DFIN401 INTERNATIONAL FINANCIAL MANAGEMENT

Description

SESSION	JAN – FEB 2026
PROGRAM	MASTER OF BUSINESS ADMINISTRATION (MBA)
SEMESTER	IV
COURSE CODE & NAME	DFIN401 INTERNATIONAL FINANCIAL MANAGEMENT

 

 

Assignment Set – 1

 

Q.1. Explain the factors that cause a Current Account Deficit. (10 Marks)

Ans 1.

The term “Current Account Deficit” (CAD) happens at the point that the total amount of products, services income, and current transfers a country imports exceeds what it exports. It is a key component of the Balance of Payments (BOP) which reflects the nation’s net financial position compared to other countries of the world over the course of.

Trade Imbalance in Goods

The primary cause for a

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Q.2. Explain various derivative instruments traded in Foreign Exchange market. (10 Marks)

Ans 2.

Derivative instruments within the foreign exchange market are financial contracts, whose value comes from the base exchange rates for currency. They are employed by companies banks, financial institutions, importers, exporters, and investors to mitigate risk of currency as well as gain exposure to markets and arbitrage the price difference across markets. The four primary instruments for forex are forwards, futures, options, and swaps.

Forward Contracts

Q.3. Explain financial instruments and techniques such as factoring, forfeiting, and countertrade used in international trade. (10 Marks)

Ans 3.

International trade calls for specialized financial instruments beyond conventional bank lending due to the distinct risk posed by geographical distance, various legal frameworks, exposure to currency and the ambiguity of creditworthiness of buyers from abroad. Factoring, forfeiting and countertrade are three key strategies which facilitate financing international trade as well as reduce the possibility of not being

 

Assignment Set – 2

 

Q.4. Discuss the different types of foreign exchange exposures and the translation methods used to measure them. (10 Marks)

Ans 4.

The term “expense to foreign exchange” refers to how much the company’s financial position as well as cash flow profits are impacted by fluctuations in currency exchange rates. Controlling exposure is a crucial aspect of global financial management. Exposures are classified as three categories: translation, transaction exchange, and economic exposure.

Transaction Exposure

Risk of transactions arises

 

Q.5. What is the nature of international capital structure? Explain how it is measured? (10 Marks)

Ans 5.

International capital structure refers the blend of debt as well as equity financing that a multinational firm uses across its global activities, which includes the main company and all its subsidiaries operating in various currencies and nations. Finding the right international capital structure is considerably more difficult than the domestic decision-making on capital structure due to different tax laws as

 

Q.6. Briefly explain the procedure to measure country risk. (10 Marks)

Ans 6.

Country risk refers to the probability that a country may not be able or willing to fulfill its financial and commercial obligations to foreign creditors as well as investors. It covers political risk financial risk, risk to the economy and legal risk all of which may adversely influence the results of international trade, and loans. Multinational banks, multinational corporations and institutional investors