MBA

1. USN I 2MBAFM323 I I2MBABI3 3 3
Third Semester MBA Degree Examination, June/July 2014
Banking and Financial Services
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Time: 3 hrs. Max. Marks:100
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+; Note: l. Answer any TIIREEfiUII questionsfrom Q.No.l to Q.No.6. .,...=.'"-'.,.
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E t a. Whu.isplearing house system? 1ru" ' (03 Marks)
q b. What is'venture capital? Explain its distinguishing features. ' (07 Marks)
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: 2 a. Explain Asset-Liability Management. . ,r, * (03 Marks)
'E b. What are the roleb"ful objectives of ECGC?
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S c. Briefly discuss the ffiin features of RBI directions r6i*fu to acceptance of deposits by
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} 3 a. Define exchange rate. 1r** -.. :,,.;;t........... (03 Marks)
E b. Discuss the nature composition dnd4pperatioffif commercial paper markets in India.
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I c. Explain the various services renderedff.,Merchant Banks. (10 Marks)
f 4 a. Write a notson Banker is not b$ffiptlf custdmer.'s money. (03 Marks)
! b. Enumerate the functions of c-&rribrcial bank. a., (07 Marks)
E c. What are the different mo@arket instruments available in India? Explain their features.
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€ 5 a. What are364 dayT-Billi? "'* *u (03Marks)
! U. Differentiate betW*een leasing and hire purchasing. Also tid"&btthe obligations of lessor.
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* c. What is depoiitory system? Explain the functions of depository. (10 Marks)
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€ 6 a. Wr{ffidte on NSDL -d .= (03 Marks)
€ b. Qqffi2ind differentiate between factoring and forfeiting. (07 Marks)
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do you mean by securitization of debt? Explain the different st4s *involved in
i - securitization process. (10 Marks)
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S c. Discuss tfle'@rious E-Banking services offered by banks. (10 Marks)
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E c. UNCUSS Ine'ArlOUS E-sanKrng Servlces OIIereO Dy DanKS. , f..,,u',,,,,,,.,; (rU vrarKs)
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2 a. Explain Asset:Eiab,ility Management. .n.". a (03 Marks)
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E .r."'.,,,;. A fixed deposit in the name of X and Y [payable to either or survivor] is presented fo-r pre-
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,,,,.: ' payrnent discharged by X alone. How will you, as a banker, deal with the situation?
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.S' b. "Certificate of deposits would accelerate the growth of banking sector's resources". Explairi.,,1,,ri'
(05 Marks)
c. A customer approaches his banker for a loan of t7 lakhs and is prepared to submit any one
of the following as security:
A life insurance policy of t10 lakhs
OR
20000 ordinary shares of a cotton mill quoted at770 (face value t10).
Which security the banker should accept and why?
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(05 Marks)

2. 2 of2

3. 12MBAFM321USN
Third Semester MBA Degree Examination, June/July 2Ol4
Advanced Financial Management
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',,,,{ime:3 hrs. Max. Marks1l00
r";r'rL, Note: 1. Answer any TIIREEfiwII questionsfrom Q.No.l to 6. ...,1''
, 2. Q.No.7 and Q.No.8 are compalsory. ,,,-, ,,,'''"""-
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fi 1 a. '.D,B{ine commercial paper. ,,,,i,,,,,
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€' b. What,are the important forms of working capitaladvance given by banks?Bxplain in briefl
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€ c. rrr. 66fine informStion is available for two^c-om.panies (Amou4t '$
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c. rhe fotuw,ing *..Tl;il$;:r,"ole for,*"o.1fr:"nies (Amo
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" lxed assets ?,99,999 , qq
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2.90.000H= :-".i,'Current assets 8,00,000 2,1m,0004
i 3 Total assets 10,00,000 , 10,00,000
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E i You are required to coifl@re the sensitivity of eafi$it'igs of the two companies for a 25%o
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change in the level of the currert assets by calcuhting working capital leverage. (10 Marks)
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: .g 2 a. What is a lock-box system? ,,,,"'.'',, (03 Marks)
A Z b. What is MVA? What is the link Uet@VA and MVA? Explain in brief. (07 Marks)
E .H c. The annual cash requirement of ,$+{+,,fuf 10 lakh. The company has marketable securities
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p + in lot sizes of { 50,000, ( 1,0&;8@i { 2,00,Q,00, { 2,50,000 and t 5,00,000. The cost of
; ; conversion of marketable secrqities per lot is *f$Op. The company can eam 5o/o yield on its
a; securities. You are requirefito'iirepare a table irttlffiting which lot size will have to be soldbotr
,.5 I by the company. Also shpds.that economic lot size.oan be obtained by the Baumol's model.
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E E 3 a. What is the annupl cost associated with 2120 net 50? (03 Marks)
f E b. Explain the rurhetical credit scoring system used for credit evaluafion. (07 Marks)
g S c. Minish ffffiation currently provides 45 days of credit to its crlvfiirc+ Its present sales are
; S {80 milli0nl The firm's cost of capital is 13 percent and the ratio of variable costs to sales is
I .E 0.75. Manish is considering extending its credit period to 60 days. Such an extension is
H E likely to push sales up by (20 million. The bad debt proportion on addititihal sales would be
e € 10 percent. The tax rate for Manish is 35 percent. What willbe the effect ofleb.gihening the
A'E credit period on the residual income of Manish? (10 Marks)
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E g 4 a. What is Re-order point? How do you compute it? (03 Marks)
I I b. What are the important reasons for mergers and takeovers? (07 Marks),
5 { c. Cheran corporation requires 2,000 units of a certain item per year. The purchase price pehirir
r t^i unit is (30, the carrying cost of inventory is 25 percent of the inventory value, and the fixed ""'
g cost per order is {1000.
7 (| Determine the economic order quantity.
E (ii) what will be the total cost of cirrying and ordering inventories when 4 orders of equal
g size are placed? (10 Marks)
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4. I2MBAFM321
a. What do you mean by optimum capital structure?
b. Two components A and B are used as follows:
.,,ti,,,. Normal usage : 50 units per week Minimum usage : 25 units per week ,:::,,,
i;; Maximum usage : 75 units per week Reorder quantity A : 300 units, B : 500 u,.$S;:i,,
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: ' ' Calculate for each component:
'F"..,.(r) Reorder level (ii) Minimum level (iii) Maximum level. ,.......,,,,,.{.iff7
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c{-Wtat leads to the.failure of a merger or acquisition? How should a com Onsure that
'ffidqg-o or acquisition is successful? ,k (10 Marks)
6 a. State rdon's basic valuation formula - *.,,= (03 Marks)
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b. What ard{b-b..causes of industrial sickness? ,.=t."t " (07 Marks)
c. e company*ns t10 per share at an internal. rate 15 percent. ihe firm has a policy of
requir"ddf @te of return is 10 percent,
ii) Gordon's model.
(10 Marks)
as both these conditions are
(05 Marks)
stock split of l:1, which mode of non-cash
(05 Marks)
c. Assume that you have identified an I unit as sick and conducted viability study to
assess whether that the unit can bdreSivd. The study suggests that the unit can be revived;
explain your strategy to revive @'$iek induitrial unit. (10 Marks)
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8 Cast Study, *t- ry #
(03 Marks)
excesslve,7a.
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The following informatip+.ih available for Sagariku ,.rurn, ,,,,".
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Net operating rSG&ISte t40 million flJ:r^+^-^^+ ^- ,{ii,*1tu/ ,1 n *:ll.:^-dffi
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Cost ofi#{bt" 12 percent t; *" lz Pvrvvut
average cost of capital of Sagarika Metals? h"*' is
to average cost of capital of Sagarika Metals, if it employs t100 million of
to finance a project which eams an operating income of t 20 million? ]
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that the Net Income (NI) method applies and there are no taxes.
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