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Course: Financial
Institutions and Markets
Internal Assignment Applicable for September 2017 Examination
Assignment Marks: 30
Instructions:
· All
Questions carry equal marks.
· All
Questions are compulsory
· All
answers to be explained in not more than 1000 words for question 1 and 2 and
for question 3 in not more than 500 words for each subsection. Use relevant
examples, illustrations as far as possible.
· All
answers to be written individually. Discussion and group work is not advisable.
· Students
are free to refer to any books/reference material/website/internet for
attempting their assignments, but are not allowed to copy the matter as it is
from the source of reference.
· Students
should write the assignment in their own words. Copying of assignments from
other students is not allowed.
· Students should follow the following parameter for answering the assignment questions.
Question1. XYZ Ltd. is a
Govt. recognized export house with annual turnover of Rs 2200 Crores Mr Pathak
is Vice President- Finance of the Company. The company follows policy of no
hedging of the US$ exposure. What all risks that Mr. Pathak has to enlists in
his presentation to the management in a floating exchange rate scenario? (10 Marks)
Answer1.
In a floating exchange rate scenario following are the risks associated for XYZ.
Ltd that has to be tackled by the vice-president Mr. Pathak, the finance head
of
Question2. PSL Bank Ltd. is a private sector bank. The treasury
division has an immediate need to arrange Rs. 100 Crores to finance its one of
the top corporate client. However the requirement is for very short period of
around 7 days. So what sources are available for Mr. Das to raise the required
fund, who heads the treasury divisions of the Bank? (10 Marks)
Answer2.
The PSL Bank Ltd. can arrange its
requirement of 100 cr. for its top corporate clients from the below mentioned
sources.
Call/Notice Money:
·
The call money is a part of the money market
where, day to day surplus funds, mostly of banks, are traded. Moreover, the
call money market is most liquid of all short term money market segments.
·
The maturity period of all call loans vary from
1-
Question3a. LMH Ltd. Has floated an Investment Company. You are
appointed as the CEO to spearhead the investment in secondary market. So to
initiate these investments, explain the mechanism that you will follow. (5 Marks)
Answer3a.
Secondary markets allow financial
intermediaries to sell off risk exposure to other intermediaries. The secondary
market price is determined endogenously by the net worth of financiers and
bankers. When financiers have small net worth, the
Question3b. JFK Ltd. is listed Company on the exchange and the share
price is quoted at Rs. 340 as of today, the Company reported EPS of Rs. 25.00
for FY 2017. In the recently concluded board meeting, the Company announced
stock split and accordingly, the face value has been reduced to Rs5.00 from Rs.
10.00. The outstanding shares of the Company are 30, 00,000. Calculate the
number of outstanding shares of the Company post stock split and adjusted share
price of the Company post stock split. Also calculate the PE ratio of the
Company post stock split (5 Marks)
Answer3b.
The company may want to change the face value.
i) So, it will take one share of Rs.10 and make it two.
Now, the face value of each share is Rs.5.
In the given question, the outstanding share
is 30
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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