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INSTITUTE OF MANAGEMENT STUDIES
DEVI AHILYA VISHWAVIDYALAYA, INDORE

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END SEMESTER EXAMINATION
DECEMBER – 2021
MBA (FULL TIME) SEMESTER - III
FINANCIAL MARKETS PRODUCTS & SERVICES
Time: 3 Hrs. Max Marks: 60
Note: Attempt any 5 questions. (Each question carries equal marks)
Link for uploading answer sheet: https://forms.gle/CBFftcR5kNBv14CH9
Format for naming file

Fin. Market, Product and Services F6_RollNumber_Firstname F6_7609_MANJU
Q.1. Singh family deposit its money in People’s Bank. The bank provides return to the Singhs in form
of interest. The Singh family transfers the money with them in the bank to get this interest. Mr. Sartaj
Singh, who is the head of the family is approached by a broker of share trading firm. He convinced
Mr.Singh to invest in share market. Mr. Sartaj Singh purchase some stock on the advice of the broker
from National Stock Exchange. Mr.Singh thinks that he will get more return from stock market,
although he thinks that risk is also present.
Questions:
1. Name the process in the above mentioned case which is performed by the broker and bank.
2. What a bank must do to get more savings from Mr.Singh.
3. What can the broker do to get more funds from Mr.Singh?
4. Discuss the role of bank and broker in this scenario.
Q.2 You are an Investment Analyst in a corporate firm. You need Rs.1 crore for 1 year. From
commercial bills and commercial papers, how much would you generate to fulfill your needs and why?
Write appropriate justifications and reasons for your answer.
Q.3 You are an investor and seeking return within one year. You have Rs.1 crore. Amongst the given
money market instruments, how will you divide Rs.1 crore so that you get a good return. Write
appropriate justifications and assumptions for risk return preferences. The money market instruments
are: T-bills, commercial papers, certificate of deposits, CBLO.
Q. 4. How do you decide whether to go for hire purchase or take lease or take loan from bank for
making and capital expenditure?
Q.5 What are the benefits of securitization for IDBI in below case? What are the risks involved for the
investors in below case.

It undertook India’s first innovative securitization deal in the power sector. L&T had to build a 90 MW
captive power plant for Indian Petrochemical Ltd. (IPCL) on Built Operate and Transfer basis (BOT).
To finance the project IDBI resorted to securitization. This securitization deal amounted to Rs.409
crore. In this asset based securitization of the newly completed power plant the cash flow of the power
plant is securitized. L&T floated a SPV India Infrastructure Developers Ltd. (IIDL). The project to set
up captive power plant has been transferred by L&T to IIDL; the latter will build the plant and then
lease it out to IPCL. IIDL has issued bonds to debenture holders carrying a coupon of 14.25 % (payable
on monthly basis) for maturity of 8 years and 10 months. The instrument has no call and put option.
The monthly payment started on January, 2000 and continue till December, 2007. The interest payment
for the initial ten months will be amortized. IIDL will pay in EMI principal and interest. This amount
will flow to an escrow account. The issue of debentures has been reportedly fully subscribed within
hours of opening on 12 March, 1999.
Q.6 You are an investment advisor at Smart Money Ltd. Suggest allocation of mutual funds for the
below case. How much would you allocate to each mutual fund from any lump sum the clients have?
Explain the reasons you made your choices.
Case- A middle aged couple in their mid-40 wants you to help them start an investment program. They
have just received an Rs.50, 00,000 inheritance from the wife’s parents. They have two children aged
15 and 12. They want to arrange a handsome amount for their kids’ education and for their retirement.
They each make a respectable salary and already own their own home. The husband once lost his
funds in the commodities futures market. But still the couple is very excited to take risk.
Here are the mutual funds at your choice:
• Closed ended scheme, open ended schemes, interval schemes
• Income funds, growth funds, balanced funds
• Domestic funds, offshore funds
• Equity funds- diversified, value, special, sectoral, derivative arbitrage, tax saving. Index, fund
of funds, quant funds.
• Debt Funds- money market funds, short term bond funds, long term bond funds, gilt funds,
floating rate funds, fixed maturity plans, capital protection schemes.
• PE Ratio funds
• Exchange traded funds
• Real estate mutual funds.

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INSTITUTE OF MANAGEMENT STUDIES

DEVI AHILYA VISHWAVIDYALAYA, INDORE

Time: 3 Hrs. Max Marks: 60

Note: Attempt any 5 questions. (Each question carries equal marks)

Link for uploading answer sheet: https://forms.gle/CBFftcR5kNBv14CH9

Format for naming file

although he thinks that risk is also present.

Write appropriate justifications and reasons for your answer.

are: T-bills, commercial papers, certificate of deposits, CBLO.

making and capital expenditure?

investors in below case.

hours of opening on 12 March, 1999.

Explain the reasons you made your choices.

Here are the mutual funds at your choice:

• Closed ended scheme, open ended schemes, interval schemes

• Income funds, growth funds, balanced funds

• Domestic funds, offshore funds

of funds, quant funds.

floating rate funds, fixed maturity plans, capital protection schemes.

• Exchange traded funds

• Real estate mutual funds.

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