Discuss The Agency Problem. What Initiatives Can Help To Resolve This Problem?



Q.1 Theory Week 1: Answer ONE of the following: 5x1=5 Marks 
(a) Discuss the agency problem. What initiatives can help to resolve this problem? OR 
(b) Mention the theories in relation to MNC’s growth and expansion. Elaborate one of them by explaining how this serves the expansion purpose

Q.2 Financial Math Week 2: Answer any ONE of the following: 5x1=5 Marks (a) You are planning to pay off your current car. You expect to pay $8500 per year at the end of each year from year 2 to year 5 (inclusive). What is the present value of this annuity today, if the annual interest rate is 6%?

Q. 3 Financial Math Week 3 and 4: COMPULSORY 

 You are the forex control officer in the foreign exchange department of Bank Monash (based in Melbourne, Australia). You have been given three tasks to accomplish. 

You need write a put option for one of your client ABC Ltd. The option involves Canadian Dollar ($CAD) and Australian Dollar ($AUD). Your bank charges a premium of $AUD 0.05 for each unit of $CAD traded via put option contract. The prediction is, the spot rate can be $ 1CAD = $AUD 1.23 around the time of option’s execution date (expiry date). What strike rate you should put to prevent any loss if the contract is executed? 

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