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December, 2012

Ms-44 : Security Analysis And Portfolio Management

1.  Explain the concept of investment. Discuss in detail the steps involved in the investment process.

2.  (a)  Critically evaluate the role of SEBI as stock market developer and regulator.

(b)  The common stock of GVK Ltd. is currently selling for Rs. 70 per share. Dividend per share has grown from Rs. 2 to the current level of Rs. 6 over the past ten years and this dividend growth is expected to continue in future also. What is the required rate of return of the GVK Ltd. ?

3.  "Economic forecasting is the heart of economic analysis." Explain this statement and describe the various techniques of economic forecasting.

4.  Explain the Dow Theory. Is it useful in predicting the price behaviour of stocks ? Is the Dow Theory applicable to the Indian stock market ?

5.  (a)  What are benchmark portfolios ? How are they used to evaluate the performance of a portfolio manager ? Discuss with suitable examples.

(b)  Consider the following data for a particular sample period :

Calculate the following performance measures for portfolio P and the market : Sharpe, Jensen, and Treynor. The T - bill rate during the period was 6%. By which measures did portfolio P outperform the market ?

6.  Discuss the CAPM and its application in portfolio selection. Explain the relationship between SML, CML and Characteristic Line.

7.  Write short notes on any four of the following :

(a)  Risk -  return trade off

(b)  Duration and Immunization

(c)  Efficient Frontier

(d)  Elliot Wave Theory

(e)  Arbitrage Pricing Theory

(f)  Random Walk Hypothesis

8.  (a)  'Mutual funds provide stability to share prices, safety to investors and resources to the prospective entrepreneurs'. Critically evaluate this statement.

(b)  Distinguish between :

(i)  Sector Fund and Index Fund

(ii)  Systematic Investment Plan and Re-investment Plan. 

June, 2013

Ms-44 : Security Analysis And Portfolio Management

1. Define investment. Describe the steps involved in the investment process.

2. (a) How is the present value of a bond determined ? What effect does the use of semi annual discounting have on the value of a bond as compared to annual discounting ? How can an investor eliminate the re-investment rate risk inherent in bonds ?

(b) A bond of Rs. 1000 face value bearing a coupon rate of 12% will mature after 7 years. What is the value of the bond if the discount rates are 14% and 12% (PVIFA 14%, 7 years 2.88, PVIFA 12%, 7 years 4.564, PVIF 14%, 7 years .400, PVIF 12%, 7 years .452)

3. What do you understand by Earning Per Share ? Explain the various traditional and modern methods of forecasting EPS.

4. Define the various forms of the market efficiency. State the anomalies in the Efficient Market Hypothesis.

5. How is the expected return for one security and a portfolio determined ? What is the relationship between correlation coefficient and the covariance, both Qualitatively and Quantitatively.

6. Explain the Sharpe Index model. How does it differ from the Markowitz model ?

7. Describe the basic Arbitrage Pricing Theory Model of two factors. What are the advantages of APT over CAPM ?

8. Discuss briefly the concept of 'Mutual Fund'. Describe the role of Registrar, Custodians and the Fund managers in a mutual fund. 

December, 2009

MS-43 : Management Control Systems

1. Emphasize the importance of behavioural dimensions in Management Control Systems (MCS). For understanding the behavioural dimensions in relation to MCS which styles of management are crucial and under what conditions ? Explain.

2. What is the need for responsibility centres in an organisation ? Discuss the various types of Responsibility Centres.

3. Explain the Arm's length principle and discuss the comparable uncontrolled price (CUP) method giving a suitable example.

4(a) Discuss the important issues that need to  be examined and sorted out before developing the detailed budgets.

(b) What do you mean by a Balanced Score Card ? Discuss its advantages and the process of creating it.

5. What do you understand by Profit Centre ? Discuss the different issues that need to be looked into if Bank branches are to be treated as Profit Centres.

6. What do you mean by Business Process  Reengineering (BPR) ? Discuss the seven principles proposed by Hammer for reengineering and integration. What changes occur within an organization by the application of BPR ?

7. Explain the following statements :

(a) 'Five metaphors of control help not only in understanding the control process in organisations but also in designing the control systems'.

(b) 'Budgetary control system or any MCS cannot be operated unless the human factor in Management is given adequate consideration'.

(c) 'In performance appraisal the management should distinguish between performance of the manager and performance of the unit as an economic activity'.

(d) 'MIS is essentially a managerial tool for decision making, performance review and performance measurement'.

8. Write short notes on any four of the following :

(a) Cybernetic Paradigm

(b) Marketing Intangibles

(c) Economic value added

(d) Benchmarking

(e) Master Budget

(f) Knowledge organisations

June, 2010

MS-43 : Management Control Systems

1. Discuss the different forms of organizational structures and how are organization structures and control systems linked together ?

2. What do you mean by transfer pricing ? Discuss the methods and criteria of transfer pricing. What are the different types of inter-company transactions ?

3. What are the important steps involved in a budgetary control system ? Discuss the important considerations involved in capital budgeting.

4. What are the general characteristics of the financial service sector ? Discuss about the risks faced by banks in general and the regulatory framework to contain and minimise these risks.

5. Why are behavioural dimensions important in Management Control Systems ? Which styles of management and under what conditions are they critical in understanding such dimensions in relation to Management Control System ?

6. Explain the meaning, components and major features of Enterprise Resource Planning (ERP). What benefits might accrue to any business enterprise by implementing an ERP package ?

7. Describe the special characteristics of Non-Profit Organisations ? In what way does the management control system for Non-Profit Organisations differ from that of Profit-Organisations ?

8. Write short notes on any four of the following :

(a) Responsibility Accounting

(b) Cybernetic Paradigm

(c) Zero-base budgeting

(d) Product pricing

(e) Benefits of performance linked reward

(f) Characteristics of profit centre

June, 2011

Ms-43 : Management Control Systems

1.  Explain the nature and purpose of Management Control Systems and discuss the considerations involved in designing Management Control System in- an organisation.

2.  Explain the concept of 'strategy' and discuss the various models used for formulating Business Unit Strategies.

3.  What is a 'cost centre' ? Explain and distinguish between engineered cost centre and discretionary cost centres and discuss the implication that they create for management control system.

4.  What are 'investment centres' ? Discuss the various approaches used for measuring the performance of investment centres.

5.  Explain the Arm's Length Principle and discuss the Transactional Profit Methods used for transfer pricing.

6.  Explain Performance Measurement. Discuss the various metrics used for performance management.

7.  Discuss the general and risk characteristics of banks. How can the risk in banks be controlled by the application of Management Control Systems ? Explain.

8.  What are the characteristics of a project organisation ? Explain how these features affect the control system design of a project. 

December, 2011

MS-43 : Management Control Systems

1. Briefly explain the nature and purpose of management control systems and discuss the various critical components of management control systems.

2. Explain the concept of 'Radical Performance Improvement' (RPI) and discuss the application of this frame work in the formulation of corporate strategy.

3. Explain the concept of Responsibility Accounting. Discuss the application of this concept in creating and designing various responsibility centres.

4.  What is an investment base ? Explain the various asset valuation alternatives used for the purpose of calculating investment base.

5.  What do you understand by Transfer Pricing? Explain the Various categories of Inter Company Transfers in the context of transfer pricing.

6.  Explain the following :

(a) Value added analysis

(b) Activity based costing

7.  Explain the distinguishing features of cash flows of insurance companies.  What are the implications of these characteristics on Management Control Systems of insurance  companies ? Discuss.

8.  What are 'development organisations'? Explain the main elements of Management Control Systems for development organisations. 

December, 2012

Ms-43 : Management Control Systems

1. What are Business Unit Strategies? Explain the application of BCG Model and General Electric (GE) planning model in the formulation of business unit strategies.

2. Explain the concept of responsibility Accounting and describe its benefits? Briefly explain various types of responsibility centres.

3. What do you understand by Transfer Pricing? Discuss the various categories of inter-company transfer transactions.

4. What is 'investment centre'? Explain the concept of 'Return on Investment' (ROI) in the context of performance measurement of an investment centre.

5. Elaborate on the constituent parts of the performance measurement system and discuss the requirement for a performance measurement system.

6. Explain the characteristics of incentive compensation plans and discuss the various short term incentive plans.

7. Explain the general characteristics of banks and discuss how can management control systems contain risks faced by banks?

8. What are Developmental organisations? Discuss the main elements of control systems for these organisations. 

June, 2013

MS-43 : Management Control Systems

1. Define the concept of strategy. Explain the Boston Consulting Group (BCG) model, General Electric (GE) planning model and highlight their usefulness in formulating business unit level strategies.

2. Explain the following:

(a) Just In Time (JIT) and Management Control System

(b) Benchmarking and Management Control System

3. What is a 'Responsibility Centre'? Why are they established? Explain the different types of Responsibility Centres.

4. What is Arm's Length Principle ? Explain the traditional transaction methods used for determination of transfer price.

5. What do you understand by Performance Measurement ? Explain in detail the G.E. performance measurement frame-work.

6. What are the objectives of Reward and Compensation plan. Discuss the various types of long term incentive plans.

7. Explain the following :

(a) Business Process Re-engineering (BPR)

(b) Enterprise Resource Planning

8. Discuss the special characteristics of Non Profit Organisations and explain the focus areas of Management Control Systems for such Organisations. 

December, 2012

MS-42 : CAPITAL INVESTMENT AND FINANCING DECISIONS

 1. The existing capital structure of ABC Ltd. is as follows :

Company earns a return of 12% and the tax rate on its income is 50%. Company wants to raise Rs. 25,00,000 for its expansion project for which it is considering following alternatives :

(a) Issue of 20,000 equity shares at a premium of Rs. 25 per share

(b) Issue of 10% preference shares and

(c) Issue of 9% debentures.

 It is Projected that the company's P/E ratios in the case of equity, preference and debentures financing are 20,17 and 16 respectively. Which alternative would you consider to be the best. Give reasons for your choice.

 2. A company is considering raising of additional funds of Rs. 100 lakhs by one of the two alternative, methods, viz. 14% institutional term loan and 13% non convertible debentures. The term loan option would attract no major incidental cost. The debentures would have to be issued at a discount of 2.5% and would involve floatation cost of Rs. 1 lakh. Advise the company as to the better option based on the effective cost of capital in each case. Assume a tax rate of 50%.

 3. What do you understand by Economic Appraisal of a project ? Discuss the various aspects of economic appraisal and explain their significance.

 4. What is Certainty Equivalent ? Explain the relationship between certainty equivalent and risk adjusted discount rate.

 5. List the various instruments through which corporates can procure finance and discuss the circumstances under which they are used to procure finance.

 6. Write short notes on the following :

(a) Asset securitisation

(b) Venture Capital

(c) Sensitivity analysis

(d) Internal rate return method of capital budgeting

 7. What are the different payout methods of dividends ? Explain the Modigliani-Miller hypothesis regarding dividend policy.

 8. What is Financial Engineering ? Explain the factors which motivate the finance managers to undertake financial engineering.

June, 2013

MS-42 : CAPITAL INVESTMENT AND FINANCING DECISIONS

1. What do you understand by Financial Reconstruction ? How does it differ from reorganisation of Capital ? Discuss the steps involved in the formulation of Reconstruction Plan for a company.

 2. What do you understand by Securitisation of Assets ? Discuss the procedure involved in Securitisation and point out its advantages to the parties concerned.

 3. Distinguish between :

(a) Global Depository Receipts and Euro -Bonds.

(b) Commercial Paper and Convertible Debentures

(c) Collateral Security and Contract of Guarantee

(d) Factoring and Discounting of Bills.

4. (a) What do you understand by Earned Value Chart ? For what purpose is it used ? Explain with a diagram.

(b) Discuss the three main types of control systems used in controlling a project.

 5. What do you understand by Venture Capital ? What are its special features ? Discuss the stages at which a Venture Capitalist provides finance to a project. In what form is Venture Capital provided ?

 6. Write notes on :

(a) Accounting Rate of Return and Internal rate of Return

(b) Leveraged Buyout

(c) Corporate Governance

(d) Supplier's Credit

7. S. Co. Ltd, has the following capital structure on 31^st March 2012 :

The share of the Co. sells for Rs. 20/- . It is expected that the Co. will pay next year a

dividend of Rs. 2 per share, which will grow at 7% forever. Assume a 50% tax rate.

You are required to :

(a) Compute weighted average cost of Capital based on existing capital structure.

(b) Compute new weighted average cost of capital if the Co. raises an additional Rs. 20 lakh debt by issuing 15% debentures. This would result in increasing the expected dividend to Rs. 3 and leave the growth rate unchanged, but the price of the shares will fall to Rs. 15 per share.

(c) Compute the cost of capital if in (b) above the growth rate increases to 10%

8. M.C. Ltd. requires Rs. 25,00,000 for a new plant. This plant is expected to yield earnings before interest and taxes of Rs. 5,00,000. While deciding about the financial plan, the company considers the objective of maximising earnings per share. It has three alternatives to finance the project - by raising debt of Rs. 2, 50, 000 or Rs. 10, 00, 000 or

Rs. 15, 00, 000 and the balance, in each case, by raising equity shares. The company's share is currently selling at Rs. 150, but is expected to decline to Rs. 125 in case the funds are borrowed in excess of Rs. 10,00,000. Funds can be borrowed at the rate of 10% upto Rs. 2,50,000, at 15% over Rs. 2,50,000 and upto Rs. 10,00,000 at 20% over 10,00,000. The tax rate applicable to the company is 50%. Which form of financing should the company choose ?