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DRIVE
SUMMER
2016
PROGRAM
MBA
SEMESTER
IV
SUBJECT
CODE & NAME
MA0042/MA0047
TREASURY
MANAGEMENT
1 “The
Call money market is an important segment in Indian money market”. In the light
of the parenthesis describe the Call Money market in India.
Describe the Call money market in
India
Answer: Call money market or
inter-bank money market is where surplus funds of banks are mostly traded.
Borrowings in the call money market are for a short duration, usually between
an overnight and a fortnight to meet transient defaults. These are
2 What
is exchange rate mechanism ?
Explain
the factors influencing the exchange rate.
What is exchange rate mechanism ?
Explain the factors influencing
exchange rates
Answer: Exchange Rate
Mechanism
Exports
and imports of goods and services from India to other countries necessitate
payment in various currencies. A foreign
3 Write
notes on :
a)
Foreign market stabilization scheme bonds (MSS bonds)
b)
Foreign exchange dealers association of India (FEDAI)
Answer: A) Foreign market stabilization scheme bonds (MSS bonds)
MSS
(Market Stabilisation Scheme) securities are issued with the objective of
providing the RBI with a stock of securities with which it can intervene in the
market for managing liquidity. These securities are issued not to meet the
4 Explain
the objectives and processes of managing risks in an organization.
Management of risks and its
objective
Steps of risk management process
Answer: Etymologically, the
word risk comes from the Latin word resicum (and French word risqué). The first
formal definition of the term came from Frank Knight (1921), who said, risk is
uncertainty that can be quantified. ‘...to
5 Explain
the different theories of Interest rate.
Different theories of Interest
rates
Answer: Interest rate risk,
according to the RBI circular, is the risk where changes in market interest
rates affect a bank’s financial position. Changes in interest rates affect both
the current earnings (earnings perspective) as also the net worth of the bank
(economic value perspective). The risk from the earnings’ perspective can be
measured as changes in the Net Interest Income (NIL) or Net Interest Margin
(NIM).
6 Illustrate
the different approaches for computation of Value at Risk (VAR).
Approaches to compute VAR
Answer: The market risk of a portfolio refers to the
possibility of financial loss due to the adverse movement of variables such as
interest and exchange rates. Quantifying market risk is important to regulators
Get fully solved assignment. Buy online from website
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if urgent then call us on 08791490301, 08273413412
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