MA0046 - MERCHANT BANKERS

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ASSIGNMENT

DRIVE	WINTER 2015
PROGRAM	MBA(SEM 4)
SUBJECT CODE & NAME	MA0046MERCHANT BANKERS
BK ID	B1812
CREDITS	4
MARKS	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.

Question.1. How does a merchant banker get registered with SEBI? What are the eligibility criteria?

Answer:The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India. It was established in the year 1988 and given statutory powers on 12 April 1992 through the SEBI Act, 1992.

Initially SEBI was a non statutory body without any statutory power. However, in 1995, the SEBI was given additional statutory power by the Government of India through an amendment to the Securities and Exchange Board of India Act, 1992. In April 1988 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India.

The SEBI is managed by its members, which consists of following:

·         The chairman who is nominated by Union Government of India.

·         Two members, i.e., Officers from Union

Question.2. How does an Indian Company raise funds from the foreign markets?Differentiate between ADRs and GDRs.

Answer:Raising funds from foreign markets

Funding is the act of providing resources, usually in the form of money (financing), or other values such as effort or time (sweat equity), for a project, a person, a business, or any other private or public institution. The process of soliciting and gathering funds is known as fundraising.

Question.3. Illustrate some of the fund based financial services.

Answer:WORKING CAPITAL FINANCING:A firm's working capital is the money available to meet current obligations (those due in less than a year) and to acquire earning assets. Chinatrust Commercial Bank offers corporations Working Capital Finance to meet their operating expenses, purchasing inventory, receivables financing, either by direct funding or by issuing letter of credit.

Key Benefits

·         Funded facilities, i.e. the bank provides funding and assistance to actually purchase business assets or to meet business

Question.4. Explain the essentials of an Insurance Contract.

What is Bancassurance?

Answer:Essentials of an Insurance Contract: To make contract of insurance valid in the eye of law, some essential elements must be considered in its process of validity. The insurance contract, like any other contracts must satisfy the usual conditions of a contract. The essentials of insurance contracts are as follows:

1. Agreement: Agreement means communication by the parties to one another of their intentions to create legal relationship. For a valid contract of

Question.5. Explain the benefits and limitations of Leasing.

Answer:Leasing is becoming a preferred solution to resolve fixed asset requirements vs. purchasing the asset. While evaluating this investment, it is essential for the owner of the capital to understand whether leasing would yield better returns on capital or not. Let us have a look at leasing advantages and disadvantages:

Benefits of Leasing:

·         Balanced Cash Outflow: The biggest advantage of leasing is that cash outflow or payments related to leasing are spread out over several years, hence saving the burden of one-time significant cash payment. This helps a business to maintain steady cash-flow profile.

·         Quality Assets: While leasing an asset, the ownership of the asset still lies with the lessor whereas the lessee just pays rental

Question.6. Illustrate the concept of effective portfolio management to minimise risk and maximisereturns.

Effective portfolio management to minimise risk andmaximise returns

Answer:A portfolio consists of a number of different securities or other assets selected for investment gains. However, a portfolio also has investment risks. The primary objective of portfolio theory or management is to maximize gains while reducing diversifiable risk. (Diversifiable risk is so named because the risk can be reduced by diversifying assets. Systemic risk, on the other hand, cannot be reduced through diversification, since it is a risk that affects the entire economy and most investments. So even the most optimized portfolio will still be subject to systemic risk.)

Traditional portfolio management is a nonquantitative approach to balancing a portfolio with different assets, such as stocks and bonds, from different companies and different sectors as a way of reducing the overall risk of the portfolio. The

Dear students get fully solved  SMU MBA assignments

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