International Financial Management Final

Daffodil International University Faculty of Business and Entrepreneurship Department of Business Administration Semester: Fall-2025 Time: 120 Minutes Course Code: FIN 410 Program: BBA Final Examination Full Marks: 40 Course Title: International Financial Management Teacher's Name: DNMZ, Debashish Answer all the following questions a) Explain the various methods of forecasting techniques with limitations. b) Explain why firms forecast exchange rate with examples. 2. [CLO 01, 1.02, Marks: 51 ICLO 01, L02, Marks: 51 a) Banzara, a Bangladeshi coffee brand, plans to invest in a new project in either Thailand or Malaysia- Once the project is completed, it will constitute 30 percent of the firm's total funds invested in itself. The remaining 70 percent of its investment in its business is exclusively in Thailand or Malaysia- Characteristics of the proposed project are forecasted for a 5-year period for both locations, as shown in the following locations. Characteristics of the proposed project Existing Business If located in Thailand Mean expected ann ual return on 20% investment (after taxes) Standard deviation of expected 0.10 annual after-tax returns on investment Correlation of expected annual after-tax returns on investment with after-tax returns of prevailing business in Bangladesh 0.09 0.80 If located in Malaysia 0.11 0.02 I. Estimate the expected portfolio return if the project is located in Ihailand or Malaysia, the portfolio standard deviation of the project located in both countries, and evaluate the investment decisions to identify which projects generate stable returns. ICLO 03, 1.05, Marks: 71 b) Explain the cost related motives for direct foreign investment with examples. ICLO 01, 1.02, Marks: 31 cs CamScanner 3. a) Darwish, Inc., would like to assess the country risk of Bangladesh. Darwish has identified various political and financial risk factors, as shown below. Darwish has assigned an overall rating of 80 percent to political risk factors and of 20 percent to financial risk factors. Darwish is not willing to consider Bangladesh for investment if the country risk rating is below 4.0. Should Darwish consider Bangladesh for investment? Justify your answer. Political Risk Factor Blockage of fund transfers Bureaucracy Financial Risk Factor Interest rate Inflation Exchange rate Competition Growth Assigned Rating Assigned Rating 4 b) Analyze political risk characteristics with examples, 4. a) Explain why purchasing Power Parity (PPP) doesn't hold. ICLO 03, 1.05, Marks: 51 Assigned Weight 60% Assigned Weight 30% ICLO 02, 1,04, Marks: 51 ICLO 01, 1.02, Marks: 51 b) Explain the International Fisher Effect (IFE) theory with its implications. I CLO 01, 1.,02, 51 cs CamScanner