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ASSIGNMENT
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DRIVE
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WINTER 2014
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PROGRAM
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MBADS (SEM 4/SEM 6)MBAFLEX/ MBA (SEM 4)
PGDBMN (SEM 2)
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SUBJECT CODE & NAME
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BK ID
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B1812
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CREDITS
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4
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MARKS
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60
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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.
Q.1. Explain the maintenance of books of
accounts, records etc. under the general obligations and responsibilities of
merchant bankers.
Answer:Every asset management company for each scheme shall keep and maintain
proper books of accounts, records and documents, for each scheme so as to
explain its transactions and to disclose at any point of time the financial
position of each scheme and in particular give a true and fair view of the
state of affairs of the fund and intimate to the Board the place where such
books of accounts, records and documents are maintained. The asset management
company shall follow the accounting policies and standards as specified in
Ninth Schedule so as to provide appropriate details of the scheme wise
disposition of the assets of the fund at the relevant accounting date and the
performance during that period together with information regarding distribution
or accumulation of income accruing to the unitholder in a fair and true manner.
Maintenance of books of accounts, records,
etc.
Every Portfolio Manager shall keep and
Q.2. The methodology of issuing securities
by giving a price range is known as book building method. A book building is a
price discovery mechanism. Based on this write the methods and guidelines of
book building. Explain the offer in a prospectus on book building 75 percent.
Write the key role of the under writer and benefits for the company.
Answer: Book building is a process of generating, capturing, and recording
investor demand for shares during an initial public offering (IPO), or other
securities during their issuance process, in order to support efficient price
discovery. Usually, the issuer appoints a major investment bank to act as a
major securities underwriter or bookrunner.
The "book" is the off-market
collation of investor demand by the bookrunner and is confidential to the
bookrunner, issuer, and underwriter. Where shares are acquired, or transferred
via a bookbuild, the transfer occurs off-market, and the transfer is not
guaranteed by an exchange’s clearing house. Where an underwriter has been
appointed, the underwriter bears the risk of non-payment by an acquirer or
non-delivery by the seller.
Book building is a common practice in
developed countries and has recently been making inroads into emerging markets
as well. Bids may be submitted on-line, but the book is maintained off-market
by the bookrunner and bids are confidential to the bookrunner. Unlike a public
issue, the book building route will see minimum number of applications and
large order size per application. The price at which new shares are issued is
Q.3. Bancassurance means selling insurance
product through banks. Give a brief introduction of bancassurance and write the
benefits of bancassurance to the banks and insurance companies.
Answer:Bancassurance arrangements are very common in Europe, where the practice
has a long history. In the United States, bancassurance was prohibited until
the repeal of the Glass Steagall Act in 1999, and has not yet caught on as a
practice for most forms of insurance. Bancassurance remains prohibited in a
number of other countries; however, the global trend has been toward the liberalization
of banking laws.
The bank insurance model (BIM), also
sometimes known as bancassurance, is the partnership or relationship between a
bank and an insurance company whereby the insurance company uses the bank sales
channel in order to sell insurance
Q.4.Explain the procedure for mergers under
the merchant banking.
Answer:A merchant bank is a financial institution that provides capital to
companies in the form of share ownership instead of loans. A merchant bank also
provides advisory on corporate matters to the firms they lend to. In the United
Kingdom, the term "merchant bank" refers to an investment bank.
The term Merchant Banking has its origin in
the trading methods of countries in thelate eighteenth and early nineteenth
century when trade-taking place was financed by bill of exchange drawn by
merchanting houses. At that time the merchants weremerely financing their own
activities. As international trade grew and other lesser” known names wanted to
import goods from abroad, the established merchants “lenttheir names‘ to the
newcomers by agreeing to accept bills of exchange on their behalf.The
acceptance houses
Q.5. Explain the concept of credit rating.
Write the important parameters of a company under credit rating and aim of
credit rating.
Answer:It is an assessment of the credit worthiness of a borrower in general
terms or with respect to a particular debt or financial obligation. A credit
rating can be assigned to any entity that seeks to borrow money – an
individual, corporation, state or provincial authority, or sovereign
government. Credit assessment and evaluation for companies and governments is
generally done by a credit rating agency such as Standard & Poor’s or
Moody’s. These rating agencies are paid by the entity that is seeking a credit
rating for itself or for one of its debt issues. For individuals, credit
ratings are derived from the credit history maintained by credit-reporting
agencies such as Equifax, Experian and TransUnion.
Credit ratings for borrowers are based on
substantial due diligence conducted by the rating agencies. While a borrower
will strive to have the highest possible credit rating since it has a major
impact on interest rates charged by lenders, the
Q. 6. Money market is a financial
instruments and financial assets that are traded. Explain the features of money
markets in India. Write down the important participants of in money market.
Explanation of features of money markets in
India
Important participants of money markets
Answer:The main features of Indian Money Market are as follows:
1. Dichotomy:The Indian Money market is divided between two sectors, namely organised
sector and unorganised sector. There is very little cooperation and contact
between them.Consequently the rate of interest in both the markets varies
widely.
2. Seasonal Variations:Considering the demand f
Dear students get fully solved assignments
Send your semester &
Specialization name to our mail id :
“ help.mbaassignments@gmail.com ”
or
Call us at : 08263069601
(Prefer mailing. Call in emergency )
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