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INTERNATIONAL FINANCE MANAGEMENT

Following are the data for India’s B.O.P.

Year 2004-05 Rs (in Mn)1) Merchandise Exports 3,62,6612) Merchandise Imports 5,33,7783) Income on Travel, Transportation MIS 2,27,7624) Payments on Travel, Transportation MIS 1,63,3535) Receipts for Maintenance of Embassies 1,8126) Payments for Maintenance of Embassies 1,1727) Unrequired Transfer Received 96,3188) Unrequired Transfer Outwards 1,9399) Investment Income Received 21,09810) Investment Income paid to Foreign Residents 39,01411) Foreign Investment (FDI, FPI) Received 2,06,69612) Foreign Investment made by Indian Films 1,53,37713) Other Capital Receipts 2,90,10014) Other Capital Outflows 1,98,016

Question :

1) Calculate balance of Visiable Trade?2) Calculate balance of Invisiable Trade?3) Calculate balance of Capital Account?4) Calculate change in Reserves?

The Indian Foreign Exchange market has grown substantially during the liberalization period of the Indian economy. The growth in the retail segment of the market has increased the foreign exchange business turnover of

`Authorised Dealers’ while the increase in tourism has boosted the business volumes of `Money Changers’.

Question :

1) Define Foreign Exchange Market? What are its characteristic features?2) What were the provisions of LERMS?3) What are the function of FEDAI?4) Which is the currency used as vehicle currency in India?5) Who are `Money Changers’?

CASE STUDY : 3

US $ Millions 1998-1999 1999-2000Exports 34,298 38,285Imports 47,544 55,283Trade Balance -13,246 -17,098Invisibles 9,208 12,935Current A/c Balances -4,038 -4,163External Assistance 820 901NRI Deposits 1,742 2,140Foreign Investments 2,412 5,191Borrowings & Others 3,591 2,010Total Capital A/c 8,565 10,242Overall Balance 4,222 6,402

Given the

above data.

Question

1) Compile the basic balance?

2) Examine the trade balance vis-à-vis the current account balance and explain its effect on the economy?3) Explain the behavior of the Capital Account entries and how can they affect the economy?4) Is the increasing positive `Overall balance’ good for the economy? Why?

CASE STUDY : 4

Following the experience of successive financial crises in countries such as Maxico, Russia, Brazil, Turkey & Argentina. Besides South-East Asian countries over the past decade. It is now widely held within policy circles in developing countries that full capital account convertibility, which allows any entity to transfer their funds at will in and out of a country, causes more harm than good.

Question :

1) What is capital account convertibility?

2) What are the risks in capital account convertibility in India context?

3) What is the present status of capital account convertibility in India?

4) Bring out the arguments in support of convertibility?

WE PROVIDE CASE STUDY ANSWERS, ASSIGNMENT SOLUTIONS, PROJECT REPORTS AND THESIS

a r a v i n d .b a n a k a r @ g m a i l . c o m

ARAVIND - 09901366442 – 09902787224