Foreign Exchange Management - Define the Meaning of Foreign Exchange What Are the Exchange Rate Risks What Are the Factors Influencing Exchange Rate Risks

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FOREIGN EXCHANGE MANAGEMENT

CASE STUDY : 1

Mr Oak pays US $ 2000 to buy a December 103 Call option on a US $ 1,00,000. US Treasury Bond at an exercise price of US $ 103. If the price rises above US $ 103, Mr Oak will gain from the difference and if the price falls below US $ 103, the maximum amount that Mr Oak may lose is the amount of Premium paid.

Q1) Explain the term ‘Speculation’?

Q2) Define Risk Management in detail?

Q3) Define derivatives in detail?

Q4) Suggest Mr Oak to hedge the above transaction position?

CASE STUDY : 2

Suppose United States dollar is relatively stable while the Indian rupee is suffering from sudden inflationary

Q1) Define the meaning of Foreign Exchange?

Q2) What are the Exchange rate risks?

Q3) What are the factors influencing exchange rate risks?

Q4) Comment ‘The relationship between currencies is not always stable and therefore creates exchange rate risk’.

CASE STUDY : 3

In order to operate successfully, business communities need computer systems that can accurately record and

summarize their business transactions. This type of information technology is called a Business Informative

Q1) How Business Information System support any business?

Q2) Explain the components of Business Information System?

Q3) Distinguish between computer hardware and software?

Q4) Explain the role and responsibilities of Information Technology Professionals.

CASE STUDY : 4

Q1) What is payment system?

Q2) Explain components of a payment system?

Q3) Explain the importance of payment system?

Q4) Explain the evolution of payment systems in various stages?

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