On this page we have tried to provide you MS 45 Solved Assignment of July – Dec 2013 for IGNOU MBA. Some tips for answers are given below for your reference. It will help you in solving MS-45 assignments.
1. Explain in detail how the financial architecture has evolved over a period of time.
Answer. The financial architecture is the global structure of legalised agreements, institutions, both formal and informal economic actors which jointly help in international flows of financial capital for the purpose of investment and trade financing. This architecture has developed substantially since its beginning in the late Nineteenth century during the first wave of economic globalization.
The globe encountered considerable shifts just before 1914 that developed an atmosphere favorable to the growth and development of international financial centers. The main changes were unparalleled rise in capital flows, swift financial center integration caused by these capital flows in addition to faster communication, and increases in the number of these centers. Read on financial architecture
2. What are international financial flows? Explain the structure of the balance of payments and discuss the basic principles governing recording of the flows.
Answer. International financial flows refers to the movement of money with the intention of investment, trade or business production. Changes in global politics and in technology have resulted in a mind blowing growth of international financial flows. Read more about International financial flows
Balance of payments (BoP) are an accounting report of all financial dealings between a country and the rest of the world. Structure of the balance of payments
3. Explain in detail the Purchasing Power Parity (PPP) and the Interest Rate Parity (IPR)
4. Why is cost of capital different across countries?
5. What are the factors responsible for the recent surge in international portfolio investment?
Answer. The present improvement in international portfolio investments echos the globalization of financial markets. In particular, a lot of countries have liberalized and deregulated their capital and foreign exchange markets in recent times. Furthermore, commercial and investment banks have assisted international portfolio investments by introducing products like ADRs. Latest developments in computer and telecom has triggered a significant decrease in transaction and information expenses related to international investments. On top of that, investors have become familiar with the possible growth from international investments.
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