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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