IGNOU IBO-06 December 2021 Previous Year Question Paper

Q1.Discuss the working of the Bretton woods System. What were the weaknesses of this system ? 10, 10 [ 2 ]

Q2.(a) Explain the concept of Balance of Payments and distinguish between balance of payments and balance of trade. 10

(b) “Devaluation is the most effective remedy to correct the adverse balance of payments situation.” Critically examine this statement with the help of an example.

Q3.Briefly discuss the various international debt instruments and their purpose.

Q4.What is Foreign Exchange Market ? What are its functions ? Why do central banks intervene in foreign exchange markets ? 4, 6,

Q5.Explain forward market hedge and money market hedge techniques of managing transaction exposure. Also differentiate between these two techniques with the help of example. 12, 8 [ 3 ]

Q6.(a) Distinguish between Foreign Direct Investment and Portfolio Investment. 6

(b) Discuss the rationale of Foreign Direct Investment (FDI) . Which is the most important rationale of FDI and what is its greatest danger ?

Q7.What is Political Risk ? Explain the various ways of managing political risk by multinational corporations. 5,

Q8.(a) “The degree of development of financial markets in any country does affect t he capital structure pattern of multinational corporations.” Explain. 10

(b) What is forf eiting ? What are its advantages to the exporter ? 10 [ 4 ]

Q9.Write explanatory notes on any two of the following : 10, 10

(a) Purchasing Power Parity

(b) Letter of Credit

(c) Centralised Cash Management

(d) DCF techniques of international project appraisal [6]