Centralized cash management is a double edged sword

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International finance Management

1. Centralized cash management is a double edged sword for
international working capital management Discuss.
2. Balance of payments always balances Comment.
3. How does the international Monitory fund raise the resources ? What
are special drawing rights? Breifly explain the funding facilities
provided by IMF to its member countries
4. How does international financial system differ from domestic
financial system?
5. What is infra-corporate transfer of fund? Explain the variable that
influence intra corporate transfer of funds.
6. Explain purchasing power parity and reason for its deviation. Also
discuss its applications.
7. Critically examine the impact of developments in the emerging
foreign exchange markets.
8. Consider the following data
Exchange Rate $ Interest Rate
Interest Rate Spot 1 $ 1,5753/ -
-
1 month $ 1, 5623/ 3% p.a 8.5% p.a
3 months $ 1, 5577/ 3.5%
p.a 7.5% p.a 6 months $
1.5536/ 3.5% p.a 7% p.a
1) Find out the arbitrage possibilities for various periods.
2) Show how interest rate parity will be restored as a result of arbitrage activities.
9) You are setting up a project in USA. The estimated NFV is $12 million. Your
finance officer started in the report that he has not accounted for foreign exchange
risk. He felt that with such a large NPV, the project should be accepted since even a
risk adjusted NPV would likely be positive. You have the final decision as to whether
to accept or reject the project. What is you decision? Calculate the following rates
into outright rates: ii) Indicate their spreads