Karnataka State Open University (KSOU) 2010 M.B.A Third Semester - Elective – A : Finance (Freshers) – 17 A : Merchant Banking and Financial Services - Question Paper
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Third Semester M.B.A. Examination, July 2010 MANAGEMENT Elective - A : Finance (Freshers) Course - 17 A : Merchant Banking and Financial Services
Time : 3 Hours Max. Marks : 75
SECTION - A
1. Answer any five questions. Each question carries two marks : (5x2=10)
a) What is private placement ?
b) Differentiate between capital market and money market.
c) What is leveraged buy out ?
d) What is factoring ?
e) Define financial lease.
f) What do you mean by credit rating ?
g) Define financial engineering.
SECTION - B
Answer any four questions. Each question carries five marks : (4x5=20)
2. Explain any five functions of financial services.
3. Explain the different corporate advisory services of merchant banker.
4. What are the advantages and disadvantages of leasing ?
5. Distinguish between hire purchase system and instalment system.
6. What are the additional facilities besides providing credit that the credit card offers to their customers ?
7. Explain the importance of credit rating.
8. Discuss the pre-issue activities relating to issue management.
9. Briefly explain the different functions of a merchant banker.
10. Discuss the mechanism involved in a factoring financial service.
11. Discuss the role of National Housing Bank in housing finance.
12. Explain the uses of credit rating to investors, issuers, intermediaries and regulators.
SECTION - D
(1x15=15)
13. ABC Ltd. is interested in acquiring the use of an asset costing Rs. 10,00,000. It has two options
i) to borrow amount at 18% p.a. repayable in 5 equal installments.
ii) to take on lease the asset for the period of five years, at the year end rentals of Rs. 2,40,000. The corporate tax rate is 50% and the depreciation is allowed on straight line method. The asset will have a salvage valve of Rs. 2,00,000 at the end of the 5th year.
You are required to advise the company about lease or buy decision.
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