The figures in the right margin indicate full marks. Answer any four questions from Group A and one question from Group B.

Group A

Write short notes on any five of the following:

 (a) Open position;

b) Inco-terms;

c) financial derivatives;

d)Cross Rate;

e) Off-Shore banking;

(f) European Common Market;

g) balance of Payments.

2. What kind of exchange rate system is followed in Bangladesh?     10+10=20

Give your opinion on the advisability of depreciating the exchange  rate of taka to promote exports from Bangladesh.  

3. Define a letter of credit. What are the rights and responsibilities of  the following parties in a documentary letter of credit?   

(a) The applicant (Importer);

(b) L/C opening bank;

(c) Negotiating bank.

4. Describe briefly the financial and non-llnancial services provided 20 to the exporters by the banking system in Bangladesh.

5.Prepare a list of different types of Marine insurance policies with a 20 brief description of the losses covered by them.

6. Describe the salient features of exchange control in Bangladesh. In  view of the satisfactory level of foreign exchange reserve built up  by Bangladesh Bank please identify the areas in which exchange control may be relaxed.

7. What do sou understand by the term Brexit? How Bangladeshis   trade with the UK is likely to be affected by that country’s decision to quit the European Union?

8. An apparel exporter approaches your branch to open a bac to back L/C for procurement of raw materials against an export contract with the foreign buyer. How would you deal with the following issues?—

(a)         The customer (exporter) requests that a back to back L/C be issued for an amount equivalent to 90% of the export contract to enable him to procure the raw materials.

(b)         The customer request that the packing credit be disbursed to him before arrival of the raw materials against the back to back L/C.

(c)         The customer fails to make the shipment in due time stipulated in the Export LC since received from the foreign buyer but submit the documents to your bank after the expiry date for purchase of the documents.

(d)         The export contract contains a clause that one original copy of the Bill of Lading duly endorsed by the issuing/nominated bank in favour of the importer be directly dispatched to him.

Group B

9. Please     calculate   the   exchange    rate   for   buying    a   usance      export bill denominated in pound sterling 65,000 on the basis of the following data:-

(a)    £1=US$1·3947-1.3957
(b)     US$1=Tk.78·50-78·70
(c)   Transit period 10 days
(d)    Profit margin 1/16%

(e)     Postage 1/32%

Please calculate the exchange rates as well as the amount to be credited to the customer's account (you may assure a year as 360 days).

10.    You have US$50,000 at your disposal.Where you would like to                  20
invest this fund New York or Dhaka to maximize your earnings from this investment on the basis of the following data:
(a)     US$1=Tk. 78·50-78·70
(b)    3 month forward margin      tk. 0.0150 -0·0165 (premium).
(c)      Rate of interest is 10% in   Dhaka and       6% in New York.

(One year in 360 days)





1. Write short notes on any five of the following:—
a) Brexit vis-a-vis Bangladesh's trade with the UK;
b) Forced LIM;
c) Interest arbitrage;
d) 'Received for shipment' Bill of Lading:
e) Value date;
f) Back to back letter of credit;
g) Asian Clearing Union.

2. Briefly distinguish between the following:—
a. Floating exchange rate and fixed exchange rate;
(b) Documentary credit and documentary collection;
(c) Back to back letter of credit and transferable letter of credit;
(d) D/P bill and D/A bill.

3. Describe the main features of the exchange control system in                     12+8=20
Bangladesh. What changes you would recommend to make it compatible with the free market policy stance of the government for economic development of the country?

4. How the exchange rate of Bangladesh taka is determined? Will                 10+10=20
a devaluation of taka from its current level promote or harm the economy of Bangladesh?

5. Describe the rights and obligations of LC issuing banks and                      5+5 =10
negotiating banks under a Documentary letter of credit. What do you understand by the well known principle that the banks deal in documents and not in goods” under the Documentary credits?

9. Please calculate the exchange rate for buying a 120 days                            20
usance export bill denominated in pound sterling on the basis
of the fallowing data:—
(a) Pound sterling 1 = US dollar 1.4947-1.4957
(b) US $ 1 = Tk 65.7550-65.7600
(c)Transit time-15 days
(d) Rate of interest 10% pa
(e) Margin of profit Tk. 0.10 per pound sterling (Assume 360
days a year).

10. A customer of your bank asks you to remit £2500 to London                 20
by cable. By using the following data please work out the exchange rate you will apply for the remittance and the amount to be debited to the customer's Account:—

(a) Exchange rate in the interbank market—
US $ 1 = Tk 78-9020-8030
£ 1 = US $ 1.6150-6180.
(b) Your profit margin Tk 0-20 per pound sterling.
(c) SWIFT charges 1/32 % per pound sterling.