Calicut University 2009 B.A Economics ch%2C %E2%80%93 VI %28Optional %E2%80%93 III%29 %E2%80%93 Financial System and Portfolio Analysis - Question Paper

I. select the accurate ans.
1) Default risk refers to
a) Non-payment
b) Payment of cash
c) Non-payment of interest on time
d) None of the above

2) Earnings per share is
a) Earnings/Equity
b) Equity/Earnings
c) Equity Earnings/No. of outstanding shares
d) None of the above

3) Which 1 is related to the Dow Theory ?
a) Secondary movements
b) Daily fluctuations
c) Primary patterns
d) All the above

4) Bond prices depend on
a) expected cash flows b) needed return
c) variable interest rate d) a and b

5) Obstacles in the way of fundamental analysis
a) Incorrectness of data
b) Future uncertainties
c) Irrational market behaviour
d) All the above (5×1=5 Marks)

II. State actual or false :
6) There are 24 stock exchanges in India.
7) CSE is the main stock exchange in India.
8) Repos are generally done for 15 days.
9) The process of discounting is found from compounding.
10) The amounts owed to the firm by its customers is known as sundry debtors.
(5×1=5 Marks)

III. Fill in the blanks :
11) The shape of the yield curve is shaped by the supply and demand forces within
every maturity range is ______________
(Market segmentation theory/Liquidity preference Theory)
12) The process of investing money and reinvesting the interest earned thereon is
known as _____________
(appreciation/compounding)
13) Bond prices and yield have ______________ relation.
(Positive/Negative)
14) The interest rate on corporate bonds is also determined by ______________
(maturity premium/non-premium)
15) The Capital problems Control Act was repealed in _____________
(1993/1992) (5×1=5 Marks)

IV. describe any 4 of the subsequent :
16) Optimum portfolio
17) Liquidity premium
18) Default premium
19) Collateral
20) Life cycle analysis. (4×1=4 Marks)

V. ans any 7 of the subsequent in not more than half a page :
21) What is the time value of investment ?
22) elaborate the functions of banking intermediaries ?
23) Distinguish ranging from over-diversification and under-diversification.
24) What is book building ?
25) elaborate industrial securities ?
26) elaborate interest rate swaps ?
27) What is efficient frontier ?
28) discuss the return on equity.
29) How will you choose the securities ?
30) elaborate the reasons for the divergence in accounting and economic values ?
(7×3=21 Marks)

VI. ans any 6 of the subsequent not more than 1 page :
31) The relevance of credit rating in the situation of financial crisis.
32) elaborate the different kinds of risk ?
33) Critically examine the indicators of financial development.
34) explain the relative roles of financial institutions.
35) Is dematting essential ?
36) Elucidate the roles of guarantors and mortgage.
37) What is the nature of trading and settlement in India ?
38) discuss the components of transaction costs.
39) elaborate the constraints of investment ?
40) discuss the roles of banking and non-banking intermediaries. (6×5=30 Marks)

VII.Answer any 3 of the subsequent not exceeding 3 pages every :
41) What is the importance of industry in the financial system of a country ?
42) Examine the basic features of random walk theory.
43) Compare and contrast the basic operations of market for call money, treasury
bill and industrial securities.
44) discuss the procedures of listing of new problems. What is the role of SEBI in
listing ?
45) explain the functions and effectiveness of stock exchanges in India.
46) elaborate the different types of stock market indices ? explain the different
problems in constructing an index. (3×10=30 Marks)

Earning:   Approval pending.