1. a) Compare and contrast comparative advantage theory with the comparative cost theory of International trade.
b) "Regional trade blocks are a challenge to free trade and WTO." Discuss.
2. a) The changing international financial system poses new challenge for financial managers in developing countries." Elaborate.
b) Explain with the help of an imaginary illustration, how capital budgeting decisions of any MNC may be different from domestic firms.
3. a) Briefly explain different methods of exchange rate forecasting. Discuss their suitability in Indian context.
b) Spot and forward exchange rates are based on interest rate parity theorem. Discuss with suitable examples.
4. a) Define foreign exchange risk exposure, distinguish between accounting and economic exposure?
b) What are important elements of a currency risk sharing agreement? Discuss with suitable example.
5. a) What is a political risk?
b) Explain the salient features of the regulations over foreign exchange in India.
6 a) In which countries or currencies would you like to retain a higher propotion of your earnings for reinvestment? Explain, with reasons.
b) Write a brief note highlighting special problems of developing countries in financing foreign trade. Also indicate possible ways out.
7. a) What is systematic risk? can it be reduced by international diversification?
b) "It is said euro is here to stay" Comment. What implications would euro have on Indian corporates in the years to come?