Alagappa University 2007 M.B.A Financial Management INVESTMENT AND DERIVATIVES KET - Question Paper

(2005 onwards)
Time : 3 hours Maximum : 100 marks

PART A — (5 * eight = 40 marks)
ans any 5 ques..
All ques. carry equal marks.
every ans should not exceed two pages.

1. What is Debt pricing? Contribute your views on bond features.
2. What is Band Swaps? How will you decrease the swap risks?
3. What are the factors that have to be taken into account when pricing a new problem of shares?
4. Explain the equity evaluation based on earnings.
5. Explain why an choice has value. State the characteristics of put and call choices.
6. How does a future contract differ from a forward contract?
7. Discuss the different kinds of securities issued by the Govt. of India.
8. “Options and futures are zero-sum games”. What do you think is meant by this statement?

PART B — (4 *15 = 60 marks)
ans any 3 ques. from ques. No. nine to
ques. No. 14.
Q. No. 15 is compulsory.

9. Explain in detail the Debt pricing theorems.
10. What does the term duration mean to bond investor and how does the duration in a bond differ from maturity? What is the replaced duration and how is it used?
11. Explain the nature of equity market and elaborate the factors that have to be taken into account when pricing a new problem of shares.
12. Explain the equity evaluation under price earning ratios model.
13. What are the factors which determine the choice price? discuss in detail.
14. Describe the concept and significance of future market. Also compare futures with choices.
15. Explain the term structure of yield takes on the public debt. What is the yield structure of the Govt. securities in India?

Earning:   Approval pending.