3rd Semester MBA (Jun-2016) Question Papers

1. +-rA
3'[&<,m Nlbfr
USN
Examination, June/July 2016
Behaviour
14MBAMM3OI
Max. Marks: 100
(03 Marks)
(03 Marks)
(03 Marks)
.
(03 Marks)
(03 Marks)
(03 Marks)
(03 Marks)
Third Semester MBA Degree
Gonsumer
Time: 3 hrs.
oC)
()
dt-
a,
<tl
;C(,
()
OJ
Lr
8R
6;i
-vf
(!3U
5v)
oo ll
ioc
.5 or
d!f,
gs
1)tr
€ge'-
fr,
Ad
aX
1.,;r(.)
(do
50c
.gd
)g') G,
e5-O .3
:)-a' c)
Es
o-AFo.
()-f
?.=
6:
7)IE
EE
rD
8=> ('-
oo-ta0
(l)=
=cd:+9
=
di)
(J
'*J <
:oi
C)
Z
H
i<
o
o.
SECTION. A
Note : Answer any FOUR qaestionsfrom Q.No.l to Q.No.7.
I Define collsumer behavior.
2 What is brand personality?
3 Define communication.
4 What is social class mobility?
5 What do you mean by reference group?
6 What is diffusion of innovation?
7 What is consumer research?
SECTION - B
Note : Answer any FOUR questions from Q.No.I to Q.No.7.
I Differentiate b,gtw_e6n customer and consumer. (07 Marks)
2 Explain the consumer research process. (07 Marks)
3 Expl*irt.Maslow's hierarchy needs and explain its marketing implications. (07 Merks)
4 . {isduss the various advertising appeals effective in persuading target audience. (07 Merks)
5, ' Describe the traditional family life cycle. (07 nlarks)
6 Explain the characteristics ofculture. (07 Marks)
7 Who is opinion leader? Discuss the role of opinion leaders.in influencing purchase behavior.
(07 Marks)

2. l4MBANIM30I
Note: Answerany ooffirme.No.I to e.No.7.
1 What is consumer right? Explain its types. (10 Marks)
2 Explain in detail the four views of consumer decision making. (10 ltarks)
3Whatisperceivedrisk?HowdoconsumerShandleperceivedrisk?
4 Mention the application of classical conditioning theories that marketers can incorpoiate.
:,, (10 Marks)
5 Briefly discuss the social class categories in India. (l0 tVlarks)
6 Explain the types of reference groups with a suitable examples. (10 ltarks)
7 Mention the various stages of the adoption process. How can marketers use this information to
strategise? (10 N{arks)
SECTION - D
CASE STUDY - t Compulsory I
When the { 415.13 Titan industries expanded from the watch market in Aprilg1,where its Titan
brand had been extremely successful into designer jewellery with its Tanishq bralcl of watches,
the company was obviously trying to appeal to the buying power of the superior. To begin with
Tanishq offered 18 karat jewellery to consumers who have traditionally purchased yellow
22-karat gold. Also the European designers did not go down well with consumers rvho preferred
chunky traditionat jewellery. More important, how.r.r, not only was branded jewellery a super
premium product at a price level that was 20 percent higher than that ofjewellery. But clespito its
avowed attempt to provide an exclusive product, the company not only used ,.rn rpupers fbr its
advertising thus robbing the brand of media exclusivity -it also built retailing systern and
ambience not vastly different from those it had used for Titan. Repelled by the easy availability
and lack of exglusivity, although their budgets were no constraint, the superrich responsed
lukewarmly to'the product, forcing a pricing & positioning rethink two years later.
Where db-'ybu think the company went wrong in understanding the taste and preferences of the
particular social class segment? (10 Marks)
Can you suggest a communication programme that will appeal to the target market i1i this case'J
'.,
= (10 N,Iarks)
I
)
*{<***

3. USN
Third
Time: 3 hrs.
14MBAFM3Ol
2016
Max. Marks:100
(03 Marks)
(03 Marks)
(03 Marks)
(03 Marks)
(03 Marks)
(03 Marks)
(03 Marks)
(10 Marks)
(10 Marks)
(10 Marks)
(10 Marks)
C)
o
o
!
a
1)
4)
a
r'gbo-
&-
63 J
eo ll
c'l OO
.= c-l
d$
hbo
YC)
()tr5c)PE
d 'rr
o>
*, -.n
Ac,
AR
aI
bU
u)<(:3td
/c(t
6-
E(d
->ts
5lJa-
ic)+o-tro-
5coeFf
sf,O
grE
t<)r. lr=
E'=
Lr()
=.o
> (H
coog bIJ
0)=
AEtr>
=0)C)-
(r<
J6i
o)
z
SECTION - A
l+rotu : Answer any FOUR questions from Q.No.7 to Q.No.7.
1 What is NEFT?
2 What do you mean by ALM?
3 Explain Promissory Note.
4 What is Bank rate?
5 Define LlC.
6 What do you understand by Universal Banking?
7 What are Non - scheduled banks?
SECTION . C
Note : Answer ony FOUR questions from Q.No.l to Q.No.7.
Discuss the major features of Negotiable instrument.
What is e - banking? Explain the advantages and disadvantages of e - banking.
Elaborate the components of Bank's balance sheet.
Discuss the provisions of Banking Regulation Act, 1949.
I
SECTION - B
Note : Answer any FOUR questions from Q.No.7 to Q.No.7.
I Discuss the key elements of KYC policy. (07 Marks)
2 Who is NRI? Discuss the different types of accounts that can be opened by him/her.
(07 Marks)
3 Enumerate the functioni of cornlnercial bank. (07 Marks)
4 What is Lending? Explain the principles of bank lending. (07 Marks)
5 A new - generation private bank wants to introduce hitech banking in rural India. List
out the,&llenges and opportunities for the bank. (07 Marks)
6 Elaboiate the various kinds of endorsement. (07 Marks)
7 . Explain the functions of RBI. (07 Marks)
I
2
3
4

4. 5 Explain the types of charge created on assets.
6 Discuss the types of relationship between Banker and customer.
7 Explain the role and operations of EXIM Bank.
I4MBAFM3OI
(10 Marks)
(I0 Marks)
(10 Marks)
CASE STUDY - [ Compulsory I
Questions :
l. Mr. Lakshimiraj has floated a new private limited company. Advice him on the
documents required to open a current account. (05 Marks)
2. Mention any five nationalized and private commercial banks. (05 Marks)
3. Write any five essential features of a cheque. (05 Marks)
4. Describe any five differences between a debit card and a credit card. (05 Marks)
*:k* rr*
2 of 2

5. USN
Time: 3 hrs.
Third Semester MBA Degree Examination, iune/July 2016
Retail Management
14MBAMM3O2
Max. Marks:t0O
(03 Marks)
(03 Marks)
(03 Marks)
(03 Marks)
(03 Marks)
(03 Marks)
(03 Marks)
(07 Marks)
(07 Marks)
(07 Marks)
(07 Marks)
(07 Marks)
(07 Marks)
(07 Marks)
(10 Marks)
(10 Marks)
(10 Marks)
(10 Marks)
()
o
(-)
dtr
a
cB
E
a
(d
(.)
cd
C)
:i
no
oo*
J'
Ea
=rn
bo rl
troo
.g c
63 =f,
ES
c)=
-c q)
oB
EZ
a=
oO
do
o0<
.Ed
o
}EaC -t
-(, (B
-2" ts
EeAs
48.tro.x6
o;
?.=
6:
3o(,LE
EEt< (L)
5.v
tr' oo
0)=
ES
=o)(J
oi
<N
()
SECTION - A
Note : Answer uny FOUR questions from Q"No.7 to Q.No.7.
I Define Retailing.
2 What are the assumptions of conflict tireory of retailing?
4 What is Merchandise management?
5 What is inventory shrinkage in retailing?
6 What is price discrimination in retailing?
7 What is CRM in retailing?
SECTION - B
Note : Answer anJ/ FOUR questions from Q.No.7 to Q.No.7.
I What are the functions of retailing?
2 Briefly explain the components of retail mix.
3 Briefly explain the "wheel of retailing theory".
4 State the measures for detecting and prcventing shoplifting.
5 What are"the factors influencing retail price?
6 Briefly- state opportunities for retailing in online.
7 What is an shopping mall? State its advantages and disadvantages.
SECTION. C
Note : Answer ony FOUR questionsfrom Q.No.l to Q.No.7.
I Briefly explain the types of retail location available.
2 Explain: i) Central place theory of retailing; ii) Accordion theory.
3 Briefly explain the types of retail formats for general merchandise.
4 Briefly explain retail pricing strategies.
z
63
li
o
I of 2

6. What is store layout? Explain
Define visual merchandising.
How does Indian retail differ
the types of store layout.
Briefly explain the presentation techniques.
from global retailing?
SECTION - D
CASE STUDY - [ Compulsory I
..TESCO
- HOME PLUS"
I4MBAMM3O2
(10 Marks)
(10 Marks)
(10 Marks)
(05 Marks)
(05 Marks)
to above case?
(05 Marks)
(05 Marks)
In August 2011, Tesco Home Plus in South Korea introduced the worlds first virtual store in
seonreung subway station, is down town Seoul. The walls of the subway station come to life
with virtual displays of over 500 of the most popular products with bar codes which passers by
can scan using the Home plus app on Smartphones and get it delivered to their homes. The
beauty of the innovative idea is giving b,{ty connection the opportunity to do their grocery
shopping "on the go" South Koreans are known to be the Hardiest workers in the world with
working hours stretching upto 16-18 hours of day and hence they have very less time for
themselves and shopping. While waiting for their transport, commuters can buy their groceries,
by scanning the bar code or GR displayed to each product, if the orders were placed before lpm
they would be delivered the same evening to wherever they are. In fact same Tesco Home plus
has expanded its award winning virtual stores to more than 20 bus stops in South Korea.
Questions:
a.
b.
c.
What are the reasons for success of Homeplus in South Korea?
If similar formats were introduced in India, will it work?
What is the importance of technology in today's retail business with reference
What are the draw backs ofthe Home plus retail format?d.
**{<{<{<
2 of 2

7. USN 14MBAM1{303
20L6
M ax. M arks: 1 00
(03 Ntarks)
(03 Marks)
(03 N{arks)
(03 Marks)
(03 Marks)
(03 Marks)
(03 Marks)
(07 Marks)
(07 Marks)
(07 iVlarks)
(07 Marks)
(07 Marks)
(07 Marks)
(07 il{arks)
(10 N4arks)
(10 Marks)
(10 Marks)
(10 Marks)
Third Semester
o.J
o
!
,.
a
C)
()
l-
cr, .()x
il v1
3
:0 I
-&
.= c
<cs
.c0)P-
a__
#T
bU
cri E
26
63r
A-
o-x
l;:
o=
(,LE
d.J
w
c :tl
c)=
-!Y
,J-
(.) <
-61
()
Z
tr
Time:3 hrs.
SECTTON - A
IYote : Answer any FOIIR questions from Q.No.l to Q.No.7.
I What do you understaiid by zone c,itoleranoe?
2 Define Services.
3 What do you rnean by Penetration Pricing?
4 Explain the concept of Mystery shopping.
5 What are the hard and soft standards?
6 Give any three key reasons for GAP - 4 involving communication.
7 Who are known as "Boutldary Spanners"? Why'?
SECTIQN . B
lYote : Answer any FOUR questions from Q.lYo.I to Q.No.7.
1 Distinguish between goods and services in marketing.
2 E,xplain the different levels of relationship strategies.
3 What are the strategies for enhancing customer participation ?
4 Explain five dimensions of service quality.
5 E,xplain the criteria fbr an effbctive service research program.
6 Explain the different types of service scopes.
7 Disc.uss the various approaches used in pricing of services.
SECTION . C
Note : Answer any FOUR questions from Q.A{o.1 to Q"No.7.
1 Explain the expanded marketing mix of services.
2 What are the strategies for effective delivery through Intennediaries? Explain.
Discuss the process for setting customer defined service standards.
What are the key factors that influenie custouler expectation of services?
l of 2

8. Discuss the strategies for Closing Provider Gap - 3.
Explain steps used in building a service blue print.
Discuss the benefits and chailenges for companies in
l4MBAMM3O3
(10 Marks)
(l0lt4arks)
eiectronic distribution of services.
(10 Marks)
SECTIOF,[ . t)
CASE STUDY - J Compulsory I
CLUB MED
The Indian marketing context is being exposed to a host of products and service
categories wtrich have never been rnarketed in the last several decades. Holiday
packages are being introduced by a number of travel service companies. CLUB ME,D,
the French holiday services firm which markets holiday packages in several countries
entered India and sold around 700 holiday packages in 1995. A night's stay at a CLUB
MED village in any ofl its ten resorts in Asia would cost between Rs 4200 and Rs 4550
to the holidayer. It has resofts in Malaysia, Thailand Mauritius, Indonesia and the
Maldives. The proposition is fun oriented holidays. Direct rnailers, selling the
packages to corporate (who could reward their ernpioyees) and promotional tie - ups
with diners and annexe *eie some of the strategies tried out by the company.
Advertising conver/ed the holidays trraving fun in exotic locales, worldwide , CLUB
MED has a high degree of loyalty with 75a of the holidayers making a repeat buy.
CLUB MED seems to have withdrawn from the Indian context.
Answer the following Questions :
1. Explain the need for Holiday packages in India.
2. Explain the holiday package services strategies required for the
3. Comment on the strategies of CLUB MED.
4. What marketing strategies would you recommend for creating a
context?
(05 Marks)
Indian market.
(05 Marks)
(05 Marks)
market in this
(05 Marks)
2 af 2

9. USN I4MBAFM3O3
2&16
Max" Marks:100
(03 Marks)
(03 Marks)
structures are
(03 Marks)
(03 Marks)
(03 Marks)
(03 Marks)
if the required rate is
(03 Marks)
(07 Marks)
Third Semester MBA Degree Examination,
I nvestment Managerment
Time: 3 hrs.
c)
a
c)
(c
o.
;
C)
o9r
(Jx
o0#
(B q,
50"
ccc
.= cq3$
6J=
-0J
e'l
E?
UH
O()
oo-63(€
vo
>!a(s
tr=
Ed
:? a.l
O{:
c-X
()i
?.=
6:
a()(,tE
Lr (J
5.v
^^oc- oo
0)=
c- ;
L
o
r<
*N
c)
Z
!
o
c.
Note: Use o.f Present vulue tahles is perntitted.
SECTION . A
Note : Answer any FOUR questions.from ANo.l to Q.No.7.
I What do you mean by book-building?
2 What is the role of an underwriter in primary issue'?
3 Primary and secondary markets are complementary, but their orgafiizational
different. - Comrnent.
4 How is economic growth related to stock prices /
5 Distinguish between systematic and unsystematic risk.
6 How does constant rupee strategy differ frorn constant ratio strategy?
7 What is the value of a l2%<1000 face vaiue bond redeemable after 8 years
17% and redeemed at premium of lA%.
I
)
SE,CTION. B
Note : Answer uny FOUR questions.front Q.No"l to Q.No.7.
Briefly describe the steps involved in a public issue. (07 Marks)
The return on two securities X and Y are given below. Select the security according to risk and
return.
Return on Security X (%) Return Security Y (9/o) Probatriiity
8
5
2
i
I
4
6
0.5
0.3
0.2
(07 Nlarks)
An investor has the follow'ing information of a bond:
Face value - t 1000, Coupon rate: l(l% p.a., Time to maturity - 10 years,
Market price: { 1250, Callable in 5 years: t n1A.
i) Find the yield to maturity (YTM)
ii) and yield to call (YTC).
The current dividend on an equity share of ICL limited is t4. ICl., is expected to enjoy an above
normal growtl-r rate of lB% for 6 years. Thereafter the growth rate will fall and stabilize at l2o/o.
Equity investors require a return of i8% fiom ICL stock. What is the intrinsic value per share of
ICL Limited'/
I of 3
(07 Marks)

10. Expecter"l retumr
Standard deviation
Stock A Stock B
5
6
14MBAFVI3O3
What are the econotnic factors intluencing the analysis of equity stock? Discuss. (07 Marks)
Coefficient of correiation: 0.60
i) What is the covariance between str:ck A and B'J
ii) What is the expected return and risk of a portfblio in which A and B have weights of 0.6 and
A.4? (07 Marks)
'fhe XYZ C,ow,pany manages a stock fund consisting of tbur stocks rvith the fbllowing market
values and betas:
1,00,00{)
[,50,000
50,000
if the risk free-rate on interest is 97o and the rnarket return is 15Yo, rvhat is the portfolios
expected return? (07 Marks)
spcr-Jo&: c:
Note : Answer finy F{}L.R questionsfrorm Q.No.I to Q.No.7.
Difibrentiate between c,apitai market and rnoney market. Explain the tnoney market instruments
in detail" (to Marks)
The retutrns on the equity siock of Llares l-td and the market portfulio over a 11 yearperiod are
iven belen ow.
Year t
I 2 -)
',I
5 6 l 8 9 l0 il
Return on Cares Ltd 15 -6 18 30 t2 25 ) 2A t8 24 8
Return on marl<et portfblio 12 I L4 24 l6 30 --J 24 15 22 t2
i) Calculate the beta fi:r the stock of Cares Ltd.
ii) Establish the characteristic line ibr the stcck of Cares Ltd.
Describe the strategies for managing a bond portfolio.
N{ax Lirnited's earnings and dividends have been growing at a rate of 1B% per annum. This
growth rate is expected to coniinue lbr 4 years. After that the grorvth rate will fa|l to 12% for the
next 4 years. Thereafler tlte growth rate is expected to be 6% tbrever. If the last dividend per
share was {7 and the investor's required rate of return on max equity is 15%. What is the
ts
C
D
3
4
(10 Marks)
(l0lVflarks)
(10 Marks)
(tr0 Marks)
intrinsic value per share'?
What is randorn walk theory? Expiain the various fbrms of rnarket efficiency.5
6 Bonds A and B are simiiar except fbr the maturity period. tsoth the bonds cai:ry 9% coupon rate
with the face value of t 10,000. The vield to maturity is 9%.lf the yield to maturity rise to llo/o,
what witrl be the respective percentage change in bond A with 4 years to maturity and B with 5
1 .1 {.t
1.2{)
0.80
0.50
years to rnaturity?
2 of -l
(10 Marks)

11. T4MtsAFM3O3
7 The following fhree portfoiios provide the particulars siven belw EP 0r C 10s orov !rl lculars Erven Delow:
Fortfo lio Avg return I St,0 deviation Correlation coefficierrt market & portfoiic
A
B
C
Market
18 | zt
14 i !.x
rs i s
13_ | t2
0.8
u"6
0.9
Risk-free rate of interest is 9%.
i) Rank these portfblios using Sharye's and'freynor method.
i, Compare both the indices. (I0 Marks)
SECTTON - D
CASE STUDY - [ Cornpulsory I
The stock of Alpha conlpany performs well relative to other st,ccks during recessionary periods.
The stock of Beta Company, does lvell during gror,vth peric,ds" tsoth the stocks ar:e currently
selling for t50 per share. The rupee return (clividend plus price change) of the stocks for the next
year would be as fbllows:
[:cilnomic Condition
Hieh srowth Low srowth I Stagnation Recession
Probability
Return of alpha stock
Return of beta stock
0.3
55
75
0.3
50
65
0.2
60
50
0.2
70
4A
Calculate the expected rerurn and standard deviarion ot-:
i) { I 000 invested in the equitl- stock of alplra.
ii) {1000 invested in the equity srock of beta.
iii) t500 itx'ested in ttre equity stock of alpha and in the equit,rr stocl< r:f beta.
iv) {700 invested irr thc equitl'stock ol'alpha anr:1 t30(i in the equity stock oibeta. (20 Marks)
****x
3 of 3

12. USN 12MBAFM321
Third Semester MBA Degree Examinatlon, June/July 2016
Advanced Financial Management
Time: 3 hrs. Max. Marks:100
Note: 1. Answer any THREEfull questionsfrom Q.No.7 to 6.
2. Q.No. 7 & I sre compulsory.
(,
o
o
dL
E
0(!
0)
6
6)
l-
OX
.Y-
(t J
7t.)
-^11
cco
.= c
cd$
E#o=
-c t)
oB
na
ad
ai
oq)
b0-
;= :-
>9.Ctr
tr)E(6
5e(h-
o.6-
tro-
,i .a
6:
t- ,i,
:- 6-)
JE
O.=
>!
oo-coa
()=
=d9. !.)
=e)L
o
U<
:oi
(..)
o
z
P
o
c.
a. What are the 5C's of credit management?
b. Consider the data for Amit & Co.
(03 Marks)
the second
(CCA) for
(07 Marks)
(10 Marks)
(10 Marks)
(03 Marks)
(07 Nlarks)
(10 Marks)
(03 Marks)
(07 Marks)
m ml lon
Current Assets Amount Current Liabilities Amount
Inventories
Debtors
Cash
Total
7A
60
15
Trade creditcrs
Provisions
Total
40
20
t4s 60
What is Maxirnum Permissible Bank Finance (MPBF) for Amit & Co. under
method suggest by the Tondon committee? Assume that core current Assets
Amit & Co. are { 60 million.
c. Explain the different modes of Bank finance for the working capital.
a. What is the annual percentage interest cost associated with the following credit terms?
(i) 1ll0 net, 30 (11) 2ll5 net, 40. Assume 360 days in a year. (03 Marks)
b. Two components A&B are used as follows:
Normal usage : 50 units per week (each)
Minimum usage : 25 units per week (each)
Maximum usage : 75 units per week (each)
Re-order quantity : 4-300 units ts- 500 units
Re-order period : A- 4 to 6 weeks B- 2 to 4 weeks.
Calculate the following for each component :
(i) Reorder level (ii) Maximum level (iii) Minimum level (iv) Average stock level.
(07 Marks)
c. Economic enterprises requires 90,000 units of certain items annually. The cost per unit is
t 3, the cost per purchase order is t 300 and inventory carrying cost is t 6 per unit per year.
(i) What is EOQ?
(ii) ''What should the firm do if the suppliers offers discounts as below'
Order Quantity
4s00 - 5999
6000 and above
Discount
'lo/L/O
3%
a. State any three assumptions of capital structure theory.
b. What do you understand by market value added and economic value added.
c. Enumerate in detail the symptoms of industrial sickness.
a. What is ABC analysis?
b. What are the different types of factoiing? Explain any three in detail.
I of3

13. 12MBAFM321
c. Manish corporation currently provides 45 days of credit to its customers. Its present sales are
{ 80 million. The firrn's cost of capital is l3ohand the ratio of variable costto sales is 0.75.
Manish is considering extending its credit period to 60 days. Such an extension is likely to
push sales up by {20 million. The bad debt proption an additional sales will be 10%. The tax
rate for Manish is 35%. What will be the effect of lengthening the credit period on the
residual income of Manish?
a. What is working capital leverage?
b.Whatismerger?Brieflyexplainthedifferenttypesofmerger.
c. The following information is available for two companies, A ltd. and B ltd.
ln mlll10n
Particulars A Ltd. B Ltd.
Current Assets 150 50
Net Fixed Assets 50 1s0
Total Assets 200 200
EBIT 30 30
ROI t5% t5%
Calculate working capital leverage if there is a 20o/o reduction/increase is current assets.
(10 Marks)
a. Write a note on postal float and lethargy float. (03 Marks)
b. Advani chemicals limited estimates its total cash requirements as t2 crore next year. The
company's opportunity cost of fund is 15% The company will have to incur {150 per
transaction, when it converts its short term securities to cash.
(i) Determine optimum cash balance (it) How much is the total annual cost of the demand
for the optimum cash balance? How many deposits will have to be made during the year?
(07 Marks)
c. Company X and Y are in the same risk class and are identical in every respect except that
company 'X' uses debt,, while company 'Y' does not. The levered firm has 9,00,000
debentures carrying l0% rate of interest. Both the flrm has assets of t 15 lakhs. Assume
perfect capital market, rational investors and so on; a tax rate of 35% and capitalizatton rate
of l5oh for an all equity company.
(i) Compute the value of firm X and Y using NI approach.
(ii) .Compute value of each firm using NOI approach.
(iii) Using NOI approach, calculate overall cost of capital of both firm X and Y.
(iv) Which of the two firm has an optimum capital structure as per NOI approach. (10 Marks)
If a company in India wishes to declare the dividend, what are the legal and procedural
aspects has to be considered. (10 Marks)
"There are two dangerous situations that manager should usually avoid in controlling
inventories". Explain. (05 Marks)
c. A company earns { l0 per share at an internal rate l5%. The flrm has a policy of paying
40% of earnings as dividends. If the required rate of returns is 100/o,, determine the price of
the share under Walter model. (05 Marks)
(10 Marks)
(03 Marks)
(07 Marks)
b.
2 of 3

14. 12MBAFM321
8 Prepare a cash Budget for the period January to June, form the following infcrmation:
I he estimated sales and e nses are as follows:
Particulars Amount
Nov- l3 Dec- I 3 Jan- 14 Feb- 14 Mar- 14 Apr-14 May- 14 Jun- 14
Sales 2,00,000 2,20,000 1,20,000 1,00,000 1,50,000 2,40,000 2,00,000 2,00,000
Wages and
salaries
30,000 30,000 24,000 24,000 24,000 30,000 27,004 27,00a
Misc.
Expenses
27,404 27,000 21,000 30,000 24,000 27,000 27,}ili,Q 27,000
(ii) 20% of sales are on cash balance on credit.
(iiD The firm has a gross margin of 25% on sales.
(iv) 50% of credit sales are collected in the month after the sales,30ah in the second month
after the sale and 20oh in the third month.
(v) Material for the sale of each month is one month in advance, on a credit for two months.
(vi) Time lag in payrnent of miscellaneous expenses and ll3 of'salaries in one month.
(vii) Debenture worth t 40,000 sold in January.
(viii)The firm maintains a minimum cash balance of t 40,000. Funds can be borrowed
@ 12% p.a. in the multiples of { 1000, the interest being payable on monthlybasis.
(ix) Cash balance at the end of December- 13 is t 60,000.
(20 Marks)
{<**8*
3 of3

15. 3a.
b.
.J
C)
t-
E
.h
c.)
C)
ii
'* c)
=
rl.)
-o,
Fca
.5 o.r
ibo
oC
-C c.)
{< -.r.
.t>
'J tJ
u0tr
63 63
-!l
/(E
tr=
t=v
ch-
i c.)
'J -
c.w()..1
;6
6'
atE
!i CJ
>1 q<
^^ocbo
,J-
qJ<
-c
-:
Z
i-
la.
b.
c.
2a.
b.
C.
USN
Third 2016
Time: 3 hrs. Max. Marks:100
Note: l. Attswer ony TIIREE qaestionsfrom Q.hlo. I to Q.No. 6.
2. Question lYo.7 and I are conxpulsory.
3. Use of present value tuble is permitted.
What are the irnportant attributes of'lnvestment? (03 Marks)
Differentiate between share warrants and share certit-rcate. (07 Marks)
What are the various fbnns of Investment alternatives? Give adetailed account of any five.
(10 Marks)
What is a Green shoe option? (03 Nlarks)
Who are the parties involved in the new issue market? (07 Marks)
Mohan is considering the purchase of''a bond currently selling at t 878.50. l'he bond has
four years to maturity, face value of t 1000 and 8% coupon rate. The next annual interest
payment is due after one year from today. The required rate of return is 10%.
i) Calculate the intrinsic value of the bond. Should he buy the bond?
ii) Calculate the yield to rnaturity of the bond.
How does systematic risk affect the individual stock return?
The returns or1 securities A and B are given below :
Probabilitv Security A Securitv B
0.5 4 0
0.4 2
1
J
0.t 0 3
Choose your securify based on risk and return.
c. Follorving data give the market returns and the Sun
period.
(10 Marks)
(03 Manks)
(07 Marks)
Company Scrip's retunt for a particular
i) What is the beta value of Sun Cornpany Scrip?
ii) If the market retum is 2, what would be the scrip return?
a. What is RSI?
b. Write the salient features of Elliot wave theory.
c. Following are data for Anand products (t in lakhs)ano Dr()(lu0LS I ( ln laKns
Particulars Amount ({)
Assets 6000
Short term liabilities 450
8% debentures I 250
l0% bontis 500
Common stock (t l0 par) 3500
Surplus 300
Revenue 6600
Operating expenses 5950
EBIT 650
Interest 150
EBT 500
Taxes 200
Dividend 50
l of 2
(XCI Marks)
(03 lllarks)
(07 Ntarks)
lndex return 0.50 0.50 0.50 0.60 0.80 0.50 0.80 0.40 0.70
Scrirl retunr 0.30 0.60 0.40 0.50 i 0.60 0.30 0.70 0.50 0.60

16. i) Find out the following ratios : Asset turnover,
Debt / equity'ratio and Dividend payout ratio.
ii) What growth rate of EBIT can be expected?
I 2 MBABI332 I 1 2MBARNI322
Effective interest rate , Effective tax rate,
(10 Marks)
(03 Marks)
(07 Marks)
used by l{arkowitz to
(10 Marks)
return characteristics :
Tab: -1'
c. The followinE three oortfolios orovide the parti
B.
rla belowrng tnree portlolros pro arnculars glven Detow :
Portfolio Average annual return Standard deviatron Corre lati on co-effi cient
A i8 2l 0.8
B t4 Itl 0.6
C t5 8 0.9
Market l3 12
Risk free rate ol'interest is 9%.
i) Rank these por'tfcrlios using Sharpe's and Treynor's method.
ii) Compare both the indices"
a. What do you mean by market efficiency?
b. Write a brief note on various fbrms of the market efficiency.
c. Define Markowitz diversification. Explain the statistical method
obtain the risk reducing benefit.
a. Define Efficient Frontier.
b. Two assets A and B. have the following risk and
R,r:22 ; Ru:24 or:15 , ou:18
Determine the mlnimum risk portfblio for A and
b.
C.
What are the basic assumptions of CAPM model?
a. What is the standard deviation of the return on asset I and asset 2?
b. What is the co-variance between the retums on assets I and2'?
c. What is the co-efficient of correlation between the retums on assets 1 and2?
d. Explain the nature of a side - return indifference curve.
?k?k* rr*
2 af 2
(03 Marks)
(07 Marks)
(10 Marks)
(05 Marks)
(05 Marks)
(05 Marks)
(05 Marks)
a. The equity stock o1- ABC Limited is currently selling for t 30 per share. The diviCend
expected next yeff is t 2.00. the investor's required rate of return on this stock is l5Yo.Ifthe
constant growth rnoclei applies to the company, what is the expected growth rate?
(05 Marks)
(05 Marks)
Mr. Vijay is cclnsiCering an investment in the stock of XYZ corporation. ile expects to eam
a return of I7o/o in the next yeat. XYZ's beta is 1.3. Risk free rate of interest is 7oh and
Market return is 157,r. Should Mr. Vijay invest rnXYZ Corporation? (05 Marks)
d. Using the above ciata in Q7(c), what should VUay do if beta is 1.1? Assume other values
have not changed. (05 Marks)
The refurns of tw ible stat tuU ASSgTS UII er rour r)ossrDre slares ol Italure are glven Detow :
State of nature Probabilit"v Return on Asset 1 Return on Asset 2
1
I 0.10 s% a%
2 0.30 1A% 8%
1
0.50 t5% t8%
4 0.10 20% 26%
bei