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Code No: MB1648/R16

MBA IV Semester Regular/ Supplementary Examinations, May-2019


GLOBAL FINANCIAL MANAGEMENT
Time: 3 Hours Max. Marks: 60
Answer Any FIVE Questions
All Questions Carry Equal Marks
Question No. 8 is Compulsory

1. a Explain the importance of globalization and MNCs. 6M


b What are special drawing rights? 6M

2. a What is BOP? Explain the causes of BOP disequilibrium. 6M


b Critically examine the importance of time factor in international risks 6M

3. a Explain the operational strategies of MNCs. 6M


b Discuss the different types of operations in International financial markets. 6M

4. a What are the various risks associated with international investment decision? 6M
b Explain about global portfolio investment with examples. 6M

5. a List out the major factors that are influencing global debt crisis. 6M
What is external Indebtedness and Challenges and how they are managed 6M
b
efficiently?

6. a State the unfavourable impacts on F.D.I? Explain. 6M


b Discuss the trends in foreign private capital flows to India. 6M

7. a Explain the concept of asset and liability management. 6M


b How do you measure political &Economic Risks in International Markets? 6M

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Code No: MB1648/R16

CASE STUDY 12M


8.
American Motors Corporation (AMC) for years had been America’s fourth largest
producer of automotive vehicles. It dropped to fifth position when Volkswagen
began producing cars in US, after joining with Renault of France in 1980. AMC
started to drop them. It began producing and selling Renault’s designed cars instead
of its own. AMC was also the world’s largest producer of four wheelers since its
acquisition of Jeep from Kaiser in 1870. Joining with Renault did not threaten the
viability of AMC’s Jeep line because Renault had no four wheelers. In fact, Renault
becomes exclusive distributor for Jeeps in France and elsewhere.

By 1980, worldwide sales of Jeep were over 2 lakhs per year with ¾ of that in the
US and Canada, which represented the domestic business. The international sales in
1981 including communist countries were 45,000. Until the fall of Shah, Iran was
the biggest market. Among four wheelers, Jeep was the largest seller. Its
competitors in order were Toyota, Nissan and Land Rover. Jeep was the most
global of the competitors also with manufacturing assembly and on licensing in over
20 countries. In contrast, Toyota had most of its assembly operations in just
Indonesia and Venezuela. Most of the Jeeps were produced from Ohio. However,
AMC Jeep had limited manufacturing in a few foreign markets with assembling
operations and licensing in many others. AMC Jeep had equity in plant located in
Australia, Egypt etc. Altogether, two assembly plants in Africa, three in Middle
East, 12 in Asia Pacific and 4 in Latin America. Most of the local manufacturing is
done to meet local demand.
Jeep sales outside US and Canada are responsibility of a firm based in Michigan.
The concern has 185 employees, of which, 25 are living in foreign countries, 25 are
American expatriates. Jeep vehicles have enjoyed universal recognition and appeal
due to their use in the Second World War by US. In developed countries, Jeeps are
promoted as recreational vehicles while multipurpose in developing countries. It
can be seen that Jeep are sold in large number in world markets and in countries
with difficult economies, environmental and use conditions.

Questions:
Assuming as global business manager, make appropriate suggestions on the
following:

i. What strategy should Jeep vehicles will be adopted for global market?
ii. Should the Jeep warranty be the same in every market?
iii. What should be the service and promotion strategy for global markets?
*****

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