ANNAMALAI UNIVERSITY MBA FIRST YEAR AND
SECOND YEAR ASSIGNMENT ANSWER SHEETS PROVIDED.
DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91
9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com
M.B.A. FINANCIAL MANAGEMENT
SECOND YEAR
Academic Year 2017 - 2018
ASSIGNMENT TOPICS
2.1 MANAGEMENT OF FINANCIAL SERVICES
1. Discuss the present state of the Insurance in India and outline causes for their
high growth.
2. Discuss elaborately the role and the progress of commercial banks in the
industrial financing of this country.
3. Explain the role of venture capital in the overall economy and how the venturecapital
industry actually works as a whole and also discuss some of the biggest
successes and failures of venture capital.
4. What do you understand by Credit Rating? Go to any financial institution , get
your credit rating and share your experience.
2.2 INTERNATIONAL FINANCE
1. The international financial environment has become very volatile.’ – Do you
agree? Discuss it by taking into account all relevant factors.
2. Do you know the foreign exchange rates fluctuate? How do these fluctuations
affect us? What can be done to minimize these fluctuations?
3. Discuss the international monetary system, why did the international monetary
system move from a fixed exchange rate system to floating exchange rate
system? What has been its impact?
4. The responsibilities of the foreign banks in the export finance area have today
increased tremendously as compared to earlier years of 20th Century comment.
2.3 DERIVATIVES MANAGEMENT
1. Cipla has a market price of Rs.890. The volatility on the share is 0.32; the riskfree
interest rate is 5 percent. What would be the price of the call with a strike
price of Rs.880, if the expiry date is 20 days ahead? Assume there has not been
any dividend announcement.
2. You are given three call options on a stock at exercise price (k) of Rs 40, Rs.45 and
Rs.50 with the expiration date in 3 month and the premium of Rs.4, Rs.2 and Rs.1
respectively. Show how the call options can be used to create a butterfly spread.
Construct a table with different market prices and show how profit changes with
stock price ranging from Rs 30 to Rs 60 for a butterfly spread.
3. You are a portfolio manager who has just been exposed to the possibilities of
stock index futures. Respond to the following situations.
(a) Assume that you have the resources to buy and hold the stocks in the
S&P 500. You are given the following data. (Assume that today is January 1)
i) Level of the S & P 500 index = 258.90
ii) June S&P 500 futures contract = 260.15
iii) Annualized Rate on T. Bill expiring June 26 (expiration date) = 6%
iv) Annualized Dividend yield on S&P 500 stocks = 3%
v) Assume that dividends are paid out continuously over the year. Is there
potential for arbitrage? How would you go about setting up the arbitrage?
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(b) Assume now that you are known for your stock selection skills. You have
10,000 shares of Texaco in your portfolio (now selling for 38) and are
extremely worried about the direction of the market until June. You would
like to protect yourself against market risk by using the December S&P 500
futures contract (which is at 260.15). If Texaco's beta is 0.8, how would you
go about creating this protection?
4. What are various types of derivative instruments traded at NSE? What are
various products available for trading in Futures and Options segment at NSE?
2.4 RISK MANAGEMENT AND INSURANCE
1. You are the newly appointed Risk Manager within an organisation and have
noted that there is no written risk management philosophy or statement in
place. Advise the Board of the advantages of adopting a risk document,
describing the elements that should be referenced within it.
2. You are the Internal Audit Manager within an organisation. At a recent Board
meeting, you were asked to prepare for an internal audit of the risk management
process.
(a) State the aim of an Internal Audit team as defined by the Institute of Internal
Auditors (IIA).
(b) Explain the role and assurances that the internal audit has to provide in
relation to risk management.
(c) Explain how the responsibilities of the internal audit function differ from
those of the risk management committee.
3. Discuss the need and growing importance of Liability insurance policies in India
quoting relevant examples with specific reference to Professional indemnity
liability policy in the backdrop of the recent corporate scams.
4. “Claims handling requires specialized skills.” Do you agree? What makes
insurance claims processing difficult and complicated and unpleasant especially
in general insurance. Refer to the relevant IRDA guidelines for speedy settlement
of claims.
2.5 INVESTMENT, SECURITY AND PORTFOLIO MANAGEMENT
1. Cite recent examples of political, social, or economic events (market risk) that
have excited (a) The stock market, and (b) Stocks in a specific industry, to surge
ahead or plummet sharply.
2. “Public issue of securities through prospectus is not only most popular but also
the best method of raising fresh capital.” – Critically evaluate.
3. ‘Stock market indices are the barometers of the stock market.’ – Discuss.
4. Technical analysts believe that one can use past price changes to predict future
price changes. How do you justify this belief?
2.6 STRATEGIC MANAGEMENT
1. If strategic planning is essentially a program, can it display the degree of
adaptiveness that 21st Century enterprises need? Would ‘strategic
improvisation’ be a plausible alternative? Explore the practical
consequences of strategic improvisation for enterprise management.
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2. Select an Automobile industry in India, and evaluate its competitive
business strategy using Porter’s five force model? What strategies can you
suggest to convert the unattractive forces in to attractive ones?
3. “Complementary mergers may result in each firm filling in the missing
pieces of their firm with pieces from other firm” – Examine the validity of the
statement in the Indian context with necessary examples.
4. ‘Formality is the enemy of creativity and innovation’. ‘Informality is the
enemy of disciplined and reliable performance’. Is it consequently impossible
for an enterprise to be both innovative and disciplined? Investigate how
these qualities can be combined.
2.7.1 E-COMMERCE
1. Describe the current e-commerce scenario in India and explain the future
prospect of e-commerce.
2. Explain the characteristics of large companies that involve B2G and B2C
transactions in their business, which require roboust, capable and scalable
electgronic commerce system.
3. Visit the following sites:
www.olx.com /www.labour.tn.gov.in/www.clicks.co.za/www.digitalplanet.co.za
a. For each site determine whether it is in the exposure stage, interaction stage,
e-commerce stage or e-business stage. Provide reasons for your answer.
b. Determine whether each site is B2C, C2C, C2B or B2B and why.
c. Critically discuss the process of setting up a free-standing website and
evaluate the potential of e-commerce for small business development in
India.
4. Consider the development of a portal for a Retailer shop. Discuss the various
technologies, tools and components involved in designing the same..
2.7.2 BUSINESS RESEARCH METHODS
1. Below is the gist of an article from Business Week. After reading it
(a) identify the broad problem area,
(b) define the problem, and
(c) explain how you would proceed further.
While Chrysler‘s minivans, pickups, and sport utility vehicles take a big share of
the truck market, its cars trail behind those of GM, Ford, Honda, and Toyota.
Quality problems include, among other things, water leaks and defective parts.
2. It is advantageous to develop a directional hypothesis whenever we are sure of
the predicted direction. How will you justify this statement?
3. If a control group is a part of an experimental design, one need not worry about
controlling other exogenous variables. Discuss this statement
4. Whenever possible, it is advisable to use instruments that have already been
developed and repeatedly used in published studies, rather than develop our
own instruments for our studies. Do you agree? Discuss the reasons for your
answer.
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