Issue Management 3rd MBA Solved Assignments

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Section A
1 Explain the SEBI guidelines regarding post-issue.
2 What is Listing and its regulations?
3 What is the difference between capital and Money Market Instruments?
4 Discuss Role of merchant bankers.
5 Explain the Types of issues – IPO, FPO, Private Placement, OFS.
6 Differentiate between ADR and GDR.
7 Explain Underwriting agreements.
8 Elaborate the concept of Performance Evaluation of Merchant Bankers.

Case Study

Most people refer loosely to the NAV per unit as NAV, ignoring the “per unit”. The net asset value is the actual value of a unit on any business day. NAV is the barometer of the performance of the scheme. The net asset value of the Fund is the cumulative market value of the assets Fund net of its liabilities. In other words, if the Fund is dissolved or liquidated, by selling off all the assets in the Fund, this is the amount that the shareholders would collectively own. This gives rise to the concept of net asset value per unit, which is the value, represented by the ownership of one unit in the Fund. It is calculated simply by dividing the net asset value of the Fund by the number of units.

Q.No 1: What is NAV?
Q.No 2: Differentiate between NAV and price?
Q.No 3: How is NAV calculated?

Section C

Q1. Break even is a point of
(A): no profits
(B): no losses
(C): no profits no losses
(D): all losses

Q2. One difference between a financial lease and operating lease is that:
(A): there is a often a call option in a financial lease.
(B): there is often an option to buy in an operating lease
(C): an operating lease is often cancellable by the lessee.
(D): a financial lease is often cancellable by the lessee.

3. What is a trust that pools the savings of a number of investors who share a common financial goal.
(A): lease
(B): venture capital
(C): mutual fund
(D): syndication

Q4. Advantages of mutual funds
(A): professional diversfiication
(B): liquidity
(C): flexibility
(D): all of the above

Q5. FPOs help to
(A): issue shares again
(B): bonds again
(C): reduce cost
(D): reduce risk

Q6. ADR and GDR help
(A): get foreign investments
(B): reduce risk
(C): increase profits
(D): increase costs

Q7. Venture capital firms invest through
(A): shares
(B): cash
(C): bonds
(D): all of the above

Q8. What provides a comprehensive review of all aspects of the project and lays the foundation for implementing the project and evaluating it when completed
(A): Appraisal
(B): syndication
(C): counselling
(D): book buiding

Q9. An issue which comes out in the market for the first time is called:
(A): FPO
(B): TPO
(C): IPO
(D): LBO

Q10. It is a mechanism where, during the period for which the book for the offer is open, the bids are collected from investors at various prices, which are within the price band specified by the issuer.
(A): Appraisal
(B): syndication
(C): counselling
(D): book buiding

Q11. A ………. is a contract calling for the lessee (user) to pay the lessor (owner) for use of an asset.
(A): IPO
(B): lease
(C): merger
(D): hire purchase

12. Advantages of securitisation are
(A): Reduces asset-liability mismatch
(B): Lower capital requirements
(C): Locking in profits
(D): all of the above

Q13. the type of private equity capital is provided as seed funding to early-stage, high-potential, growth companies
(A): merger
(B): lease
(C): hire purchase
(D): venture capital

Q14. state which is true
(A): Securitisation is off balance sheet item
(B): securitisation is highly risky
(C): securitisation is like an equity share
(D): none of the above

Q15. SPVin securitisation is
(A): Special purpose van
(B): special purpose vehicle
(C): special public vehicle
(D): specific purpose van

Q16. Tax funds
(A): are tax free
(B): are taxable
(C): are income funds
(D): are growth funds

Q17. Hedging reduces
(A): risk
(B): return
(C): profits
(D): investment

Q18. Portfolio means
(A): investment in single security
(B): investment in group of securities
(C): invesment in govt securities only
(D): investment in bonds

19. FCCB
(A): Foreign currency current bonds
(B): Foreign currency current block
(C): Foreign currency convertible bonds
(D): Free currency current bonds

Q20. FII
(A): is alike FDI
(B): is different from Fdi
(C): is in the form of business plan
(D): is selling bonds

21. Book-building is a process of price discovery used in ……..offers.
(A): private
(B): public
(C): company
(D): corporate

Q22. Mutual funds are sold at
(A): NAV
(B): market Price
(C): base price
(D): discount

Q23. Best rating among the following is
(A): AAA
(B): AA
(C): A
(D): BB

Q24. CRISIL is
(A): Credit rating agency
(B): bank
(C): financial institution
(D): VCF

Q25. VCFs help
(A): service companies
(B): SEBI
(C): govt.
(D): New companies

Q26. FPO is
(A): Fixed public offer
(B): Fixed private offer
(C): follow on public offer
(D): Free public offer

27. ADRs are
(A): Allowable depository receipts
(B): American Depository receipts
(C): American Deposit Referrals
(D): American Deposit records

Q28. Foreign investment is in the form of
(A): Shares
(B): cash
(C): services
(D): product plan

Q29. Housing Finance
(A): helps the investors
(B): helps companies
(C): helps govt
(D): helps shareholders

Q30. Institutional investors are
(A): people investing in shares
(B): companies
(C): govt.
(D): mangers

31. RII is an investor who applies for stocks for a value of not more than ……….
(A): Rs 100,000
(B): Rs 10,000
(C): Rs 10,00,000
(D): Rs 1,000

32. Balanced funds have the features of
(A): income funds
(B): growth funds
(C): both of the above
(D): none of the above

Q33. Money collected from mutual fund is invested in
(A): shares
(B): debentures
(C): tax saving bonds
(D): all of the above

Q34. In which type of lease the lease contains a bargain purchase option to buy the equipment at less than fair market value
(A): Operating
(B): Financial
(C): Cancellable
(D): non cancellable

Q35. A poor credit rating indicates
(A): high rsk of default
(B): low risk of default
(C): high creditworthiness
(D): high net worth

36. Credit ratings are calculated from financial history and ……….
(A): current assets
(B): current liabilities
(C): current assets and liabilities
(D): fixed assets

Q37. which is the financial practice of pooling various types of contractual debt such as residential mortgages
(A): Securitization
(B): credit rating
(C): lease
(D): hire purchase

Q38. Credit rating
(A): reduces default risk
(B): helps issuers ensure their creditworthiness
(C): helps investors inform about company’s credentials
(D): all of the above

Q39. …………. is essentially a process used by companies raising capital through Public Offerings
(A): Book Building
(B): Loan syndication
(C): venture capital
(D): mergers

40. Price band is used for which process?
(A): Appraisal
(B): syndication
(C): counselling
(D): book buiding