Management of Financial Service (EDL 307)-Semester III

Management of Financial Service (EDL 307)-Semester III

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1st Module Assessment

IPO stands for __________.

Select one:

a.

Initial Preference Offering

b.

Initial Private Offering

c.

Initial Public Offering

d.

Initial Price Organisation

Question 2. Financial services through the network of elements such as ________, serve the needs of individuals, institutions and Corporate.

a.

Financial institutions

b.

Financial markets

c.

Financial instruments

d.

All of these

Question 3. Merchant banks deal with funds raised through ____________ and capital market.

a.

Financial Market

b.

Money Market

c.

Primary Market

d.

Capital Market

Question 4. The term _______________ is defined as a central location for keeping securities on deposit.

a.

Instrument

b.

Institutions

c.

Depository

d.

None of these

Question 5. _________ encompasses all institutions dealing in fresh issues.

a.

New issues Market

b.

Secondary Market

c.

Money Market

d.

Capital Market

Question 6. Registration of brokers is made _______.

a.

compulsory

b.

optional

c.

no need

d.

none of these

Question 7. Functions of Finacial Services include:

a.

Mobilization of Savings

b.

Allocation of Funds

c.

Specialized Services

d.

All of these

Question 8. To regulate the securities market and to protect the investor’s interest ________ has been created by the Government of India.

a.

RBI

b.

SBI

c.

SEBI

d.

IRDA

Question 9. The objectives of SEBI include _______________.

a.

To promote the development of the market

b.

To protect the interests of inventors

c.

To regulate the securities market

d.

All of these

Question 10. The following one is a kind of fee based activity of a financial intermediary.

a.

hire purchase financing

b.

capital issue management

c.

leasing

d.

underwriting

__________ includes all activities involved in the transformation of savings into investment. Select one:  a. Financial system  b. Financial service  c. Economic system  d. Saving system

Question 11. In India Merchant banking along with management of public issues and loan syndication covering activities like:

a.

Project counseling

b.

Portfolio management

c.

Investment counseling

d.

All of these

Question 12. Role of Merchant Bankers____________.

Select one:

a.

Mobilization of Funds

b.

s

c.

Innovation

d.

All of these

Question 13. Book Building Process is managed by the_________.

a.

Registrar

b.

Book Runner

c.

Lead Manager

d.

Book Runner & Lead Manager

Question 14. The price of new issue is decided by the company along with its _______ .

a.

Merchant Banker

b.

SEBI

c.

Stock Exchange

d.

Banks

A prospectus which does not have details of either price or number of shares offer or the amount of issue is called: Select one: 

a. Red herring prospectus 

b. Statement in lieu of prospectus 

c. Shelf prospectus 

d. None of these

Question 15. Name the process by which a demand for the securities proposed to be issued by a body corporate is elicited.

a.

Green Shoe Option

b.

IPO

c.

Book Building

d.

FPO

Question 16. Post- Issue Managemnt activities include:

a.

Analysis of Collection

b.

Processing of Data

c.

Issue of Refund Orders

d.

All of these

Question 17. Lead Merchant Banker should advice the issuer to enter into ____________ with a particular intermediary for the purpose of issue management.

Select one:

a.

Memorandum of Understanding

b.

ROC

c.

Agreement

d.

Arrangement

30

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2nd Module Assessment

Which agency regulates and supervises NBFCs?

Select one:

a.

Finance Ministry

b.

SEBI

c.

RBI

d.

Respective state government

Question 2. The feature of a mutual fund, where it spreads the investment in varied stocks and sectors by pooling the funds of various investors, is called as ______________.

a.

Diversification

b.

Professional Management

c.

Affordability

d.

Profit

Question 3. For a company to register as a NBFC it should have a minimum net owned fund of _____.

a.

Rs 25 lakh

b.

Rs 1 crores

c.

Rs 2 crores

d.

Rs 5 crores

Question 4. NBFCs are required to accept public deposit for a maximum period of ___ months?

a.

36 months

b.

48 months

c.

60 months

d.

120 months

Question 5. _______________ ended fund are highly liquid.

a.

Close Ended

b.

Old

c.

Open Ended

d.

New

Question 6. Which of the following is not the part of organized sector of Indian Money Market?

a.

Mutual Funds

b.

Chit Funds

c.

NBFCs

d.

RBI

Question 7. Which of the following does not have any roles in regulation of NBFCs?

a.

National Housing Bank

b.

SIDBI

c.

Reserve Bank of India

d.

MCA

Question 8. What is an open-ended mutual fund?

a.

It is the one that has an option to invest in any kind of security

b.

It has units available for sale and repurchase at all times.

c.

It has an upper limit on its NAV

d.

It has a fixed fund size

Question 9. Mutual funds in India are permitted to invest in____________.

a.

Securities

b.

Securities & Gold

c.

Securities other than Real Estate

d.

Securities, Gold and Real Estate

Question 10. A Non-Banking Financial Company (NBFC) is a company registered under the _______.

a.

RBI Act 1934

b.

Companies Act, 2013

c.

NBFC Act 1956

d.

Government Securities Regulations, 1913

Units of _____________ must be listed on the stock exchange. Select one:  a. Sector Funds  b. Arbitrage Funds  c. Close ended Funds  d. Liquid Funds

Question 11. The value of one unit of investment in Mutual fund is called the _______________.

a.

Net Asset Value

b.

Issue value

c.

Market Value

d.

Gross Asset Value

Question 12. The seller can repossess the goods in case of default in payment .

a.

Interest 

b.

Hire Charge

c.

Payment

d.

Credit

Question 13. Which of the following activity is not permissible for NBFC?

a.

loans and advances

b.

acquisition of shares

c.

insurance business

d.

construction of immovable property

Question 14. Which of the following is false about NBFC?

a.

NBFC cannot accept demand deposits

b.

NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself

c.

deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs

d.

NBFC cannot undertake insurance business

___________ schemes not exposed to sudden and large movements of funds. Select one:  a. Fixed maturity plan  b. Close-Ended Funds  c. Open-Ended Funds  d. Interval fund

Question 15. A non-banking institution that has a principal business of receiving deposits under any scheme or arrangement in one lump sum or in installments by way of contributions is known as:

a.

Principal non-banking company

b.

Residential non-banking company

c.

Residuary non-banking company

d.

Optional non-banking company

Question 16. ________ is a method of investing in mutual funds wherein an investor chooses a mutual fund scheme and invests a the fixed amount of his choice at fixed intervals.

a.

Systematic Transfer Plan

b.

Systematic Investment Plan

c.

Systematic Innovative Plan

d.

Systematic Withdrawal Plan

Question 17. ____________ is a facility provided by banks to investors in new fund offers (NFOs) of mutual funds.

a.

ASBA

b.

CASBA

c.

MASBA

d.

NASA

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3rd Module Assessment

Hire Purchase Act passed in the year_____. Select one:  a. 1969  b. 1972  c. 1982  d. 1976

Consumer loans are granted for _____________ period.

a.

Medium

b.

Short

c.

Long

d.

Both Long & Medium

Question 2. Equipment leasing is _______________ financial service.

a.

fund based

b.

fee based

c.

non-fund based

d.

All of these

Question 3. In hire purchase depreciation can be claimed by the______.

a.

Hirer

b.

Vendor

c.

Financiers

d.

All of these

Question 4. _____________ is pooling of small savings.

a.

Mutual fund

b.

Credit rating

c.

Insurance

d.

Guarantee

Question 5. CIBIL stands for ______________.

a.

Credit Information Bureau of India ltd

b.

Central investment Board of India Ltd

c.

Credit and Investment Bureau of India ltd

d.

None of these

Question 6. _______________ is a method of renting assets.

a.

Hire Purchase

b.

Lease

c.

Hedge Finance

d.

Credit Rating

Question 7. In _______________ lease, leasing company assumes risk of obsolescence.

a.

Financial lease

b.

Operating lease

c.

Leverage lease

d.

Cross boarder lease

Question 8. The limitations of credit rating include ________.

a.

Rating charges

b.

Industry specific

c.

Governance issues

d.

All of these

Question 9. _______________ lease contracts are usually non cancellable.

a.

Financial lease

b.

Operating lease

c.

Leverage lease

d.

Cross boarder lease

Question 10. ___________ refers to the raising of finance by individuals for meeting their personal expenditure or for the acquisition of consumer durable goods.

a.

Housing Finance

b.

Consumer Finance

c.

Business Finance

d.

Local Finance

Question 11. ________ is an agreement under which a company or a firm acquires a right to make use of a capital asset like machinery, on payment of agreed fee called rental charges.

a.

Hire Purchase

b.

Leasing

c.

Mutual Fund

d.

Factoring X

Question 12. In India, banks are permitted to carry on hire purchase business:

a.

Directly

b.

Through its Departments

c.

Through subsidiary

d.

Any of the above

Question 13. Which of the following is/are types of consumer credit?

a.

Revolving credit

b.

Unsecured credit

c.

Secured credit

d.

All of these

Question 14. In ____________ leasing, the risk of obsolescence is assumed by the lessee.

a.

Operating lease

b.

Leverage lease

c.

Financial lease

d.

Sale and lease back

_______ is an ongoing credit arrangement.

a. Unsecured Credit 

b. Fixed Credit 

c. Cash loans 

d. Revolving Credit

Question 15. Consumer Credit accelerates ____________.

a.

Investments in the consumer durable industry

b.

Balancing interest rate

c.

Increasing investment awareness

d.

Supply of goods

Question 16. The three C’s of Consumer Credit are:

a.

Character, capital and charity

b.

Character, capacity and charity

c.

Character, capacity and capital

d.

Capital, capacity and conciliate

Question 17. The features of hire purchase includes:

a.

The possession of goods is given to the buyer immediately.

b.

The ownership in the goods remains with the vendor till the last installment is paid.

c.

The seller can repossess the goods in case of default in payment .

d.

All of these

28

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4th Module Assessment

Venture Capitalists use staged financing:

a.

to limit other investor’s return

b.

to increase Venture Capitalist’s Ownership stake

c.

to reducuce Venture Capitalist’s Risk Exposure

d.

to increase probability the Portfolio Company succeeds

Question 2. A ____________ is a specialized firm that finances young, start-up companies.

a.

Venture Capital Firm

b.

Finance company

c.

Small-Business finance company

d.

capital-creation company

Question 3. The P/E firm takes the help of _______ for valuation & legal advice.

a.

Agents

b.

Brokers

c.

Advisors

d.

RBI

Question 4. _____________ act as an intermediary to link up the sources of ideas and the sources of fund.

a.

Venture Capital

b.

Merchant Banking

c.

Leasing

d.

None of these

Question 5. Financial services offered financing risk project to provide which of the Following?

a.

Seed Capital

b.

Venture Capital

c.

Primary Fund

d.

Secondary Fund

Question 6. The _____________ partner is also entitled to share in profits of the private equity funds investment .

a.

Legal

b.

General

c.

Limited

d.

Partnership

Question 7. _____________ nurturing means the continuous &ongoing investment of the VCF through representation in the board of the venture.

a.

Hands on

b.

Hands off

c.

Hands holding

d.

All of these

Question 8. Private Equity is regulated by ______.

a.

IRDA

b.

LIC

c.

UTI

d.

SEBI

Question 9. _____________ types of valuation method can be adopted by VCFs.

a.

1

b.

2

c.

3

d.

4

Question 10. Venture capital organized in _____________.

a.

1995

b.

1954

c.

1952

d.

1950

VCFs can be structured as an investment trust under the Indian act _____________.

Select one:

a.

1883

b.

1882

c.

1884

d.

1885

Question 11. The purpose of valuation is to assess the ____________ and viability of the venture & to divide of the percentage of the VCF ownership in the new venture.

Select one:

a.

Feasibility

b.

Profitability

c.

Availability

d.

None of these

Question 12. Which of the following is not the non-fund based activities?

a.

Securitization

b.

Merchant banking

c.

Loan syndication

d.

Venture capital

Question 13. ____________ is an interest free loan provided by VCFs without any predetermined repayment schedule.

a.

Conventional loan

b.

Income notes

c.

Conditional loan

d.

None of these.

Question 14. The venture capital process involves post investment Services is also called ____________.

a.

Investment nurturing

b.

Turn around financing

c.

Seed money

d.

All of these

In the ____________ method the entire earnings stream of the venture investment is considered.

 a. Conventional Valuation Method 

b. First Chicago Method 

c. Revenue Multiplier Method 

d. None of these.

The venture capital process involves post investment Services is also called ____________.

Select one:

a.

Investment nurturing

b.

Turn around financing

c.

Seed money

d.

All of these

Question 15. ____________ is used to estimate the value of venture capital investment.

a.

Dual structuring

b.

Revenue multiplier

c.

First Chicago method

d.

None of these

Question 16. Private equity is a ______ investment fund, as its Current market price cannot be easily determined and cannot be transferred for certain period of time.

a.

Close ended

b.

Open ended

c.

Fund

d.

Active

Question 17. In ____________ method the starting time & exit time of the venture investment is only considered.

Select one:

a.

First Chicago method

b.

Revenue multiplier method

c.

Conventional valuation method

d.

All of these

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5th Module Assessment

AI is intelligence demonstrated by ________. Select one: 

a. Humans 

b. Machines

 c. Both of above 

d. None of these

KYC means____________.

Select one:

a.

Know Your Customer

b.

Know Your Character

c.

Know Your Card

d.

Know Your Creditor

Question 2. What is a blockchain?

a.

A client-server database existing on a limited number of nodes at the same time.

b.

A centralized database that holds a subset of all transactions on all nodes.

c.

A distributed database with a record of all transactions on the network.

d.

A standalone database with history of all transactions on various nodes.

Question 3. ________refers to non alteration of data.

a.

Confidentiality

b.

Integrity

c.

Privilege

d.

None of these

Question 4. In Electronic cash payment____________.

a.

a debit card payment system is used

b.

a credit card payment system is used

c.

a customer buys several electronic coins which are digitally signed

d.

RSA cryptography is used in the transactions

Question 5. For providing transparency in accounting and reporting procedures of banks, _____________ are introduced in 1992

a.

IRAC rules

b.

BASEL norms

c.

Capital Adequacy Norms

d.

None of these

Question 6. Indian Bank Association(IBA) is __________technology

a.

Infrastructure

b.

Insurance

c.

Banking

d.

Centralise

Question 7. Paperless banking is known as_________.

a.

RTGS

b.

Internet Banking

c.

EFT

d.

Mobile Banking

Question 8. _______is one of the problem with e- banking.

a.

Limited services

b.

Security

c.

Too many steps

d.

Convenience

Question 9. DBMS stands for ___________.

a.

Database Master System

b.

Database Management Structure

c.

Delivery Management System

d.

Database Management System

Question 10. EFT stands for:

a.

Electronic Fund Transmission

b.

Electronic Fund Transfer

c.

Electronic Feature Transfer

d.

None of these

Identify the Risk factors which are associated with Electronic payment system. Select one: 

a. Fraudulent use of Credit Cards 

b. Sending Credit Card details over internet 

c. Remote storage of Credit Card details 

d. All of these

Question 11. What is E-Payment?

a.

Electronic payment for buying and selling through the Internet

b.

Payment of Online Software

c.

Payment of Online Services

d.

None of these

Question 12. ______ allows a user to execute financial transaction via the internet.

a.

Location Banking

b.

Mobile Banking

c.

Home Banking

d.

Online banking

Question 13. ____________ banking refers to the use of technology and communication systems in delivering banking products and services to customers.

a.

Hi-tech banking

b.

Virtual banking

c.

PC

d.

Home banking.

Question 14. The characteristics of the computer system capable of thinking, reasoning and learning is known as_________.

a.

machine intelligence

b.

human intelligence

c.

artificial intelligence

d.

virtual intelligence

Question 15. _______________allows to process the data which is stored in data warehouse.

a.

Information Processing

b.

Analytical Processing

c.

Data Mart

d.

Data Mining

Question 16. USP for Oracle Financial services software__________.

a.

Seamless multichannel banking

b.

Business agilitydesigned for modern

c.

User Friendly, intuitive interface

d.

Increased Flexibility and interoperability

Question 17. __________ is not a part of E-Banking components.

a.

Strategic objectives for ebanking

b.

Investment/ Brokerage services

c.

Security and internal control requirements

d.

Scope, scale and complexity of equipment, systems and activities

27

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Assignment 2

Case Study


XYZ Mutual Fund has been constituted as a trust on December 27, 2019 in accordance with the provisions of the Indian Trusts Act, 1882. The Deed of Trust has been registered under the Indian Registration Act, 1908. The Mutual Fund was registered with SEBI on January 18, 2020. They attribute their success thus far to their 3 founding principles: Outside-in view — Communicate with customers in their language to assist them in taking the right investment decision. Long-term wealth creation — Encourage investors to create a long-term investment strategy and play a critical role in their wealth management. Long-term relationship — Build relationships beyond finances XYZ Mutual Fund is a professionally managed investment fund that pools money from many investors to purchase securities. Within a short span of time it becomes very popular amongst various investors. It provides comprehensive suite of savings and investment products across asset classes, which provide income and wealth creation opportunities to large retail and institutional customer. 

The single most important factor that drives XYZ Mutual Fund is its belief to give the investors the chance to profitably invest in the financial market, without constantly worrying about the market swings. To realize this belief, XYZ Mutual Fund has set up the infrastructure required to conduct all the fundamental research and back it up with effective analysis. Their strong emphasis on managing and controlling portfolio risk avoids chasing the latest “fads” and trends. ABC Ltd. has entrusted a sum of Rs. 10 Lakh as the initial contribution towards the corpus of the Mutual Fund. PQR limited looks after the operation and investment of Mutual Fund. PQR limited may undertake any other business activities including activities in the nature of management and advisory services to offshore funds, financial consultancy and exchange of research on commercial basis etc., subject to receipt of necessary regulatory approvals. In accordance with SEBI (Mutual Funds) Regulations, 1996, activities of PQR Ltd. are reviewed by CID Ltd. The Board of Directors of the PQR Ltd. and CID Ltd. comprises eminent personalities with varied experience. It has launched its new scheme recently. This scheme mainly invest (appx. 85%) its funds in equity & equity related instruments of top 100 company in terms of full market capitalization. This scheme has 1,05,00,000 outstanding units. NAV published on February 18, 2020 is Rs. 15 per unit. On February 19, 2020, XYZ mutual fund has sold investments worth costing Rs. 2,50,00,000 at Z 2,75,00,000. On the same day, XYZ Mutual Fund purchased investments worth Rs. 1,50,00,000 whose market value at the end of day is Rs. 1,51,15,000. Market value of investment sold was Rs. 2,74,50,000 on February 18, 2020. Current Assets and Current Liability on February 18, 2020 was Rs. 85,00,000 and Rs. 10,00,000 respectively. Market Value of other investment as on February 19,2020 is increased by 1% as compared to February 18, 2020.

Que: Which is not the type of Mutual Fund on the basis of “Structure”?

a.

Equity Schemes

b.

Debt Schemes

c.

Open Ended Fund

d.

Both A & B

Question 2. What is Minimum Networth requirement of AMC as per SEBI (Mutual Funds) Regulations, 1996?

a.

Rs. 50 Million

b.

Rs. 50 Billion

c.

Rs. 50 Lakhs

d.

Rs. 50 Crores

Question 3. Which Ratio measures excess return generated per unit of risk in the portfolio?

a.

Sharpe Ratio

b.

Treynor Ratio

c.

Jensen’s Alpha

d.

Sortino Ratio

Question 4. CAMEL stands for:

a.

Capital, Assets, Management, Earning & Liquidity

b.

Cost, Assets, Managers, Earning and Liquidity

c.

Cost, Assurance, Managers, Earning & Liquidity

d.

Cost, Assets, Management, Earning and Liquidity

Question 5. Liquid Fund invests in debt and money market securities with maturity:

a.

Upto 1 day

b.

Upto 10 days

c.

Upto 91 days

d.

Upto 100 days

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