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Fina 430:International Finance Question Paper

Fina 430:International Finance 

Course:Business Administration

Institution: Kenya Methodist University question papers

Exam Year:2013



KENYA METHODIST UNIVERSITY

END OF 2''ND ''TRIMESTER 2013 (DAY) EXAMINATION
SCHOOL : BUSINESS AND ECONOMICS
DEPARTMENT : ACCOUNTING, FINANCE AND INVESTMENTS
UNIT CODE : FINA 430
UNIT TITLE : INTERNATIONAL FINANCE


TIME: 2 HOURS

INSTRUCTIONS

Answer question one and any other two questions

Question One

Briefly discuss the following

Home currency invoicing

(6 Marks)

Leading and lagging



Outline the environmental characteristics that differentiate domestic based firms from national firms

(8 Marks)

Describe various foreign exchange regimes/systems highlighting disadvantages of each system

(10 marks)

Assume that the direct quote between the $ and £ = $1.5 and the rate of inflation in the UK is 10% and the inflation rate in the US is 6%

Required:
Compute the % average in the direct quote and determine the exchange rate. (6 marks)

Question Two

Explain the law of one price (purchasing power parity).

(4 Marks)

Discuss the four types of foreign exchange risk.

(16 marks)

Question Three

Describe four types of international banking offices

(12 marks)

Explain four purposes of IMF as an international financial institutions

(8 Marks)

Question Four

Briefly describe four techniques used to hedge against foreign exchange risk

(12 marks)

Briefly outline three theories of international business

(8 Marks)







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