NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: International Finance

Internal Assignment Applicable for December 2020 Examination

1. Elaborate ‘Hedging and Speculation are important functions of derivatives’.
Distinguish between exchange traded derivatives and over the counter derivatives.

2. Elaborate on the various channels through which a company can mobilize equity
capital from the international market. (10 Marks)

3. A country’s Balance of Payment includes two components – Current account, Capital
and financial account. Current account measures the value of all goods and services
imported and exported during a given financial year. Current Account Deficit (CAD)
arises when the value of imported goods and services exceeds the value of exported
goods and services. As on June 30, 2020 RBI reported India’s current account deficit
has been reduced to 0.9% of the GDP in 2019-20 as compared to 2.1% in FY 2018-19
due to curtailed imports.

a. Differentiate between Current account and Capital account. (5 Marks)

b. What measures can be taken to reduce the disequilibrium in the balance of payments’
position?