Question 1:
a) How did the US Balance of Payment position affect the whole International Monetary System under Bretton Woods System?
b) What are the risks included in Domestic and Foreign financial markets?
Question 2:
a) Why have Central Banks often intervene the foreign exchange market under the system of flexible exchange?
b) How does currency option distinct from a forward contract?
Question 3:
a) Critically analyze the centralized cash management operations of MNCs.
b) Describe transfer pricing method with the help of an illustration. Why do MNCs use this method?
Question 4:
a) How does balance of payment position affect the domestic economic activities?
b) What do you mean by the term letter of credit? How does it protect the interest of both exporter and importer?
Question 5: Write short notes on the given terms:
a) Adjusted Present Value method.
b) Economic Exposure.