3rd sem FInance


Winter / November 2011
Master of Business Administration
Semester III
MF0010 –Security Analysis & Portfolio Management- 4 Credits
(Book ID: B1208)
Assignment
Set- 1 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. Explain the modes of investment
Q2. This distribution of returns for share Y and the market portfolio M is given below
Returns (%)
Probability
Y
Z
0.30
30
-10
0.40
20
20
0.30
0
30
You are required to calculate the expected return of security Y and the market portfolio, the covariance between the market portfolio and security Y and beta for the security.
Hint:ERp= 17 ; Covariance PM = – 168.0 ; Beta= -0.636
Q3. Briefly explain the Dow Theory
Q4. Explain the strategies for overcoming psychological biases
Q5. List the major types of investment risks.
Q6. How are the factors identified for APT?
Winter / November 2011
Master of Business Administration
Semester III
MF0010 – Security Analysis & Portfolio Management – 4 Credits
(Book ID: B1208)
Assignment
Set- 2 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. What are derivatives? How are they used to hedge risk?
Q2. How is company analysis useful in determining the intrinsic value of a security?
Q3. What are the implications of EMH to fundamental and technical analysis?
Q4. : An 8% coupon, 30-year maturity bond with par value of Rs. 1,000 paying 60 semi-annual coupon payments of Rs. 40 each. Suppose that the interest rate is 8% annually, or r = 4% per six-month period.What is the value of the bond?
Hint : Rs.810.70
Q5. What are the limitations of CAPM
Q6. What are the investment avenues available for investors who wish to make foreign portfolio investments?
Winter / November 2011
Master of Business Administration
Semester III
MF0010 –Security Analysis & Portfolio Management- 4 Credits
(Book ID: B1208)
Assignment
Set- 1 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. Explain the modes of investment
Q2. This distribution of returns for share Y and the market portfolio M is given below
Returns (%)
Probability
Y
Z
0.30
30
-10
0.40
20
20
0.30
0
30
You are required to calculate the expected return of security Y and the market portfolio, the covariance between the market portfolio and security Y and beta for the security.
Hint:ERp= 17 ; Covariance PM = – 168.0 ; Beta= -0.636
Q3. Briefly explain the Dow Theory
Q4. Explain the strategies for overcoming psychological biases
Q5. List the major types of investment risks.
Q6. How are the factors identified for APT?
Winter / November 2011
Master of Business Administration
Semester III
MF0010 – Security Analysis & Portfolio Management – 4 Credits
(Book ID: B1208)
Assignment
Set- 2 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. What are derivatives? How are they used to hedge risk?
Q2. How is company analysis useful in determining the intrinsic value of a security?
Q3. What are the implications of EMH to fundamental and technical analysis?
Q4. : An 8% coupon, 30-year maturity bond with par value of Rs. 1,000 paying 60 semi-annual coupon payments of Rs. 40 each. Suppose that the interest rate is 8% annually, or r = 4% per six-month period.What is the value of the bond?
Hint : Rs.810.70
Q5. What are the limitations of CAPM
Q6. What are the investment avenues available for investors who wish to make foreign portfolio investments?
Winter / November 2011
Master of Business Administration
Semester III
MF0011 – Mergers & Acquisitions – 4 Credits
(Book ID: B1209)
Assignment
Set- 1 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. Explain the types of mergers.
Q2. Firm X is having value of Rs 400 lakh and value of the firm Y is 150 lakh. If the two firms combine, the estimated cost savings would have present value of Rs 60 lakh. Firm X will have to make payments equal to Rs 170 lakh while making the acquisition. What will be the value of Synergy, Costs and Net Gain from the Merger?
Hint: Value of Synergy=60 lakhs , cost = 20 Lakhs , Net gain = 40 lakhs
Q3. Merger should be a capital budgeting decision. Explain.
Q4. Explain international joint ventures. What are reasons of joint venture failure?
Q5. The following is the balance sheet of XYZ Ltd:
Liabilities
Rs.
Assets
Rs.
Share Capital: 6000 Equity Shares of Rs. 100 each, fully paid
6,00,000
Goodwill
70,000
General Reserve
2,50,000
Plant and Machinery
4,60,000
Profit & Loss Appropriation A/c
80,000
Furniture and Fittings
1,02,000
Bills Payable
70,000
Stock
4,36,000
Sundry Creditors
2,45,000
Debtors
1,34,000
Preliminary Expsenses
20,000
Cash at Bank
23,000
12,45,000
12,45,000
If (i) ABC Ltd. purchases the business of XYZ Ltd. (ii) Goodwill is valued at Rs. 2,00,000 while stock is valued at Rs. 4,16,000. Other assets are considered worth their book values. (iii) ABC Ltd. does not take over Cash at Bank (iv) Consideration is to be discharged in the form of 90,000 fully paid equity shares of Rs. 10 each, valued at par and the balance in cash.
Calculate the consideration.
Hint : Consideration= 900000 and cash balance 97000= total 997000.
Winter / November 2011
Q6. Explain the key regulatory provisions of M&A under:
(a) FEMA, 1999
(b) Listing Agreement
Master of Business Administration
Semester III
MF0011 – Mergers & Acquisitions – 4 Credits
(Book ID: B1209)
Assignment
Set- 2 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. What are the steps for successful mergers?
Q2. What are the key factors contributing to M&A activities?
Winter / November 2011
Q3. Explain the following
(a) Spin-off
(b) Sell-off
(c) Equity carve out
(d) ESOP
Q4. What are the different methods of business valuation?
Q5. . Explain the political, cultural and HRM issues in M&A.
Q6. Explain the key guidelines of takeovers.
Winter / November 2011
Master of Business Administration
Semester III
MF0012 –Taxation Management- 4 Credits
(Book ID: B1210)
Assignment
Set- 1 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. Tax planning may be effective in every area of business management. Discuss some of the important areas where tax planning may be attempted.
Q2. When minors are not allowed to be employed under the Constitution of India, can a minor still have income? If yes then how? Analyse the exemption from income-tax available in the case of a minor child.
Q3. Profit and Loss A/c of CS and Daughters, a partnership firm is as follows:
Particulars
Rs.
Particulars
Rs.
Establishment and other expenses
3,00,000
Gross Profit
6,60,000
Interest on capital to partners @ 24% p.a.
48,000
Rent from House Property
60,000
Interest on loan to partners @ 20%
20,000
Interest from Government securities
32,000
Interest on loan to Mr. C @ 24%
24,000
Municipal taxes of let out house property
10,000
Repairs of the house property
5,000
Donations to National Children’s Fund
10,000
Remuneration to partners
2,00,000
Int. on money borrowed for investment in Govt. securities
10,000
Sales tax
25,000
Net Profit
1,00,000
Winter / November 2011
7,52,000
7,52,000
Other Information:
a) Out of municipal taxes of Rs. 10,000; Rs. 6,000 was payable on 31.3.2011 and the same was paid on 30.6.2011.
b) Sales tax includes a sum of Rs. 10,000 payable on 31.3.2011. Rs. 6,000 was paid on 31.7.2011 and Rs. 4,000 was paid on 30.11.20 although the due date of payment under the Sales Tax Act was 14.5.2011.
Compute:
a) The book profit
b) The maximum amount of remuneration deductible u/s 40(b)
c) The total income of the firm assuming that the maximum remuneration allowable u/s 40(b) is paid to the partners.
d) Also state the income from the firm which will be taxable in the hands of the partners.
Hint: Book profit= 2,79,000; maximum amount of remuneration=1,64,100; Total Income= 1,71,100; Total Income of each partner as business income =Rs.1, 00,050
Q4. Write a note on income from capital gain
Q5. Discuss the taxable services under the service tax.
Q6. Sameer who is a person with disability submits the following information. Compute (a) the taxable income; (b) the tax payable for the assessment year 2010-11.
Rs.
i) Salary per annum 180,000
ii) Rent received per month 3,500
iii) Dividend from cooperative society 1,000
iv) Interest on bank deposits 8,000
v) Interest on Government securities 1,000
vi) Winnings from lotteries (gross) 4,000
vii) NSC (VIII issue) purchased during the year 10,000
viii) Deposit under PPF Scheme 30,000
He earned a long-term capital gain of Rs.12,000 on sale of gold during the year.
Hint: Total Income = 145,400 ; Tax payable = 5710
Winter / November 2011
Master of Business Administration
Semester III
MF0012 –Taxation Management- 4 Credits
(Book ID: B1210)
Assignment
Set- 2 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. Compute the net wealth and wealth tax liability of G Ltd. as on 31-3-2011. The company is engaged in jewellery business-exports and domestic sales:
Rs
Factory buildings
Bank balance
Unaccounted cash balance
Silver ware
Gold ornaments
Motor cars
Guest house in London
43,00,000
12,20,000
6,50,000
94,00,000
96,00,000
15,00,000
8,00,000
The company has taken a loan of Rs. 6,00,000 by mortgaging guest house and built the factory premises.
Hint : Net Wealth taxable Rs. 14,50,000; Wealth tax 14,500
Q2. Write short note on:
(a) Cost of Acquisition
(b) Cost of Improvement
(c) Expenditure on Transfer
(d) Transfer
Q3. Write a note on taxation of perquisites in the hands of employees.
Q4. Nature of business has a major impact on tax planning. Explain.
Winter / November 2011
Q5. Prakash Ltd. has unit Y which is not functioning satisfactorily. The details of its fixed assets are:
Asset
Date of acquisition
Book value(Rs. lakhs)
Land
Goodwill (raised in books on March 31,2005)
Machinery
Plant
Feb.10, 2003
April 5, 1999
April 12, 2004
30
10
40
20
The written down value is Rs.25 lakhs in case of machinery and Rs.15 lakhs in case of plant. The liabilities on this unit on March 31, 2011 are Rs.35 lakhs. There are two options (as on March 31, 2011):
a. Slump sale to Z & Co for a consideration of Rs.85 lakhs.
b. Individual sale of assets for the following consideration: Land Rs.48 Lakhs, Goodwill Rs.20 Lakhs, Machinery Rs.32 Lakhs, Plant Rs.17 Lakhs.
Which option is to be chosen and why? The other units are deriving taxable income and there are no carry forward of losses or depreciation for the company as a whole, Unit Y was started on January 1, 2005.
Hint : Tax liability Option 1 = 8976i ; Tax liability Option2 =13.5762
Option 1 is better
Q6. Define Clubbing of Income. What are the key provisions for income clubbing?
Winter / November 2011
Master of Business Administration
Semester III
MF0013 –Internal Audit and Control- 4 Credits
(Book ID:B1211)
Assignment
Set- 1 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. Discuss, in brief, the advantages and limitations of auditing.
Q2. What is internal check? Explain with example.
Q3. Discuss about the codes of ethics of internal auditor
Q4. Explain the use of Sampling technique in Internal audit
Q5. Explain the internal control system in banks.
Q6. Discuss about the Computer Assisted Audit Techniques (CAATs).
Master of Business Administration
Semester III
MF0013 –Internal Audit and Control- 4 Credits
(Book ID: B1211)
Assignment
Set- 2 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1. Discuss the main scope and objects of internal audit?
Q2. What matters the internal auditor should consider in developing his overall audit plan?
Winter / November 2011
Q3. What matters the internal auditor should consider in developing his overall audit plan?
Q4. Explain the steps of evaluating internal control system using flow chart
Q5. Describe the features of a good internal audit report.
Q6. Explain the appraisal of accounting system and related internal control.

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