to its growth?

(2) Define Euro-currency market. Enumerate its characteristic features.

(3) Define a Bond. Discuss the various types of international bonds.

(4) Trace the origin of Tax Havens and factors contributing to their growth.

(5) Offshore Financial centers represent the globalisation of the Euro-currency concept. Explain how this development took place.

 

Chapter 7

(1) Explain the mechanism of a GDR issue

(2) Dual fungibility of DR‟s represents currency convertibility. Elaborate in the Indian context.

(3) Enumerate the features of the FCEB scheme

(4) Discuss the concept of Participatory notes in the Indian context

 

Chapter 8

(1) Enumerate the roles of participants in the Indian Foreign Exchange market

(2) Discuss the issue of Convertibility of INR

 

Chapter 9

(1) Define Forward Contract. What am the sub-categories of such contracts? Enumerate their fear.

(2) Explain in detail the various internal hedging mechanisms that a corporate entity can use to hedge foreign exchange risk.

(3) Define NDF‟s. What their features? Discuss the implications of the NDF INR market.

 

Chapter 10

(1) Elaborate on the role of the BIS in the current international financial architecture.

(2) Discuss the operational issues pertaining to the ECB as regulator for Euro- zone.

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