Anna University

INTERNATIONAL FINANCIAL MANAGEMENT Time : 3 hours Maximum marks : 75 Answer for 5 marks questions should not exceed 2 pages. Answer for 10/15 marks questions should not exceed 5 pages. PART A — (3 × 5 = 15 marks) Answer any THREE questions. All questions carry equal marks. Why do nations trade? What is the logic of global business? ‘‘Balance of payments always balances’’ – Comment. How does international financial system differ from domestic financial system? What do you understand by pre and post-shipment Financing? PART B — (4 ´ 15 = 60 marks) Answer any FOUR questions. All questions carry equal marks. What are important techniques of exposure management which may be internally adopted by a multinational firm? ‘‘Centralised cash management is a double – edged sword for international working capital management’’ – Discuss. What does exchange control mean? When was it introduced in India and how is it operated? How MNCS arrange capital structures of their foreign affliates? Describe relevant factors in making this decision. What is systematic risk? Can it be reduced by international diversification? Explain clearly. Compare and contrast comparative advantages Theory with the comparative cost theory of international trade. ‘‘The goal of the firm is to maximise the market value of its share’’ – Discuss.