Spring-2016
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Master of
Business Administration - MBA Semester 4
MF0017-Merchant
Banking and Financial Services
(Book ID:
B1815)
Assignment (60
Marks)
Note: Answers
for 10 marks questions should be approximately of 400 words. Each question is
followed by evaluation scheme. Each Question carries 10 marks 6 X 10=60.
Q1. Rating methodology is used by the
major Indian credit rating agencies. Explain the main factors of that are
analyzed in detail by the credit rating agencies.
(Business
risk analysis, financial analysis, Management evaluation, Geographical
analysis, Regulatory and competitive environment, Fundamental analysis) 2, 2,
2,2,1,1
Answer. Rating Methodology used by the major Indian credit
rating agencies is more or less the same. The rating methodology involves an
analysis of all the factors affecting the creditworthiness of an issuer company
e.g. business, financial and industry characteristics, operational efficiency,
management quality, competitive position of the issuer and commitment to new
projects etc. A detailed analysis of the past financial statements is made to
assess the performance and to estimate the future earnings. The company’s
ability to service the debt obligations over the
Q2. Give the meaning of the concept
of venture capital funds. Explain the features of venture capital fund.
(Meaning of
venture capital funds, Features of venture capital funds) 3, 7
Answer. Venture capital is the money provided by investors to
start firms and small businesses with long-term growth potential. This is a
very important source of funding for start-ups that do not have access to
capital markets. It typically entails high risk for the investor, but it has
the potential for above-average returns.
Q3. Hire purchase is one of the
important concepts. There are certain features of hire purchase agreement so
explain the points of it. Differentiate between hire purchase and leasing.
(Concept of
hire purchase, Differences between hire purchase and leasing) 5, 5
Answer. In a hire purchase system, the buyer acquires the property by
promising to pay in monthly, quarterly and half-yearly installments. The period
of payment has to be fixed while signing the hire sale agreement. Though the
buyer acquires the asset after signing the agreement, the title of ownership
remains with the vendor until the buyer pays the entire liability. When the
buyer pays the entire installment and any other obligation according to hire
purchase agreement, only then the title of ownership of goods would be
transferred to the hirer. If the hirer makes any default in the payment of any
installment, the hire vendor has the right to repossess the goods. In this
case, the amount that is already paid so far by the hirer will be forfeited.
Q4. Explain the concept of Depository
receipts. Write down the difference between American Depository Receipts (ADR)
and Global Depository Receipts (GDR) also mention the issues involved in ADR/GDR.
(Explanation
of Depository Receipts, Differences between ADR and GDR, Issues involved in
ADR/GDR) 4, 3, 3
Answer. Depository receipts are securities that are traded in
foreign currency. These receipts are issued by the foreign bank or institution which
acts as a depository of shares issued by a domestic company.
Depository
receipts can be classified into sponsored and unsponsored ones.
Q5. What is Online Trading? Explain
the process of online trading.
(Measuring
and explanation of Online Trading, Explanation of process of Online trading) 6,
4
Answer. Online trading is one of the crucial financial
services provided by financial institutions and merchant bankers. For example,
Indiabulls Securities Limited is one of India’s foremost stock brokerage house
having a pan India presence. The organization is a pioneer in providing online
stock trading platform in India and currently has a customer base of seven lacs
customers.
Q6. Write short notes on:
a. Depository Participants
b. Benefits of Depository Systems
Answer. a. Depository Participants: All the functions performed by
depositories are actually executed by the depository participants (DPs). All
activities related to recording of allotment of securities, transfer of
securities etc. are executed through depository participants and no investor
can directly open an account with a depository. A depository can enter into an
agreement with various depository participants who would work as agents of the
depository. Depository Participant works as an intermediary between the
investor and depository and they are called as
Spring-2016
Get solved
assignments at nominal price of Rs.125 each.
Mail us at: subjects4u@gmail.com or contact at
09882243490
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