Management Quiz 2 December

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Management Quiz (on financial markets and

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Management QuizDr. T.K. Jain.

AFTERSCHO☺OLCentre for social entrepreneurship

Bikaner M: [email protected]

www.afterschool.tk, www.afterschoool.tk

http://www.afterschool.tk/

http://www.afterschoool.tk/


What is bailout

• To save a company is called bailout .


Who is this ?

• Honk kong based singer Kelly Chen.


What is LPO

• Legal Process Outsourcing


How many supercomputer does India has among world’s top 500

super computers? • 8


Which company is buying Australian Airlines?

• Luftansa from Germany


What is bleak economy?

• Economy in recession.


Fastest supercomputer

• Tesla supercomputers from NVIDIA


NEW CM OF MAHARASTRA?

• Ashok Chavan


Who is India president of Rolls Royce?

• Anil Shrikhande


Best movie as per American National Review of Movies?

• Slumdog Millionaires.


Who is this ?

• Executive Vice president of Nokia – Robert Anderson


Who is this ?

• Ranjan Das – CEO of SAP India

http://economictimes.indiatimes.com/Interview/Ranjan_Das_CEO_SAP_India/articleshow/3786137.cms


What is bullish and bearish?

• Bullish = when the prices are moving up, it is called bullish

• Bearish: when the prices are falling down, it is called bearish.


Who is O J Simpson?

• American footballer, recently put to jail for 15 years.


Name the act under which Banks can takeover a company which is

not making payment

• Sarfaesi Act.


What is NPA?

• Non- performing Asset ( when a company is not making payment for 2 instalments then it is called NPA and legal action is taken or the case may be taken to BIFR (BOARD OF INDUSTRIAL AND FINANCIAL RECONSTRUCTION).


Define takeover?

• When a company takes over shares of another company , it is called takeover.

• As per SEBI (securities and Exchange board of India), when a company goes for takeover, it has to buy at least 20% shares by public call. The threshold limit is 10% (once you cross 10% limit, you may go for takeover).


What is NB FC?

• Non-banking finance company .• Example : (fullerton, India bulls, Anagram)

…


What is ECB & FCCB?

• ECB = External commercial borrowing• FCCB= foreign currency convertible bond


What is GDR?

• Global Depository receipt.


What is AMC?

• IT IS A COMPANY SET UP AS PER SEBI REGULATIONS AND OTHER GUIDELINES TO MANAGE THE ASSETS OF A MUTUAL FUND. AMC HAS TO BE APPROVED BY SEBI. IT MAKES AGREEMENT WITH TRUSTEES OF A MUTUAL FUND TO FORMULATE SCHEMES, RAISE MONEY AGAINST THEM AND TO INVEST THE FUNDS AND DISTRIBUTE INCOME.


WHAT IS BACK END LOAD?

• It denotes the charges levied by the mutual funds to calculate the price of a scrip of a mutual fund.

• For example, if back end load is 2% and NAV is Rs. 20 then the share price will be :

• 20 / (1.02) = 19.60 ans.


WHAT IS CDSC?

• Contingent Deferred Sales Charges• This is the charge that mutual funds can

charge as a part of BACK END LOAD. • As per SEBI guidelines, maximum back

end load or front end load can be 7%.


What are highest symbols of ICRA for debt, insurance and equity

grades?

• For debt : mfAAA and also M1• For insurance companies : iAAA• For equity: ER1A.


What are the highest rating symbols of CARE for long term and

short term debt?

• For long term : CARE AAA• For short term instruments : PR1


WHAT ARE THE HIGHTEST RATING SYMBOLS OF FITCH

INDIA FOR LONG TERM, SHORT TERM AND TERM DEPOSITS?

• LONG TERM: AAA (IND)• FOR SHORT TERM : F1• FOR TERM DEPOSITS : tAAA


What is CP?

• Commercial paper


What is ICD?

• Inter-corporate deposits.


What is CD?

• Certificate of deposits.


What is the minimum networth required of a CRA?

• CRA = CREDIT RATING AGENCY• As per SEBI (credit rating agencies)

regulations 1999, it should be minimum Rs. 5 Crores ( the promotors should have minimum networth of Rs. 100 crores).


What is a BENAMI transaction?

• All the transactions where the source of the transaction cannot be identified because there is no real name (fictitious names are there).

• It is banned by Benami Trasaction (prohibition) Act 1988.


When was depositories Act enacted?

• 1996


WHAT IS NSCCL?

• National Securities Clearing Corporation Ltd.


What is WDM?

• Wholesale Debt Market.


Mention any 3 points that you will consider while deciding about

pricing of a buy back of the shares?

• Past performance• Prices• Book value per share• Industry outlook• Networth of the company• Previous buy back.


When is buy back not permitted?

• When shares are not fully paid up. • When there is inadequate reserve. • When the company has defaulted in

payment of deposits (as per companies (acceptance of deposits ) reules 1975).


Can the company keep the shares with itself after buy back?

• No • Because the shares have to be physically

destroyed in 7 days of the buy back.


When should company inform SEBI about completion of buy back • Within 30 days of buy back. (file a return

with SEBI).


You want to takeover a company ,what steps will you

follow? 1. Study the financial condition of the

company to be taken over. 2. Appoint a merchant banker3. Give public offer (as per regulation 14). 4. Give a letter of offer to SEBI5. Despatch letter of offer to shareholders6. Open escrow account


What are the purpose for which you may get GDR / EURO ISSUE

• CAPITAL EXPENDITURE (setting up a new plant etc.)

• Repayment of external borrowing• Equity investments in joint ventures

(remember, investments in stock market and real estate sector cannot be permitted out of it).


What is STP relating to SEBI?

• STRAIGHT TRHOUGH PROCESSING – it enables end to end processing in the case of financial instruments.


Name any ERP?

• SAP R3


WHAT CRITERIA WILL YOU HAVE WHILE RATING A

COMPANY?

1. Industry risk2. Company’s market position3. Financial position of the company4. Financial leverage 5. Cash flow & funds flow6. Evaluation of management7. Operating efficiency.


What is ETF?

• Exchange traded funds.• They represent a basket of scrips which

are traded in a stock exchange. They are just like mutual funds. They represent a basket of scrips which are purchased / sold from stock markets.


What are the activities that a merchant banker may do?

• Managing public issues• Managing advisory services and

underwriting services• Private placement of shares• Stock broking• Dealerships regarding securities


Who cannot participate in ESOS?

• ESOS = employee stock option scheme• DIRECTORS AND PROMOTORS

CANNOT PARTICIPATE IN ESOS


What are 4Ps?

• Product• Price • Place• Promotion• In services industry, we take 3 more: • Physical evidence• People• Public relations.


What are 4 c?

• Cost• Convenience• Communication• Consumer’s needs.


What is margin trading?

• SEBI has put margin trading requirements. A client will have to deposit some amount as margin to the broker to meet the requirements as per the SEBI guidelines. Thus a client has to deposit some advance money at the time of transactions.


What is capital market

• The market where you may deal in money for a long period – where investors and borrowers deal in financial instruments, which have long maturity period or have long investment possibilities. Capital market instruments include shares, debentures, bonds, deep discount bonds, prefernece shares etc.


When did ETF start ?

• Exchange traded funds started in 1993. • (it was suggested by Leland Obrien, of

Rubernstein Associates)in 1980.


What are price bands?

• If the price of a scrip is 100, and if it goes upto certain limit (called price band), then trading will halt for half an hour.

• Currently price band is 8% +4% = 12%. • Now price bands are from 5% to 20%.

There is no price band in case of scrips in futures and options.


MCFS?

• Modified Carry Forward System


ALBM

• Automated Lending and Borrowing Mechanism.


Green Shoe Option…

• A tool to stabilise share price


What is sweat equity shares?

• The shares issued to employees (sec. 79 A ) of companies Act.

• These issues are issued only after at least 1 year of commencement of business.

• It should be passed by special resolution..


What is deep discount bond?

• Those bonds with are issued on very heavy discount. They are for long period. They don’t carry any interest. For example a bond of face value Rs. 100 issued for Rs. 25 for 50 years.


The first Indian company to issue DDB?

• IDBI issued it – at 2700 the DDB of Rs. 100000 for 25 years


What is networth?

• Equity + reserves


Mention any 3 points from the code of conduct of merchant banker?

1. Keep the interest of the investor protected

2. Ensure that investor is able to read prospectus and other documents before investing

3. Shall not give any advice regarding investment in any company.

4. Shall give best possible advice to clients5. Make adequate disclosures Etc.


Mention any 3 points that you will add in statutory public

announcement for buy back

1. Dates and details2. Inforation about company3. Details of escrow account4. Capital structure5. Time table6. Details of offer


Mention any 3 points of public offer being made for takeover of

the company• No. of shares to be acquired• Price • Dates• Detail of holding• Approval of banks et. • Other required information. ….


Mention 3 obligations of the directors regarding insider

trading….

1. Maintain confidentiality of all price sensitive information

2. Security of confidential files3. Conduct all security related dealings in

valid trading window4. Disclose information as per SEBI

requirements. ..etc.


Mention 3 money market instruments…

• Treasury bills• Intercorporate deposits• Bill discounting • Etc.


Mention 3 guidelines regarding 75% book building process….

• The book runner should maintain records • Details regarding who is the institutional

investor and who is the private investor should be maintained

• Separate accounts should be there for these

• The institutional investor will also forward its offers through book runner.


What is mandatory client code?

• In order to bring transparancy, every broker has been given a unique code.


What is DVP?

• DELIVERY VERSUS PAYMENT


What is minimum public offer?

• At least 10% of post issue capital subject to minimum of 20 lakhs shares of amount of 100 crores.


No delivery period…

• Earlier we used to have at least 7 days of no delivery period - now this has been abolished.



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Afterschoool conducts three year integrated PGPSE (after class 12th along with IAS / CA / CS) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM. This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society.


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Case Studies

• We want to write case studies on social entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs.


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• Share to learn more• Interact to develop yourself• Fear is your worst enemy• Make mistakes to learn • Study & discuss in a group• Criticism is the healthy route to mutual support

and help • Ask fundamental questions : why, when, how &

where?• Embrace change – and compete with yourself

only


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Management Quiz 2 December

Economy & Finance