International Financial Management

5022 WordsJun 25, 201221 Pages
EXAMINATION PAPER OF INTERNATIONAL FINANCIAL MANAGEMENT Section A: Objective type Part One: 1). Foreign exchange market in India is relatively very Answer: b). Small 2). Balance of payment is a systematic record of all ___________ during a given period of time. Answer: c). Economic Transactions 3). Merchandise trade balance, services balance & balance on unilateral transfer are the part of _________ account. Answer: a). Current Account 4). Interest rate swaps can be explained as an agreement between ___________ parties Answer: b). Two 5). Capital account convertibility in India evolved in August Answer: c).1994 6). Interest rate parity is an economic concept, expressed as a basic algebraic identity that relates Answer: b).…show more content…
This led to the devaluation of national currencies and a decline in world trade. This breakdown in international monetary cooperation created a need for oversight. The representatives of 45 governments met in the Mount Washington Hotel in the area of Bretton Woods, New Hampshire in the United States, and agreed on a framework for international economic cooperation to establish post-World War II. The participating countries were concerned with the rebuilding of Europe and the global economic system after the war. During 1940, Harry Dexter and John Maynard Keynes put forward proposals for a system that would encourage the unrestricted conversion of one currency into another, establish a clear and un equivocal value for each currency and eliminate restrictions and practices such as competitive devaluations. After much negotiations in the difficult wartime conditions, the international community accepted the system and an organization was formed to it. Members & Administration The IMF began operations in Washington DC in May 1943. It then had 39 members. Presently the members of the IMF are 188. Any country may apply to be a part of the IMF. Post-IMF formation, in the early postwar period, rules for IMF membership were left relatively loose. Members needed to make periodic membership payments towards their quota, to refrain from currency restrictions unless granted IMF permission, to abide by the Code of Conduct in the IMF
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