I Semester M.B.A.

Examination, June/July-2008
Management

Course-01: MANAGEMENT THEORY AND PRACTICE

Time:3 Hours

Max. Marks: 75

1. Answer all the sub-questions. Each sub-question carries two marks.

SECTION - A

(5X2=10) a) What is MBO? b) Define the word planning. c) What do you mean by functional organization? d) What is meant by graprevine? e) What are business ethics? SECTION B

Answer any two questions. Each question carries 10 marks.

(2X10=20)

2. Briefly explain the contribution of F.W.Taylor to the world of management. 3. Define forecasting. Explain different forecasting techniques. 4. What do you understand by organizing? What are the important principles of a sound organizing? 5. What are the common barriers to communication in an organization? How can these be overcome?

SECTION - C

Answer any three questions. Each question carries 15 marks.

(3X15=45)

6. Critically examine the social responsibilities of business organizations in a contemporary environment. 7. What is decision making? Contrast programmed and non-programmed decisions and give examples of each. 8. Why was the trait approach a logical attempt to understand leadership? What did trait studies reveal about leadership? 9. Define the word motivation. Explain any of the motivation theories. 10. Why control is needed? Discuss the steps in the control process. 11. What is information and why is it important to effective managerial planning, decision making and control?

------------------------------------------

I Semester M.B.A. Examination, June/July-2008

Management

Course-02: Managerial Economics

Time:3 Hours

Max. Marks: 75

1. Answer all the sub-questions. Each sub-question carries two marks.

SECTION - A

(5X2=10) a) State the factors influencing managerial decisions. b) State the law of demand. c) What do you mean by perfect competition? d) What is demand forecasting? e) What is equilibrium of firm and industry? SECTION B

Answer any two questions. Each question carries 10 marks. 2. Explain how market demand is derived from individual demand. 3. Describe the concept of cross elasticity of demand. 4. What are the criteria for good forecasting method? 5. Describe the different types of market structures.

(2X10=20)

SECTION - C

Answer any three questions. Each question carries 15 marks. 6. Is managerial economics a positive or normative science? Discuss. 7. Discuss the significance of demand analysis to a manager.

(3X15=45)

8. Explain the Trend projection method and collective opinion method of demand forecasting. 9. Describe various factors affecting pricing of multiple products and spares. 10. Explain the various profit theories. 11. Monopoly price need not necessarily be high. Examine this statement theoretically and indicate some cases in practice.

------------------------------------------

I Semester M.B.A. Examination, June/July-2008

Management

Course-04: ORGANISATIONAL BEHIVOUR

Time:3 Hours

Max. Marks: 75

1. Answer all the sub-questions. Each sub-question carries two marks.

SECTION - A

(5X2=10) a) What do you mean by human engineering? b) Distinguish between values and attitudes. c) What are the problems in group decision making? d) List out the indicators of high and low morale. e) What are different concepts of self? SECTION B

Answer any two questions. Each question carries 10 marks. 2. Define personality and explain the reasons for individual differences.

(2X10=20)

3. What are the reasons for group formation? Explain the qualities of highly productive groups. 4. Describe the forces that influence organizational behaviour. 5. Discuss the different techniques of handling distance to change at individual and organisational levels.

SECTION - C

Answer any three questions. Each question carries 15 marks. 6. Describe the process of organisational development.

(3X15=45)

7. Job satisfaction is an attitude of employees towards their job, it can be measured and altered- discuss. 8. Define conflict and explain its various types and their impact on organisations. 9. Define organisational culture and explain the properties of Indian organisations in comparison with that of MNCs. 10. Explain the various theories of learning. 11. What is group thinking? Explain its determinants and impact on group decision making.

------------------------------------------

I Semester M.B.A. Examination, June/July-2008

Management

Course-05: QUANTITATIVE TECHNIQUES

Time:3 Hours

Max. Marks: 75

Note: Simple Calculators are allowed.

SECTION - A

1. Answer all the sub-questions. Each sub-question carries two marks.

(5X2=10) a) State the objectives of classification of data. b) What do you mean by quota sampling? c) What is standard deviation? d) Define the term subset. e) What is analysis of variance? SECTION B

Answer any two questions. Each question carries 10 marks. 2. Describe the points you would consider in drafting a questionnaire. 3. Define probability. How is it useful in managerial decision- making?

(2X10=20)

4. In a class of 70 students, 30 students have taken Mathematics as optional paper. 20 have taken Mathematics but not Economics. Find the number of students who have taken Mathematics and Economics and those who have taken Economics but not Mathematics. 5. The managerial revenue function of a product is given by MR=500-0.01 x and the marginal cost function is given by MC=100 + 0.006x. The fixed cost is Rs. 1,50,000. Find the profit function.

SECTION - C

Answer any three questions. Each question carries 15 marks.

(3X15=45)

6. Explain the various methods of collecting primary data pointing out at their merits and demerits. 7. Obtain the line of regression of Y on X for the following data:

Age (Year)

X:

66 142

38 124

56 147

42 125

72 160

36 118

63 149

47 128

55 150

45 124

Blood Pressure Y:

Estimate the blood pressure of a man whose age is 50 years. 8. The mean life time of sample of 100 fluorescent light tubes produced by a company is computed to be 1570 hours with a standard deviation of 120 hours. The company claims that the average life of the tubes produced by the company is 1600 hours. Using the level of significance of 0.05 is the claim acceptable?

9. The customer accounts at a certain departmental store have an average balance of Rs. 1,200 and a standard deviation of Rs.400. Assuming that the account balance are normally distributed:

i)

Find the proportion of accounts whose balance is more than Rs.1,500.

ii) What proportion of the accounts is between Rs.1,000 and Rs.1,500? iii) What proportion of the accounts is more than Rs.1,000 by less than Rs.1,200? 10. Sampling is necessary under certain conditions. Do you agree? Why? What are the well known of this concept in business.

------------------------------------------

I Semester M.B.A. Examination, June/July-2008

Management

Course-05: BUSINESS ETHICS AND VALUES

Time:3 Hours

Max. Marks: 75

1. Answer all the sub-questions. Each sub-question carries two marks.

SECTION - A

(5X2=10) a) State two factors influencing business ethics. b) Give the meaning of business ethics. c) What is ethics hotlines? d) What is meant by ethics in HRM? e) What is intellectual property rights?

SECTION B

Answer any two questions. Each question carries 10 marks. 2. Discuss the theories of business ethics in brief. 3. Explain the legislation enforcing the ethical conduct. 4. How do you reduce the sexual harassment in work place? Discuss.

(2X10=20)

5. Explain how unethical practice could find a place in finance and accounting.

SECTION - C

Answer any three questions. Each question carries 15 marks. 6. Discuss the ethics practised in advertisement in the competitive area. 7. Explain ethics in HRM, which you could observe in BPOS and call centres. 8. Discuss the ethical principles governing global business.

(3X15=45)

9. Explain the ethics in production and operation management with reference to MNCs. 10. Give an account on ethics in the globalisation process. 11. Discuss the source of ethics.

------------------------------------------

II Semester M.B.A. Examination, June/July-2008

Management

Course-07: MANAGEMENT INFORMATION SYSTEM AND COMPUTER APPLICATIONS

Time:3 Hours

Max. Marks: 75

1. Answer all five sub-questions. Each sub-question carries two marks.

SECTION - A

(5X2=10) f) What are general purpose computers?

g) Distinguish between audit and review. h) Distinguish between code design and procedural design. i) j) What are the advantages of using a laptop over a desktop computer? Explain idea phase, design phase and choice phase.

SECTION B

Answer any two questions. Each question carries 10 marks. 2. With a neat diagram, explain the functioning of a digital computer.

(2X10=20)

3. Explain sequential file organisation. Compare with relative file organisation. 4. Distinguish between economic feasibility and technical feasibility with suitable example. 5. Who is a system analyst? Explain his role in information system analysis.

SECTION - C

Answer any three questions. Each question carries 15 marks.

(3X15=45)

6. What are decision tables? With an example, elaborate on decision making process. Bring out the importance of using decision tables as a vital tool in decision making. 7. Bring out the importance of input design, output design and database design in Information System Analysis. 8. Explain the MIS pyramid in detail. 9. With a neat diagram, explain data life cycle. 10. Explain the latest gadgets/peripherals in computers and its applications. 11. Discuss in details system software, application software, embedded systems and nano technology.

------------------------------------------

II Semester M.B.A. Examination, June/July-2008

Management

Course-08: BUSINESS LAW

Time:3 Hours

Max. Marks: 75

1. Answer all sub-questions. Each sub-question carries two marks.

SECTION - A

(5X2=10) a) Define contract of indemnity. b) Name the different kinds of partners. c) Who is a holder in due course? d) Define the term goods. e) Who is a consumer?

SECTION B

Answer any two questions. Each question carries 10 marks. 2. Define Partnership. Explain its essential features. 3. Explain the powers of directors. 4. Write a note on different consumer dispute redressal agencies. 5. Distinguish between a Bill of Exchange and Promissory Note.

(2X10=20)

SECTION - C

Answer any three questions. Each question carries 15 marks. 6. Define conditions. Explain the special features of implied conditions.

(3X15=45)

7. What is misrepresentation? Distinguish it from fraud. Explain them with illustrations. 8. How is WTO different from GATT? Explain the achievements of W.T.O. 9. Which are the presumption are made with reference to negotiable instruments? 10. Examine the different modes of dissolution of a partnership firm. 11. Define prospectus. Explain the contents of prospectus.

------------------------------------------

II Semester M.B.A. Examination, June/July-2008

Management

Course-10: MARKETING MANAGEMENT

Time:3 Hours

Max. Marks: 75

1. Answer all sub-questions. Each sub-question carries two marks.

SECTION - A

(5X2=10) a) What do you mean by customer orientation? b) What are rational motives? c) Define target market. d) What do you mean by sales territory? e) Distinguish between consumer and buyer.

SECTION B

Answer any two questions. Each question carries 10 marks. 2. Explain how consumer marketing differs from industrial marketing. 3. What is market segmentation? Explain the types of market segmentation. 4. Briefly discuss the dimensions of marketing communication strategy. 5. What is rural marketing? What problems are faced by rural marketers?

(2X10=20)

SECTION - C

Answer any three questions. Each question carries 15 marks.

(3X15=45)

6. Marketing concept converts human beings into consumption machines while societal concepts promotes humanism. Examine the statement. 7. A marketer comments. I would like to segment the Indian market for my companys new brand of readymade garments, but I do not how to do it. What advice would you give? Justify your stand. 8. Explain with examples the impact of psychological factors on consumer behaviour. 9. Discuss the major components of the packaging strategy of an FMGG firm. 10. What is product life cycle? What is the rationale behind it? What strategies are adopted at the maturity and decline stages of a product? 11. Suggest the trade channels for a consumer product and an industrial product of your choice. Is there a difference between them? Why?

------------------------------------------

II Semester M.B.A. Examination, June/July-2008

Management

Course-11: HUMAN ASSET MANAGEMENT

Time:3 Hours

Max. Marks: 75

1. Answer all Sections. Marks are indicated against Each Section.

SECTION - A

(5X2=10) a) What do you understand by human resource planning? b) What is job analysis? c) What do you mean by 360 degree appraisal? d) Define career plateau. e) What is education?

SECTION B

Answer any two questions. Each question carries 10 marks.

(2X10=20)

2. How will demographic changes and increasing cultural diversity affect the ways that organizations manage their people? 3. What steps can a company take to integrate its compensation system with its general business strategy? 4. Define job specification and job description. State their objectives and importance. 5. Would you be able to recognize a sound training programme if you saw one? What features would you look for?

SECTION - C

Answer any three questions. Each question carries 15 marks.

(3X15=45)

6. Outline an evaluation procedure for a training programme designed to teach sales principles and strategies. 7. Discuss the different controllable and uncontrollable costs associated with absenteeism for an IT company. Why should efforts to reduce turnover focus only on controllable costs? 8. Explain the nature and importance of human resource planning in an industrial undertaking. 9. Organization cannot prosper without sound recruitment and selection policies. Comment. State various sources of recruitment. 10. Explain the nature of Human Resource Development. Discuss the qualities of a HRD manager should posses. 11. Discuss in detail various causes of industrial disputes. How are disputes settled?

------------------------------------------

II Semester M.B.A. Examination, June/July-2008

Management

Course-12: EXECUTIVE COMMUNICATION AND RESEARCH

METHODOLOGY

Time:3 Hours

Max. Marks: 75

1. Answer all five sub-questions. Each sub-question carries two marks.

SECTION - A

(5X2=10) a) Define communication. f) What do you mean by informal communication?

g) List out various types of non-verbal communication. h) What is research design? i) What do you mean by scaling technique?

SECTION B

Answer any two questions. Each question carries 10 marks. 2. Discuss the fundamental principles of written communication in business. 3. Explain the role of technology in business communication. 4. Describe the criteria of good research in social sciences. 5. Distinguish clearly between probability and non-probability sampling.

(2X10=20)

SECTION - C

Answer any three questions. Each question carries 15 marks.

(3X15=45)

6. Explain the outlines of interpersonal communication and resolving conflicts in communication. 7. Discuss the various types of research methods. 8. Explain the steps involved in hypothesis testing. 9. Discuss how the sample size is determined and its advantages. 10. Explain various types of scaling used in research design. 11. Explain the advantages and disadvantages of oral and written report.

------------------------------------------

III Semster M.B.A. Examination, June/July-2008

Management

Course-13: Management of Entrepreneurship and Small Business

(Compulsory)
Time:3 Hours Max. Marks: 75

1. Answer any five of the follwing sub-questions. Each sub-question carries two marks.

SECTION - A

k) Who is an entrepreneur? l) What is network analysis?

(5X2=10)

m) Define Small Business. n) What do you mean by environmental analysis? o) What are the major sources of finance? p) What is an EDP? q) List any four incentives provided to SSIs in India. SECTION B

Answer any four questions. Each questions carries five marks. 2. What are the objectives of entrepreneurial development programmes? 3. Explain the competitive advantages of small scale enterprises. 4. How do small business estimate their financial requirements? 5. Explain the steps involved in environmental analysis.

(4X5=20)

6. Explain the inventory management practices followed in small enterprises. 7. Why should rural entrepreneurship be developed?

SECTION - D

13. Case Study (Compulsory): The total available budget for a Company is Rs. 20 Crores. The project listed below have been allotted and ranked in order of profitability. The firm has already accepted project X whose cost is assumed to be Rs. 13 Crores and it has the profitability index of 1.40.

Project A B C D E Total

Cost (Rs. In Crores) 6 5 7 2 5 25

Profitability Index 1.50 1.25 1.20 1.15 1.15

Which projects, including X should be acquired by the company?

III Semester M.B.A. Examination, June/July-2008

Management

Course-14: Business Policy and Strategic Mangement

(Compulsory)
Time:3 Hours Max. Marks: 75

1. Answer any five of the follwing sub-questions. Each sub-question carries two marks. (5X2=10) SECTION - A

a) Define the concept of Competitive Advantage. b) Name the different levels of strategies with examples. c) Define the terms: Vision, Mission and Goals. d) What do you mean by learning organisation? e) What is switching cost? Give example. f) What do you mean by core competency? Give examples.

g) What do you mean by Conglomerate Diversification? SECTION B

Answer any four questions. Each questions carries five marks. 2. Define strategic management. Explains its process. 3. Name the role of different individuals in the strategic management.

(4X5=20)

4. Describe the essential characteristics of a mission statement. Give any two ideal mission statements. 5. Differentiate clearly between the external and internal components of environment. 6. What is value chain? How value chain is useful for internal analysis? 7. Critically examine the Ratan Tatas move of acquiring Corus co.

SECTION - C Answer any three questions. Each question carries 10 marks. 8. Explain the social responsibilities of entrepreneurs. 9. How do financial institutions assist entrepreneurial development? 10. Describe the role of government in marketing the products of small enterprises.

P.T.O

13. Case Study (Compulsory):

Activity Time Estimates (Weeks) Direct Cost Estimates (Rs.in Thousands)

Normal 1-2 13 24 34 35 46 56 2 8 4 1 2 5 6

Crash 1 5 3 1 1 3 2

Normal 10 15 20 7 8 10 12

Crash 15 21 24 7 15 16 36

Required: i) Draw the project network corresponding to normal time.

ii) Determine the critical path, normal duration and normal cost of the project. iii) Crash the activities so that the project completion time reduces to 9 weeks with minimum additional cost.

-----------------------------------------

III Semester M.B.A. Examination, June/July-2008

Management

Course-15: OPERATION RESEARCH

(Compulsory)
Time:3 Hours Max. Marks: 75

1. Answer any five of the following sub-questions. Each sub-question carries two marks. (5X2=10) SECTION - A

a) Explain the terms objective and constraints in linear programming. b) Explain primal-dual relationship c) What is degeneracy in a transportation problem? d) What is an un-balanced assignment problem? e) What do you understand by Decision-Tree Analysis? f) With reference to Game-Theory, what are pure strategies and mixed strategies?

g) What is the significance of three time estimates used in PERT analysis? SECTION B

Answer any four questions. Each questions carries five marks. 2. What are the managerial applications of operations research? Explain. 3. Enumerate the principal assumptions made in a sequencing problem.

(4X5=20)

4. Given the pay off of player A solve the following game and find the value of the game to both players. Also determine the optimal strategies for the two players.

Player- B
B1 A1 A2 2 4 7 3 B2 4 5 6 1 B3 3 2 8 7 B4 8 6 7 4 B5 5 7 6 2

Player- A

A3 A4

P.T.O

5. Explain the important characteristics of a queuing system. 6. Describe the various types of replacement problems. 7. Explain the environment in which decisions are made under risk and uncertainty. SECTION-C Answer any three questions. Each question carries ten marks. 8. Given the supply, demand and unit cost of transportation, determine an optimal solution for the following minimal transportation problem. To
P A B 2 2 5 1 Q 7 3 4 6 R 4 1 7 2 Supply 5 8 7 14

From

C D

Demand

18

9. Solve the following assignment problem using Hungarian technique and determine the minimum assignment cost and optimal assignment of jobs to men. Men
E A B 18 13 38 19 F 26 28 19 26 G 17 14 18 24 H 11 26 15 10

Jobs

C D

10. A small project consists of the following activities whose time estimate (in weeks) are given in the following table:

Activity 12 13 14 25

Time (in weeks) 2 7 8 3

35 36 37 46 57 68 78

6 10 4 6 2 5 6

Draw the project network and identify the critical path. 11. A machine costs Rs.10,000/- Maintenance costs vary as given below:
Year Maintenance 1 500 2 800 3 1200 4 1500 5 2000 6 2500 7 3000

If money is worth 10% per year, what is the optimum replacement policy? The scrap value is negligible. 12. Use Johnsons Rule to determine an optimum sequence to the following sequencing problem:

Jobs Machine X Machine Y

1 20 25

2 90 60

3 80 75

4 30 20

5 15 35

6 60 50

Also, determine the total elapsed time and the idle time on the two machines. P.T.O SECTION-D 13. Case study (Compulsory): A farmer is not sure whether he should dig a tubewell in his field. He is presently using the canal water for irrigation of his fields for which he pays Rs.5,000/- per year. The history of tubewell digging in the village is not very encouraging; only 50 percent of the wells dug upto 200 feet yielded water. Some farmers drilled further upto 300 feet, but only 25% of them struck water at 300 feet. The cost of drilling is Rs.100/- per feet.

a) Should the farmer drill upto 200 feet? b) If no water is in store at 200 ft. Should he drill upto 300 feet?

c) Should he continue to buy water from Government for next 5 years, as the life of the tubewell is only 5 years. Activity the farmer suitably.

-----------------------------------------

III Semster M.B.A. Examination, June/July-2008

Management Elective A: Finance

Course-16A: Investment Management

Time:3 Hours Max. Marks: 75

Instructions: Attempt all Sections, Section D is Compulory. (5X2=10) SECTION A

1. Answer any five sub-questions. Each Questions carries 2 marks. a) What are the determinants of present value of money? b) What is meant by Internal Rate of Return (RR)? c) What is capital recovery factor? d) How do you determine the profitability index? e) How do you ascertain cash inflows after tax (CFAT) of the project? f) What do you mean by sensitivity anlysis?

g) What is NPV? SECTION B

Answer any four questions. Each question carries five marks. 2. Explain in brief the capital budgeting process. 3. How do you estimate the profits of the project? 4. What are the factors be considered for identifying the plant location?

(4X5=20)

5. Why do you think that the modern techniques are superior to traditional techniques of capital budgeting? Explain. 6. What are the pros and cons of equity source of finance?

7. Write a note on life cycle of a project.

P.T.O

SECTION - C

Answer any three questions. Each question carries 10 marks. 8. A bottle manufacture operates two machines, each with a capacity of producing 1000 bottles per annum. The machines have are infinite life and no salvage value. The operating expenses are Rs.2 per bottle. During summer the machines work to full capacity. During winter because of slack in demand they work only at 50% capacity. The company is toying with the idea of replacing these machines with two identical machines. Each machine costs Rs.6,000 and last indefinitely. The operating costs are Re 1 per bottle. What should the company do? Cost of capital is 10%.

9. A company is considering two projects. The probability distribution as also the likely, net present values for each of these projects is furnished below:

Project 4000 8000 11000 14250

A 0.2 0.3 0.3 0.2

Project 4000 8000 11000 14000

B 0.15 0.35 0.35 0.15

Determine:

1) Expected NPV of the two projects. 2) Risk attached to each of these projects. 3) Which project would you prefer and why?

10. Explain in detail the project management practices in India. 11. Critically examine the Internal Rate of Return method of capital Budgeting. 12. What is a Dicision Tree? Describe briefly the basic rules for drawing a dicision tree. Also the role back technique in analysing a dicision tree.

SECTION-D 13. Case study (Compulsory): Zola Pique Ltd. is a multinational with HQ in Mumbai. It has more than half a dozen subsidiaries in different countries, one of which, also a holding company is located in Nassan. The purpose of locating in a tax haven such a Nassan is aimed at minimising global tax liability, particularly in the area of dividend remittances. Zola Pique Ltd, are now keen on doubling their scale of operation in Berlin and in USA, at a total cost of the equivalent of pounds 120 Million. For purpose of matching international requirements, the company prepares its financials denominated in pound sterling, a summary of financial information is furnished below.

Turnover Pre tax earnings

Group as a whole UK 5040 672

Euro subsidiary Euro 2640 408

US subsidiary US $ 816 90

Fixed assets Current assets Short term loans Other liabilities Sub total

Funded by equity shares

Reserves Sub total Term debts Total

1440 2160 (480) (840) 2280 480 1080 1560 720 2280

840 960 (360) (480) 960 120 300 420 540 960

300 252 (144) (96) 312 24 156 180 132 312

Zola is considering following alternatives: a) Euro equity issue. b) 15 year 10% Eurobonds issue, denominated in dollars. c) A syndicated facility for a term of 5 years denominated in ECU. This will be a 5 year loan of 162 million floating 1.5% over ECU base rate currently ruling at 5% Required: Discuss the pros and cons of each issue.

----------------------------------------

III Semster M.B.A. Examination, June/July-2008

Management Elective: A Finance
Course-17A: MERCHANT BANKING AND FINANCIAL SERVICES
Time:3 Hours Max. Marks: 75

SECTION A

1. Answer any five sub-questions. Each Questions carries 2 marks. a) What is private placement? b) What is primary market? c) What is book building? d) Define leveraged buyout. e) Define financial lease. f) What do you mean by factoring?

(5X2=10)

g) What is credit rating? SECTION B

Answer any four questions. Each question carries five marks. 2. Explain the functions of financial services. 3. Explain the reasons for buy back of shares. 4. Discuss the advantages of bill discounting.

(4X5=20)

5. Explain the difference between the Hire purchase system and Instalment credit system 6. Explain the various instruments of securitisation. 7. Discuss the functions of stock exchange.

P.T.O

SECTION - C

Answer any three questions. Each question carries 10 marks. 8. Explain in brief the different corporate advisory services of a merchant banker.

9. Discuss the pre-issue activities relating to issue management. 10. Describe the venture capital investment appraisal process and management. 11. Briefly explain the types and structure of insurance policies of LIC. 12. Discuss briefly the working credit rating agencies in India.

SECTION-D 13. Case study (Compulsory): ABC Ltd. is interested in acquiring asset costing Rs.5,00,000. It has two options i) To borrow amount at 12% p.a. repayable in five equal instalments.

ii) To taken on lease the asset for a period of five years at the year end rentals of Rs.1,00,000. The corporate tax rate is 35% and depreciation is allowed as written down value at 20%. The asset will have a salvage of Rs. 1,20,000 at the end of the fifth year.

You are required to advice the company about lease or buy decision. The present value of Rs. 1 @ 12% discount factor.

Year:

Discount factor:

893

797

712

636

567

----------------------------------------

III Semster M.B.A. Examination, June/July-2008

Management Elective: A Finance
Course-18A: MANAGEMENT OF INFRASTRUCTURE FINANCING

Time:3 Hours

Max. Marks: 75

SECTION A

1. Answer any five sub-questions. Each Questions carries 2 marks. a) What is WBS? b) What is RAM? c) Define milestone. d) Define deliverables. e) What is foreclosure? f) What is quality audit?

(5X2=10)

g) What is environmental feasibility? SECTION B

Answer any four questions. Each question carries five marks. 2. What are the sources of long term finance for infrastructure projects? 3. What are the functions of IDEC? 4. How are the infrastructure mutual funds performing in India? 5. What is global competitive bidding? 6. Explain the various instruments of securitisation. 7. What are the fiscal incentives for infrastructural projects?

(4X5=20)

P.T.O

SECTION - C

Answer any three questions. Each question carries 10 marks. 8. Discuss the stages of a project life cycle. 9. Analyse the financing needs of infrastructure projects in India. 10. Discuss the various forms of PPP in infrastructure projects. 11. Discuss the issues in tariff fixation in infrastructure projects. 12. Evaluate the risks in executing infrastructure projects.

SECTION-D 13. Case study (Compulsory): The Government of Karnataka recently launched metro rail project for Bangalore city at a cost of more than Rs. 6,000 crores. Analyse the financing of this project. What are the issues involved in fixing tariff for commenters?

----------------------------------------

IV Semester M.B.A. Examination, June/July-2008

Management (New)

Course-19: INTERNATIONAL BUSINESS ENVIRONMENT (Compulsory)

Time:3 Hours

Max. Marks: 75

1. Answer any five sub-questions. Each sub-question carries two marks.

SECTION - A

(5X2=10) r) What is an international business? s) What is meant by Greenfield investment? t) What do you mean by transfer price? u) What is franchising? v) What is counter trade? w) What id TRIMS? x) What is ethnocentric approach?

SECTION B

Answer any four questions. Each question carries 5 marks. 2. What are the differences between domestic and international business?

(4X5=20)

3. Briefly discus bow legal environment influences upon international business. 4. Give an account on management if political risks in an international business. 5. Distinguish between GATT and WTO. 6. Explain comparative advantage theory.

7. Give an account on appreciation of Indian rupee on textile industry.

P.T.O

SECTION - C

Answer any three questions. Each question carries 10 marks. 8. Discuss the modes of international business.

(3X10=30)

9. Sketch out how international business is influenced by economic and socio-cultural environment. 10. Explain the proceedings of Singapore-WTO-Ministerial Conference. 11. Discuss how MNC help fostering economic growth of India. 12. Critically evaluate the functioning of foreign exchange market.

SECTION D

13. Case (Compulsory) :

Cultural Factors in an MNC

Mr. Karthik Krishna, now 50, was selected as a regional manager by Bata Shoe Organization in 1996 and was appointed in Bombay. He and his family members were very happy for his quick promotions in Bata. Mrs.Rema, Mr.Karthik Krishnas wife, strongly believed in Indian culture. She was a typical Indian housewife, a big chatterbox, who spend much of her time in chit chatting with her friends.

Mr. Karthik had been innovative in formulating a number of performance appraisal programmes, cross-cultural training and compensation packages. The management of the company was impressed with his skills and abilities and he was promoted and transferred to its headquarters at Toronto, Canada.

Mr. Karthik and his family were very happy to take up the new assignment. They landed in Canada in February 2003. The company provided housing, medical and conveyance facilities to Mr. Karthik and his family. Mr. Karhik liked his new job, as it was highly challenging and rewarding. In addition, he got a number of opportunities to interact with top executives coming from different countries. He and his family were very much excited with the facilities given by the company.

Karthik became very busy and had little time for his family. Consequently, his wife was forced to spend most of her time in isolation, since, unlike in India no one in Canada spends their time for their neighbours. She could not adjust with this aspect of the western culture at her late 40s. She was thrown to severe depression. She forced her husband to leave the job and the country.

Analyse the above case and identify the strengths and weakness.

------------------------------------------

IV Semester M.B.A. Examination, June/July-2008

Management (New)

Course-20: OPERATION MANAGEMENT (Compulsory)

Time:3 Hours

Max. Marks: 75

1. Answer any five of the following sub-questions. Each sub-question carries two marks.

SECTION - A

(5X2=10) a) What is operations decision? b) Define operations strategy. c) What is a productivity measurement? d) What do you mean by quality function development? e) What is concurrent engineering? f) How operational classification of services done?

g) Define JIT.

SECTION B

Answer any four questions. Each question carries 5 marks. 2. What are the approaches to job design? Discuss. 3. What is line balancing? Discuss briefly the methods of line balancing.

4X5=20)

4. What is meant by aggregate planning? Explain how do you plan, 8 to 10 types of a product, and schedule these types of product. 5. What is cellular manufacturing? 6. What do you understand by learning curves and its applications? 7. Discuss the factors influencing product development.

P.T.O

SECTION - C

Answer any three questions. Each question carries 10 marks.

(3X10=30)

8. The following tasks must be performed on an assembly line in the sequence and times specified:
Task : A B C 20 A D 45 C E 20 C F 25 D G 10 E H 35 B,F,G

Task Time (Seconds)

: 50

40 -

Task that must precede : -

a) Draw a precedence diagram. b) What is the theoretical minimum number of stations required to meet a forecasted demand of 400 units per 8-hour day? c) Balance the line in any of the methods. 9. In an attempt to increase productivity and reduce costs, RS Corporation is planning to install an incentive pay plan in its manufacturing plant. In developing standards for one operation, timestudy analysts observed a worker for a 30-minute period. During that time the worker completed 42 parts. The analysts rated the worker as producing at 130 percent. The base wage rate of the worker is Rs. 100 per hour. The firm has established 15 percent as a fatigue and personal time allowance.

a) b)

What is the normal time and standard time for the task? If the worker produced 500 units during an eight hour day, what wages would the worked have earned?

10. Why does the operations strategy keep changing for companies that are world class competitors? Discuss with examples. 11. What are some capacity considerations in a service industry? How do they differ from those in a manufacturing firm?

12. Discuss JIT in job-shop layout and in a line layout.

SECTION D

13. Case (Compulsory) :

Alan Engineering Contractors creates six-month rolling schedules, which are recomputed monthly. For competitive reasons, the company does not subcontract. Therefore, its only options to meet customer requirements are 1) work on regular time 2) work on overtime, which is limited to 30 percent of regular time; 3) do customers work early which would cost an additional Rs.100 per hour per month and 4) perform customers work late, which would cost an additional Rs.200 per hour per month penalty as provided by their contract.

Alan Engineering has 25 engineers on its staff at an hourly rate of Rs.300. customers hourly requirements for the six months from Jan. to June are:

Jan 5,000

Feb 4,000

March 6,000

April 6,000

May 5,000

June 4,000

Develop an aggregate plan using the transportation method of linear programming. Assume 20 working days in each month.

------------------------------------------

IV Semester M.B.A. Examination, June/July-2008

Management (New)

Course-21: TOTAL QUALITY MANAGEMENT (Compulsory)

Time:3 Hours

Max. Marks: 75

1. Answer any five of the following sub-questions. Each sub-question carries two marks.

SECTION - A

(5X2=10) a) Define Capability Index. b) Define Quality Costs. c) What is Internal Benchmarking? d) What do ASQ and ANSI stand for? e) What id meant by Voice of the Customer? f) Explain the concept of Kanban System.

g) What is JIT System?

SECTION B

Answer any four questions. Each question carries 5 marks.

4X5=20)

2. Explain why quality should be better by following the TQM concept than in a system that depends on final inspection. 3. How can top management communicate the need for quality throughout the organization? 4. What is Deming Cycle? How it is used to improve quality? 5. Construct a Flow Diagram/Chart for the manufacture of a product or providing a service. 6. Explain the concept of Quality is Free. Who is the author of this concept? 7. Explain the key elements of Total Quality Management.

P.T.O

SECTION - C

Answer any three questions. Each question carries 10 marks. 8. Explain the concepts of Quality Function Deployment and list its benefits.

(3X10=30)

9. Explain the key differences between traditional management practices and those in a TQ environment. 10. Explain the benefits of and controversy surrounding ISO 9000. Can ISO 9000 lead an organization to world-class quality? 11. Is Japanese success in attaining higher levels of quality to do with good management practices or with national cultural factors? Justify your answer. 12. What according to Philip Crosby are the four Absolutes of Quality Management?

SECTION D

13. Case (Compulsory) :

Reengineering at A T & T Universal Card Services:

In 1992 the Universal Card Services division of AT and T, just 31 months in existence, won the Malcolm Baldrige Quality Award. The divisions strong suit was customer satisfaction, although the much improved customer delight was chosen as the bases for the company values.

Despite the award, the found itself with an embarrassment of riches-or more precisely an embarrassment of customers. The success of the companys combination credit card/longdistance phone card was astounding, charter members would receive a reduced rate credit card that charged several points below market interest rates and had a lifetime membership without an annual fee. In addition, the card gave a 10 percent discount on long distance calls. The card

was launched on the Academy Awards Show. In the first 24 hours, 250.000 inquiries were received, and at the end of one year 5 .3 million people had become charter members.

The response overwhelmed the companys ability to accommodate customer inquires. A major roadblock was information technology. Phone reps were given underperforming dumb terminals manufactured by AT & T, the parent company. The reps were unable to integrate information from multiple mainframes and had to bounce from screen to screen while keeping up a conversation with the caller. These computer hardware problems were subsequently solved by the installation of advanced systems, which are under continuing review and reengineering in search of faster response times and greater flexibility. Currently the phone reps field about 1.2 million inquires per month and answer 95 percent before 20 seconds have elapsed.

Information technology can improve both productivity and quality in a number of ways. For example, the company is testing a voice recognition unit that can reduce costs by more than a factor of 10. A voice response call costs 20 cents as compared to $ 2.50 for a representative to service the same customer.

Information technology is also valuable for research and data analysis. By analyzing the callmanagement database, workload forecasts can be made each day or shift to allow for optimum use of personnel between departments.

The company has not overlooked the soft side of information technology. The value system of customer delight demands rapid, accurate and courteous responses to customer calls. Onethird of the workforce which operates in self-directed teams focuses on behaviour training, including ways to influence people, how to negotiate, and how to resolve conflicts. These teams have allowed the company to flatten the organization and increase the ratio of associates to supervisors from the current 20 to 1.

Questions :

1) What is the role of information technology in productivity improvement? What is its role in reengineering? 2) Choose a process and trace the steps in the process to demonstrate how many separate operations are involved. How could the process be reengineered?

------------------------------------------

IV Semester M.B.A. Examination, June/July-2008

Elective A : Finance - Management (New)

Course-22A: INTERNATIONAL FINACNCE MANAGEMENT

Time:3 Hours

Max. Marks: 75

1. Answer any five sub-questions. Each question carries two marks.

SECTION - A (5X2=10) a) Write the structure of current account in balance of payments. b) If direct quote is Rs.40.50-40.60/US $, how can this be presented under indirect quote? c) Find the cross for /Euro, if Euro.6035-.6045/US $ and .5025-.5035/US $ (=British Pound) d) Distinguish between call option and put option. e) What is parallel loans? f) Define netting.

g) What is mark to market margin? SECTION B

Answer any four questions. Each question carries 5 marks.

4X5=20)

2. You receive the following quote for Swiss France against the dollar spot, one month, three months and six months forward 1.6075 to 1.6085, 10 to 15, 14 to 22, 20 to 30. 3. What is location arbitrage? If, Bank X quotes in NY.$0.9650 70/Euro, Bank Y quotes in London $ 0.9630- 40/Euro how the corporate treasury could make geographical arbitrage profit using 1 million Euro? 4. Discuss I.R.P Theory. 5. What are the methods of managing operating exposure? 6. Why should a foreign project be evaluated both from a subsidiary and parent view point? 7. A US importer importing foods for Pound 62500 fears an appreciation of pound. He likes to hedge the risk through options. Options are available to him at two different rates. One is US $ 1.60/ and the other is US $ 1.70/. The premium in both cases is US $ 0.03/. If the spot rate on the maturity goes upto US $ 1.65/, what will be his course of action?

P.T.O

SECTION - C

Answer any three questions. Each question carries 10 marks. 8. Examine different theories of exchange theories of exchange rate determination.

(3X10=30)

9. Discuss the complexities of international financial management compared to domestic financial management. 10. Describe the concept of leads, lags and transfer pricing. 11. Explain the functions of the foreign exchange market. Who are the participants in the market? 12. Define International Fisher Effect. Assume that one year interest rate 3% in U.S. and 5% in Euro zone. The spot rate between the Euro and the Dollar is .02/$. Assuming I.F.E. holds what should be / $ rate be one year hence? SECTION D

13. Case Study (Compulsory) :

Mr. Gupta is the chief financial officer of a manufacturing company. His company has imported a machinery for $ 5 million payable after 90 days. He does not want to take risk. He has collected following information for the analysis of his currency exposure problem.

a) b) c) d) e)

Spot rate is Rs. 40/US $ 90 days forward rate is Rs. 39.50/US $ Interest rate on borrowing in India and U.S 6% p.a Interest rate on investment-both countries 5% p.a A 90 day call option is having a strike price of Rs.39.60 and premium of Rs.0.05 per dollar.

f) g)

A 90 day put option strike price is Rs.39.80 and premium of Rs.0.05 per dollar. Spot rate on the 90th day is Rs.39.80/US $. Advice : The finance manager to opt for: a) No Hedge b) Forward market c) Hedge in money market d) Hedge in options market.

------------------------------------------

IV Semester M.B.A. Examination, June/July-2008

Elective C : Human Resources - Management (New)

Course-22C: MANAGEMENT OF INDUSTRIAL RELATIONS

Time:3 Hours

Max. Marks: 75

1. Answer any five sub-questions. Each question carries two marks.

SECTION - A (5X2=10) a) What is industrial relations? b) What is industrial conflict? c) Define a trade union. d) What is collective bargaining? e) What is collective bargaining? f) What is industrial peace?

g) What is arbitration? SECTION B

Answer any four questions. Each question carries 5 marks. 2. Bring out the importance of trade unions in industrial relations. 3. Describe the nature and significance of industrial relations. 4. What are the different types of trade unions? 5. Comment on the role of outsider in trade unions. 6. What are the causes of industrial disputes?

4X5=20)

7. What are the main features of collective bargaining?

SECTION - C

Answer any three questions. Each question carries 10 marks. 8. Explain the role of state in maintaining industrial relations. 9. Examine the various approaches to trade unionism. 10. Explain the conditions necessary for a strong and successful trade unions. 11. Elucidate the implication of industrial peace and industrial unrest.

(3X10=30)

P.T.O 12. Without the threat of strike in the background collective bargaining cannot exist in IndiaComment. SECTION D

13. Case Study (Compulsory) :

Arpana Textiles is a leading industry having a workforce of more than 1200 employess, engaged in the manufacture of cotton yarn of different counts. The company has well-established distribution network in different parts of country. It has modernised all its plants, with a view to improve the productivity and maintain quality. To maintain good human relations in the plant and the organisation as whole, it has extended all possible facilities to the employees. Compared to other mills the employees of Arpana Textiles are enjoying higher wages and other benefits.

The company has a chief executive followed by executives in-charge of different functional areas. The Industrial Relations Department in headed by the Industrial Relations Manager. The employees are represented by five trade unions- A, B, C, D and E (Unions are alphabetically presented based on membership)- out of which the top three unions are recognised by the management for purpose of negotiations. All the unions have maintained good relations with the management individually and collectively.

For the past ten years, the company has been distributing bonus to the workers at rates more than the statutory minimum prescribed under the Bonus Act. Last year, for declaration of rate of

bonus, the management had a series of discussions. With all recognised unions and finally announced a bonus, which was in turn agreed upon by all the recognised unions. The very next day when the management prepared the settlement and presented it before the union representatives, while unions A and C signed the same, the leader of union B refused to do so and walked out, stating that the rate of bonus declared was not sufficient. The next day, union B issued a strike notice to the management asking for higher bonus. The management tried its level best to avoid the unpleasant situation, but in vain. As a result, the members of unions B went on strike. They were joined by the members of union D.

During the strike, the management could probe the reason for the deviant behaviour of union B leader, it was found that leader of union A, soon after the first meeting, had stated in the presence of a group of workers, It is because of me that the management has agreed to declare this much amount of bonus to the employees: union B has miserably failed in its talks with the management for want of initiative and involvement. This observation somehow reached the leader of union B as a result of which he felt insulated.

Soon after identifying the reason for union Bs strike call, the Industrial Relations Manager brought about a compromise between the leaders of unions A and B. Immediately after this meeting, the strikers (members of union B and D) resumed work and the settlement was signed for the same of bonus as was originally agreed upon.

Questions:

1) Was the leader of union A justified in making remarks which made the leader of union B feel offended? 2) What should be managements long term strategy for avoiding recurrence of inter-union differences on such issues?

3) If you were the Industrial Relations Manager, what would have you done had the union B resorted to strike for a reason other than mentioned in the case?

------------------------------------------

IV Semester M.B.A. Examination, June/July-2008

Elective B : Marketing - Management (New)

Course-23B: INDUSTRIAL MARKETING

Time:3 Hours

Max. Marks: 75

1. Answer any five sub-questions. Each question carries two marks.

SECTION - A (5X2=10) a) What is consumer marketing? b) What do you mean by vendor analysis? c) Define strategy planning? d) What is marketing information system? e) What do you mean by product life cycle? f) What is channel strategy?

g) Define marketing research. SECTION B

Answer any four questions. Each question carries 5 marks. 2. How does the concept of joint demand impact the firm selling to resellers? 3. Explain the nature of industrial buying. 4. What are the components of industrial marketing strategy?

4X5=20)

5. How do customer experiences versus inexperience affect marketing segmentation strategy? 6. Explain the relationship of innovation of productivity.

7. Why industrial firms choose their distributors? Explain.

SECTION - C

Answer any three questions. Each question carries 10 marks. 8. Discuss the strategies for managing the industrial marketing environment. 9. Describe the conflict resolution strategies. 10. Explain the role of qualitative research over quantitative research.

(3X10=30)

P.T.O

11. Explain the relationship between new product development and strategic planning. 12. Discuss the impact of logistical service on channel members.

SECTION D

13. Case Study (Compulsory) :

Vinod Nair, sales executive of Zerise Documentation Ltd., encounters the Head, Department of Management Studies of the University, to sell photocopying machine. We already have a photocopying machine. I am sorry Mr.Nair, we dont need any more machine. Says the Head. But that machine you have now is kept in the library and I understand that it is fully employed. You have a very large quantity of course materials to reproduce. I feel that you need some more copiers, suggest Nair. The Head retorts. Look Mr.Nair, we have a typing pool of four time typists and one Section Officer to produce the course materials. We also have a duplicating machine and an operator for that. If we have to make one copy of any document, we photocopy it, if we want four or five copies we type it and if more copies are needed we cut stencil and take copies. The present arrangement can take care of our requirements. We certainly dont need any more photocopying machine. Anybody would like to have additional facilities, but we have financial constraints so that we cant afford the luxury of an additional photocopier.

But Sir Although Nair tried to put forward his proposition, he has stopped by the Head who had to leave immediately to meet the Vice Chancellor as per the appointment. Nair pleaded for

an appointment some time later when the Head could spare some time. If you are very particular about meeting me you may do so somewhere next week. But, I have already told you that we dont need another copier. So, if you are inclined to waste some time, you may take an appointment and meet me. Saying this Head stands up to leave for the meeting.

Questions:

1) Should Nair Regard it as a closed chapter or should he meet the Head again? 2) If you feel that Nair should endeavour again to make a sale, draw up a strategy that would enable him to make the Head favourably disposed.

------------------------------------------

IV Semester M.B.A. Examination, June/July-2008

Elective A : Finance- Management (New)

Course-23 A: Portfolio Management and Security Analysis

Time:3 Hours

Max. Marks: 75

1. Answer any five sub-questions. Each question carries two marks.

SECTION - A

(5X2=10) a) Security market line b) Single index model c) Random walk d) Market to book ratio e) Risk aversion f) Arbitrate pricing theory

g) Covariance matrix SECTION B

Answer any four questions. Each question carries 5 marks. 2. Outline some of the tools of technical analysis. 3. Can portfolio variance be zero? Explain.

4X5=20)

4. A stock price on Jan.1 was Rs.748 on March 31 it was Rs.702/-. During that period dividend of Rs.30 was received. What is the holding period return? 5. What factors influence portfolio combination? 6. How do you explain the divergence between market price and intrinsic value of a security 7. What is a securitys alpha?

SECTION - C

Answer any three questions. Each question carries 10 marks.

(3X10=30)

8. A company has been experiencing on normal dividend growth-rate of 20 percent per year for the last 5 years. This normal growth rate is expected to continue for another 5 years before it levels affect a more normal rate of 6 percent. Companys last dividend was Rs.0.50 per share. Determine the current value of stock if its required rate of return is 15 percent. P.T.O

9. Outline Dons Theory. 10. Carry out a technical analysis using relative strength technique.

Year

Price of Maruthi

Price of Nifty

Price of Automotive Industry

(PM) 1994 1995 1996 Rs.40 45 65

P(N) Rs.250 270 300

P(A) Rs.20 22 25

11. List out the cnomalies to CAPM. 12. Calculate the expected return of risk for the following probability distribution:
Probability .2 .4 .3 .1 1.0 Annual Stock X -5% 10 -4 7 Return Stock Y 6% -2 8 -9

SECTION D

13. Case Study (Compulsory) : A company is considering adding a new product division. If a new division is added, it will cover a 20 percent increase in the existing profit margin and 40 percent increase in the existing profit margin and 40 percent increase in total assets. The increase in asset will be financed with debt. Determine the RUE if sales remain constant. Assume the following ratios existed before the change in assets:

N1 Profit Margin = Sales = 1.2

Sales Total asset turnover = Total assets = 2.5

Total assets Equity Multiplier(EM) = Equity = 1.5

------------------------------------------

IV Semester M.B.A. Examination, June/July-2008

Elective C : HUMAN RESOURCES MANAGEMENT Management (New)

Course-23C: International Human Resource Management

Time:3 Hours

Max. Marks: 75

1. Answer any five sub-questions. Each question carries two marks.

SECTION - A (5X2=10) a) Define the term International Human Resource Management. b) Mention three functions of International Human Resource Management. c) What is ethno centric approach? d) Mention three disadvantages of poly centric approach. e) What are the two advantages of Regio-centric approach? f) What do you understand by the term Expatriate Failure?

g) Define the term International Performance Management. SECTION B

Answer any four questions. Each question carries 5 marks. 2. Explain the factors influencing purchasing performance measurement.

4X5=20)

3. Explain the methods of establishing performance standards? 4. State the SCM skills. 5. Explain the supply chain strategies. 6. What factors are to considered while evolving a compensation package by a multi-national company? 7. Explain the supply chain management process?

SECTION - C

Answer any three questions. Each question carries 10 marks. 8. Explain the four major decision areas in supply chain management?

(3X10=30)

P.T.O

9. Why should purchasing performance be measured and evaluated? 10. State the cultural dos and Donts in Japan. 11. Explain the cultural characteristics of USA and Europe. 12. What precautions should an organization take before introducing e-HR?

SECTION D 13. Read the following case and answer the questions given below:

13. Case Study (Compulsory) :

Despite the problems with forced ranking systems, first consulting group, an IT health care consulting firm is based in long beach, California, uses a forced ranking system. The company system has five numerical grades that do not mandate the exact proportion of employees to be placed in different categories or what will happen to those employees. Ranking are combined with the results of traditional employee evaluations and project reviews to provide a

comprehensive picture of each employees strengths and weaknesses. Managers and coaches discuss each employees performance for about 10 minutes and then each evaluator gives employees a numerical score. The scores for each employee are averaged. In a recent session rating 11 employees on a scale of 1 to 5 almost every employee was placed in the 2s and 3s. After discussion there was one top performer and one bottom performer with the other employees spread out between.

Questions:

1) How does this type of performance management system potentially affect training and development of compensation? 2) Why might this type of ranking system work in comparison to those systems discussed in the given case?

3) What recommendations would you give to first consulting group to make this systems even more effective?

------------------------------------------

IV Semester M.B.A. Examination, June/July-2008

Elective A : Finance Management (New)

Course-24A: FINANCIAL DERIVATIVES

Time:3 Hours

Max. Marks: 75

1. Answer any five sub-questions. Each question carries two marks.

SECTION - A (5X2=10) a) Distinguish between buying and selling forwards. b) Can Forwards be entered into by any two persons? c) Are there margins for forwards? d) Name any stock exchange in India where futures are traded. e) What is shorting the futures? f) How can futures be used to protect against price fall?

g) How is speculation done with futures? SECTION B

Answer any four questions. Each question carries 5 marks. 2. What is continuous compounding?

4X5=20)

3. What can a hedger do if he wants a hedge for 5 months and a futures contract is available only for a 3-month tenure? 4. What is the maximum pay off of a buyer of futures? How is it different from that of a seller of futures? 5. In what way does the mimicking portfolio help a portfolio manager? 6. Protective put strategy does not work in a rising market. Why? 7. How are futures useful in portfolio management?

P.T.O

SECTION - C

Answer any three questions. Each question carries 10 marks.

(3X10=30)

8. Will there be circumstances when the upper limit of an American call is different from the upper limit of a corresponding European call? 9. If the difference between the exercise prices of two American call is Rs.8, can the two calls have prices of Rs. 32 and Rs.12? Explain. 10. If the call price is Rs.12, the stock price is Rs. 100 and the present value of the strike price is Rs.98, what should be the corresponding put price? Explain. 11. What is covered call writing? Does it work in real life? 12. Using your own examples explain how options can be used by a portfolio manager.

SECTION D

13. Case Study (Compulsory) :

David has a portfolio of securities. In recent months he has started using options to protect/enhance his portfolio. Thus he has indulged in covered call writing, buying protective puts and doing several combinations. Now his portfolio worth is Rs.20 lakhs consisting of 15 companies shares of various quantities. Because the market is volatile, Ram wants to profit from the period of the next 3 months, and at the same time not take undue risk. He is exploring strategies using options. He finds that only American options are available for specific securities. European options are available only for the index options. The Beta of his portfolio is 0.9. Questions:

1) Name possible strategies that are possible. Are these in the nature of profit making or for protection?

2) The fact that securities options are American is both an advantage and disadvantage for David. Explain.

3) How much risk is there in any of the strategies that could be followed?

------------------------------------------