FIN403 – Merchant Banking and financial Services

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ASSIGNMENT

DRIVE	FALL 2018
PROGRAM	MBA
SEMESTER	IV
SUBJECT CODE & NAME	FIN403 – Merchant Banking and financial Services
BK ID	B1815
CREDITS	2, 4
MARKS	30

Note – The Assignment is divided into 2 sets. You have to answer all questions in both sets. Average score of both assignments scored by you will be considered as your IA score. Kindly note that answers for 10 marks questions should be approximately of 400 words.

SET I

Question.1. Write short notes on Traditional theory of Portfolio Management and Modern theory of Portfolio Management.

Answer:Traditional portfolio analysis has been of a very subjective nature but it has provided success to some persons who have made their investments by making analysis of individual securities through evaluation of return and risk conditions in each security.

In fact, the investor has been able to get the maximum return at the minimum risk or achieve his return position at that indifferent curve which states his risk condition. The normal method of calculating the return on an individual security

Question.2. Write short notes on Foreign Direct Investment (FDI) and Depository Receipt.

Answer:Foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets, including establishing ownership or controlling interest in a foreign company. Foreign direct investments are distinguished from portfolio investments in which an investor merely purchases equities of foreign-based companies.

Question.3. What do you mean by a Depository? What are the functions performed by a Depository?

Answer:A depository is a facility such as a building, office, or warehouse in which something is deposited for storage or safeguarding. It can refer to an organization, bank, or institution that holds securities and assists in the trading of securities. The term can also refer to a depository institution that accepts currency deposits from customers.

A depository institution provides financial services

SET II

Question. 1. Explain the concept of Hire Purchase? Give the difference between Hire Purchase and Leasing.

Answer:Both Hire-Purchase and Lease are the commercial arrangement, whereby the asset does not require the customer to own the asset for using it, but they are not one and the same.

Comparison Chart

Basis for Comparison	Hire Purchasing	Leasing
Meaning	The deal in which one party can use the asset of the other party for the payment of equal monthly installments is known as Hire Purchasing.	Leasing is an agreement where one party buys the asset and allows the other party to use it by paying consideration over a specified period is known as Leasing.

Question.2. Explain Application Supported by Blocked Amount (ASBA). What is the Procedure of Applying in IPO through ASBA?

Answer:ASBA (Applications Supported by Blocked Amount) is a process developed by the India's Stock Market Regulator SEBI for applying to IPO. In ASBA, an IPO applicant's account doesn't get debited until shares are allotted to them.

Earlier Qualified Institutional Buyers were not allowed to participate in IPOs through ASBA facility.[1] Currently as per SEBI guidelines, all three categories

Question.3. What do you mean by Venture Capital Fund? What are the various features of a Venture Capital Fund?

Answer:The term ‘venture capital’ represents financial investment in a highly risky project with the objective of earning a high rate of return. While the concept of venture capital is very old, the recent liberalisation policy of the government appears to have given a filip to the venture capital movement in India. In the real sense, venture capital financing is one of the most recent entrants in the Indian capital market.

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