MBA/Even/MB404/2018-19 (Regular)

Enrolment No.

University of Engineering & Management, Jaipur

(Established by Act of State Govt. & u/s 22 of UGC Act, Ministry of HRD, Govt. of India)

University Examination
MBA,2nd year, 4th Semester
Subject Code-FM404 Total Marks – 100
Subject- Financial Institutes And Markets. Time Duration –3hrs.
All the answers should be in brief and to the point.
Strike off all the blank pages of copy, after completing your work.
The students are advised not to write anything on the question paper other than Enrolment No.

Group-A
(Answer any ten questions) [10*1=10]
1. Choose the correct option:
i. SEBI is a
(a) Advisory body (2) Statutory body
(b) Constitutional body
(c) Non-statutory body
(d) Registered as a Society
ii. In the call money market, time repayment varies from
(a) 1–365 days (b) 1–14 days (c) 1–21 days (d) 1–164
days
iii. . Banks that are more liquid are generally:
A. also more profitable than less liquid banks.
B. as profitable as less liquid banks.
C. less profitable than less liquid banks.
D. more likely to fail.
iv. We have different option to invest the money, similarly we may deposit to earn the interest
such Interest rate exist owing to -----.
A. Opportunity cost
B. Fixed cost
C. Variable cost
D. Semi- variable cost
v. Bonds without maturity dates are which of the followings?
A. Zero coupon bonds
B. Coupon securities
C. Consols
D. Preferred Bonds
vi. How many times has financial emergency been declared in
India so far ?
(a) 5 times
(b) 4 times
(c) Once
(d) Never
(e) None of these

7. New issue market refers to

(a) Commodity market (b) Primary market
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(c) Secondary market (d) Stock market

8. The period of future contract generally varies from

(a) 1–14 days (b) 3–21 days
(c) 3–21 months (d) 1–2 years

9 What is the full form of NSDL?

(a) National Securities Depository Limited
(b) National Securities Demanding Liability
(c) National Sample Depository Limited
(d) National Sample Driven Land
(e) None of these

CRISIL has been promoted by ____ and _____.

A. ICICI, UTI
B. IDBI, SBI
C. AXIS, UTI
D. PNB, SBI

11. _______ operates in Inter-bank call money market.

A. Scheduled commercial banks
B. Co-operative banks
C. Financer house of India
D. All of the above

12. ‐‐‐‐‐‐‐‐‐‐‐‐‐‐is a financial intermediary who helps to mobilize and transfer capital from those
who possess it to those who need it.
A. Lease finance
B. Venture capital
C. Merchant banker
D. hire purchaser .

13.Which of the following represents correct meaning of ‘REPO RATE’?

(a) Rate on which RBI sells Government Securities to Banks

(b) Rate for borrowing rupees by banks from RBI
(c) Rate offered by banks to their prime customers
(d) Rate applicable for grant of priority sector loans
(e) None of these

14. Savings bank accounts are opened by-

(a) Trading entities, manufacturing entities and individuals for savings purposes
(b) Traders and manufactures for business purposes
(c) Individuals for savings purposes
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(d) Limited companies and partnerships for savings purposes

(e) Cooperative banks for savings

16. Short-term finance is usually for a period ranging up to

A. 6 months
B. 1 Year
C. 2 Years
D. 5 Years

Group-B
(Answer any five questions) [5*6=30]

2. Explain the different kinds of leasing. Distinguish operating lease from financial lease.
3. Discuss in detail Recent Developments in Capital Market of India
4. You are a finance expert. One of your friends comes to you and tells you that the capital
market and the money market are one and the same, whereas you differ with him. How
would you convince him? Give any four reasons.
5. What are NPA’s? Describe the major factors that contribute to high levels of NPA in
India. Explain the steps taken by banking sector to resolve this problem
6. “In today’s Commercial world, the stock exchange performs many vital functions.” Do
you agree? Give any four reasons in support of your answer. SEBI is the watch dog of the
securities markets”. Do you agree? Give reasons.
7. Mutual funds are an important segment of financial markets. How is this role performed?
Also discuss the management of a mutual fund company.

Group-C
(Answer any four questions) [4*15=60]

9. Mr Raman was holding 1,000 equity shares of Infosys Limited. To raise the funds, the
company offered shares in the ratio 5:1 against the shares held by him at a price below the
market price, which he accepted. As the shares were in physical form, he contacted a depository
participant to convert them into electronic form. Later, after few years, he needed money for his
child’s education and decided to sell the shares.
(a) Name the method of issuing further equity shares by the company.
 (b) Name the term used to convert the shares into electronic form.
 (c) Advice Mr. Raman how he can sell his shares to arrange the funds
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10. SEBI is the watch dog of the securities markets”. Do you agree? Give reasons.

11. What was the modus operandi of the Harshad Mehta scam?

12. 'Stock exchanges in India have not served their purpose.' Do you agree? Validate your
arguments.
13. Priyanka’s grandfather who was unwell, called her and gave her a gift packet.  Priyanka
opened the packet and saw many crumpled share certificates, debentures and bonds inside. Her
grandfather told her that they had been left behind by her late father. As no trading is now done
in physical form, Priyanka wants to know the process by adopting which she is in a position to
deal with these share certificates, debentures and bonds.  
a) Identify and state the process. 
b) Also give two reasons to Priyanka why dealing with shares, debentures and bonds in physical
form had been stopped.

14. The directors of a company want to modernise its plant and machinery by making a public
issue of shares. They wish to approach stock exchange, while the finance manager prefers to
approach a consultant for the new public issue of shares. Advise the directors whether to
approach stock exchange or a consultant for new public issue of shares and why? Also advise
about the different methods which the company may adopt for the new public issue of shares.