cs professional FINANCIAL TREASURY AND FOREX MANAGEMENT exam paper notes

Posted on 10-04-2016        By ADMIN

cs professional FINANCIAL TREASURY AND FOREX MANAGEMENT exam paper notes Attempt any four of the following: (i) ?Financial leverage is a fair weather friend?. Discuss (ii) Describe the responsibilities of treasury manager (iii) ?Derivatives are mainly used to control risk to increase return? Comment. (iv) A stable dividend policy is always preferable to fluctuating dividend policy. (v) ?Length of operating cycle is the major determinant of working capital needs of a business firm?. Discuss. (5 marks each) 2. (a) X Ltd., an Indian Company, has an export exposure of 10 million yen, payable September end. Yen is not directly quoted against Rupee. The current spot rates are INR/USD = `41.79 and JPY/USD = 129.75. It is estimated that yen will depreciate to 144 level and ` to depreciate against $ to `43. Forward rates for September are INR/USD = `42.89 and JPY/USD = 137.35. You are required to: (i) Calculate the expected loss if hedging is not done. How the position will change if the firm takes forward cover? (ii) If the spot rate on 30th September was eventually INR/USD = ` 42.78 and JPY/USD = 137.85, Is the decision to take forward cover justified? (14 marks) (b) JPL has two dates when it receives its cash inflows, that is, February 15, and August 15. On each of these dates, it expects to receive `15 crore. Cash expenditures are expected to be steady throughout the subsequent 6 months period. Presently, the ROI in marketable securities is 8 per cent per annum, and the co................................ download free cs professional notes

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