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ASSIGNMENT
DRIVE WINETR
PROGRAM
SUBJECT CODE & NAME
SEMESTER
BK ID
CREDITS
MARKS
2013
MBADS – (SEM 4/SEM 6) / MBAN2 / MBAFLEX – (SEM 4) /
PGDFMN – (SEM 2)
MF0017 - MERCHANT BANKING AND FINANCIAL SERVICES
4
B1815
4
60
Note: Answer all questions. Kindly note that answers for 10 marks questions should be
approximately of 400 words. Each question is followed by evaluation scheme.
1 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.
Answer : A Credit Rating issued by a credit rating agency is an assessment of the credit worthiness
of individual financial securities (For example, a bond) and debt issued by corporations, government
issued securities or even a country’s ability to repay debt.
Credit Ratings are assigned by rating agencies to companies and debt instruments, are designed to
gauge the likelihood that a company will default on its obligations to creditors. Thus, they give
investors a rough idea of the risk associated with
2 Give the meaning of the concept of venture capital funds. Explain the features of
venture capital fund.
Answer : Venture Capital Funding can be of different kinds. Early stage funding could be at the stage
of ideation, initial production and marketing. Expansion funding is done during commercial
production, marketing and growth (For more information refer to the article – Stages of Venture
Capital Funding). Different funds focus on different types of funding and sectors. There are however
some unifying characteristics of venture capital
3 Hire purchase is one of the important concept. There are certain features of hire purchase
agreement so explain the points of it. Differentiate between hire purchase and leasing.
Answer : Meaning and characteristics of hire purchase finance :
A method of buying goods through making installment payments over time. The term hire purchase
originated in the U.K., and is similar to what are called "rent-to-own" arrangements in the United

2. States. Under a hire purchase contract, the buyer is leasing the goods and does not obtain
ownership until the full amount of the contract is paid. The characteristics of hire-purchase system
are as under
Hire-purchase is a credit purchase.
The price under hire-purchase system is
4 Explain the concept of Swap. Write down its features and various types of interest rate swap.
Answer : Introduction of Swap :
In finance, a foreign exchange swap, forex swap, or FX swap is a simultaneous purchase and sale of
identical amounts of one currency for another with two different value dates (normally spot to
forward). Foreign Exchange Swap allows sums of a certain currency to be used to fund charges
designated in another currency without acquiring foreign exchange risk.
A foreign exchange swap consists of two legs:
a spot foreign exchange transaction, and
a forward foreign exchange transaction.
5 Elaborate on measuring exchange rate movements. Explain the factors that influence exchange
rates.
Answer : Measuring exchange rate movement:
Aside from factors such as interest rates and inflation, the exchange rate is one of the most
important determinants of a country's relative level of economic health. Exchange rates play a vital
role in a country's level of trade, which is critical to most every free market economy in the world.
For this reason, exchange rates are among the most watched, analyzed and governmentally
manipulated economic measures. But exchange rates matter on a smaller scale as well: they impact
the real return of an investor's portfolio. Here we look at some of the major forces behind exchange
rate movements. Numerous factors determine
Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
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or
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