NMIMS International Finance June 2021 Solved Assignment

International Finance 1. Explain different accounts maintained under balance of payments with its components. Also, explain why a stronger rupee could enlarge the India&rsquos balance of trade deficit and why a weaker rupee could affect the India balance of trade deficit. 2. A US based IT firm required GBP 100000 in 180 days. The company feels that exchange rates are expected to fluctuate in the next 6 months. Their near accurate estimate based on a good quality research were as below: Current Rate of GBP USD 1.50 180 days forward rate for GBP USD 1.48 Call premium USD 0.02 strike price of USD 1.50 for 180 days Interest Rates in London for deposits &ndash 4.5% and for loans &ndash 5.1% Interest Rates in New York for deposits &ndash 4.5% and for loans &ndash 5.1% A fair estimate of exchange rate after 180 days is expected to be USD 1.44 with a probability of 20%, USD 1.46 with a probability of 60% and USD 1.53 with a probability of 20%. Advise the company on a good hedging strategy. Make suitable assumptions if required and state the same. 3. Conduct the below exercise Step-1: Click the link https://www.imf.org//media/Files/Publications/WEO/2021/Update/January/English/data/WEOJan2021update.ashx Step-2: Answer the below questions a. What do you understand by Real GDP What is the Real GDP Growth Rate of India and China in 2019 What is the estimated real GDP growth rate of India and China in 2020 What is the projected real GDP growth rate of India and China in 2021 and 2022 b. What is the estimated 2022 GDP Loss in percentage in comparison to pre-covid levels January 2020 forecast in China and Other Emerging Economies in Asia other than China