Spring-2016

Get solved assignments at nominal price of

Rs.125 each.
Mail us at: subjects4u@gmail.com or contact at
09882243490
Master of Business Administration - MBA Semester 4
MF0017-Merchant Banking and Financial Services
(Book ID: B1815)
Assignment (60 Marks)
Note: Answers for 10 marks questions should be approximately of 400
words. Each question is followed by evaluation scheme. Each Question
carries 10 marks 6 X 10=60.
Q1. Rating methodology is used by the major Indian credit rating
agencies. Explain the main factors of that are analyzed in detail by
the credit rating agencies.
(Business risk analysis, financial analysis, Management evaluation,
Geographical analysis, Regulatory and competitive environment, Fundamental
analysis) 2, 2, 2,2,1,1
Answer. Rating Methodology used by the major Indian credit rating
agencies is more or less the same. The rating methodology involves an
analysis of all the factors affecting the creditworthiness of an issuer company
e.g. business, financial and industry characteristics, operational efficiency,
management quality, competitive position of the issuer and commitment to
new projects etc. A detailed analysis of the past financial statements is made
to assess the performance and to estimate the future earnings. The companys
ability to service the debt obligations over the

Q2. Give the meaning of the concept of venture capital funds. Explain
the features of venture capital fund.
(Meaning of venture capital funds, Features of venture capital funds) 3, 7
Answer. Venture capital is the money provided by investors to start firms
and small businesses with long-term growth potential. This is a very important
source of funding for start-ups that do not have access to capital markets. It

typically entails high risk for the investor, but it has the potential for aboveaverage returns.

Q3. Hire purchase is one of the important concepts. There are certain
features of hire purchase agreement so explain the points of it.
Differentiate between hire purchase and leasing.
(Concept of hire purchase, Differences between hire purchase and leasing) 5, 5
Answer. In a hire purchase system, the buyer acquires the property by
promising to pay in monthly, quarterly and half-yearly installments. The period
of payment has to be fixed while signing the hire sale agreement. Though the
buyer acquires the asset after signing the agreement, the title of ownership
remains with the vendor until the buyer pays the entire liability. When the
buyer pays the entire installment and any other obligation according to hire
purchase agreement, only then the title of ownership of goods would be
transferred to the hirer. If the hirer makes any default in the payment of any
installment, the hire vendor has the right to repossess the goods. In this case,
the amount that is already paid so far by the hirer will be forfeited.

Q4. Explain the concept of Depository receipts. Write down the

difference between American Depository Receipts (ADR) and Global
Depository Receipts (GDR) also mention the issues involved in
ADR/GDR.
(Explanation of Depository Receipts, Differences between ADR and GDR, Issues
involved in ADR/GDR) 4, 3, 3
Answer. Depository receipts are securities that are traded in foreign
currency. These receipts are issued by the foreign bank or institution which
acts as a depository of shares issued by a domestic company.
Depository receipts can be classified into sponsored and unsponsored ones.

Q5. What is Online Trading? Explain the process of online trading.

(Measuring and explanation of Online Trading, Explanation of process of Online
trading) 6, 4
Answer. Online trading is one of the crucial financial services provided by
financial institutions and merchant bankers. For example, Indiabulls Securities
Limited is one of Indias foremost stock brokerage house having a pan India

presence. The organization is a pioneer in providing online stock trading

platform in India and currently has a customer base of seven lacs customers.

Q6. Write short notes on:

a. Depository Participants
b. Benefits of Depository Systems
Answer. a. Depository Participants: All the functions performed by
depositories are actually executed by the depository participants (DPs). All
activities related to recording of allotment of securities, transfer of securities
etc. are executed through depository participants and no investor can directly
open an account with a depository. A depository can enter into an agreement
with various depository participants who would work as agents of the
depository. Depository Participant works as an intermediary between the
investor and depository and they are called as

Spring-2016
Get solved assignments at nominal price of
Rs.125 each.
Mail us at: subjects4u@gmail.com or contact at
09882243490