| SESSION | FEB- MARCH 2025 |
| PROGRAM | MASTER OF BUSINESS ADMINISTRATION (MBA) |
| SEMESTER | 4 |
| COURSE CODE & NAME | DFIN401 INTERNATIONAL FINANCIAL MANAGEMENT |
Assignment Set – 1
Q1. Explain various derivative instruments traded in the Foreign Exchange market.
Ans 1.
Forex Derivatives
The foreign exchange (forex) market is one of the largest and most liquid financial markets globally. It facilitates the trading of currencies between participants across borders. Derivative instruments in the forex market are primarily used for hedging, speculation, and arbitrage purposes. These instruments derive their value from underlying currency exchange rates and help manage foreign
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Q2. Describe the components of the Balance of Payments. 10
Ans 2.
Balance of Payments (BoP)
The Balance of Payments (BoP) is a comprehensive record of all economic transactions between the residents of a country and the rest of the world over a specific period, usually a year or quarter. It helps assess a country’s economic strength, currency stability, and international financial position. The BoP is divided into distinct components that reflect trade, investment, and
Q3. Write Short notes on:
- i) Interest rate parity
- ii) Forward-to-forward contracts 5+5
Ans 3.
(i). Interest Rate Parity (IRP)
Interest Rate Parity (IRP) is a fundamental principle in international finance that explains the relationship between interest rates and exchange rates. It forms the theoretical foundation for the pricing of forward exchange rates and ensures that there are no arbitrage opportunities in the foreign exchange markets.
Concept of IRP
The Interest Rate
Assignment Set – 2
Q4. “Factoring is an efficient financing technique.” Comment. 10
Ans 4.
Factoring
Factoring is a short-term financing technique in which a business sells its accounts receivable (invoices) to a third party (called a factor) at a discount in exchange for immediate cash. It is an important tool for improving liquidity and managing working capital, especially for small and medium
Q5. What aggressive and defensive approaches can a firm use in hedging? 10
Ans 5.
Hedging Approaches
Hedging is a financial strategy used by firms to minimize or eliminate the risk of adverse price or currency movements. In international financial management, hedging is vital for managing exposure to foreign exchange fluctuations. Firms typically adopt either aggressive or defensive hedging strategies depending on their risk appetite, financial goals, and market conditions.
Aggressive Hedging Approach
An aggressive hedging approach involves selectively or partially hedging foreign exchange exposures. Firms
Q6. Define cross-border acquisition and discuss its effects. 2+8
Ans 6.
Definition of Cross-Border Acquisition
A cross-border acquisition refers to a business transaction in which a company from one country acquires a controlling interest in a company located in another country. It is a strategic tool used by firms to expand their global footprint, access new markets, gain technological know-how, or achieve economies of scale.
In this process, the acquiring firm takes over the assets, operations, and management of the target foreign company,
| SESSION | FEB MARCH 2025 |
| PROGRAM | MASTER OF BUSINESS ADMINISTRATION (MBA) |
| SEMESTER | 4 |
| COURSE CODE & NAME | DFIN403 MERCHANT BANKING AND FINANCIAL SERVICES |
Assignment Set – 1
Q1. What are the pre-issue obligations of merchant bankers as per SEBI?
Ans 1.
Pre-Issue Obligations of Merchant Bankers as per SEBI
Merchant bankers play a crucial role in the primary securities market by assisting companies in raising capital through public issues. To protect investor interests and ensure transparency, the Securities and Exchange Board of India (SEBI) has laid down comprehensive guidelines concerning the pre-issue obligations of merchant bankers. These obligations are mandatory and are aimed at enhancing the
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Q2. Discuss in detail the process of dematerialisation and re-materialisation. 5+5
Ans 2.
Dematerialisation and Re-materialisation
Dematerialisation and re-materialisation are critical processes in modern securities trading, allowing investors to convert physical shares into electronic format and vice versa. These processes ensure the safe, secure, and efficient handling of securities, minimizing the risks associated with physical certificates. The National Securities Depository Limited (NSDL) and Central Depository Services
Q3. Define the concept of merchant banking along with the functions performed by a merchant banker. 3+7
Ans 3.
Merchant Banking and Functions of a Merchant Banker
Merchant banking is a blend of financial advisory services and fundraising activities offered primarily to corporate clients. As per SEBI, a merchant banker is a person or an institution engaged in the business of issue management, either by making arrangements for the selling, buying, or subscribing of securities, or by acting as manager, consultant, or advisor. Unlike commercial banks, merchant bankers do not provide loans or accept deposits; rather, they act as intermediaries in capital markets, facilitating services such as public offerings, underwriting, portfolio
Assignment Set – 2
- Write and discuss different credit rating agencies in India. 10
Ans 4.
Credit Rating Agencies
Credit Rating Agencies (CRAs) are institutions that assess and assign ratings to companies, financial instruments, or debt obligations based on their creditworthiness. These ratings reflect the borrower’s ability to meet debt obligations and help investors make informed decisions. In India, credit rating agencies operate under the regulatory oversight of the Securities and Exchange Board of India (SEBI) and play a significant role in maintaining transparency and stability in
Q5. What do you mean by mergers and acquisitions (M&A)? What are the key reasons companies merge with or acquire other businesses? 3+7
Ans 5.
Mergers and Acquisitions (M&A)
Mergers and Acquisitions (M&A) are strategic financial activities undertaken by companies to enhance their competitiveness, market share, and financial performance. A merger occurs when two or more companies combine to form a new entity, usually with the goal of synergizing their operations. In contrast, an acquisition involves one company purchasing a controlling stake or the entire operations of another company. In both cases, the primary objective is to generate value for
Q6. Write a Note on:
- Advantages of Leasing
b . Types of factoring contracts 5+5
Ans 6.
- Advantages of Leasing
Preservation of Working Capital
One of the most significant advantages of leasing is that it allows businesses to use high-value assets without the need for large upfront capital investments. Instead of buying machinery, equipment, or property, firms can lease them and conserve their cash flow for operational needs. This becomes especially useful for startups and small businesses facing liquidity constrain
| SESSION | FEB-MAR 2025 |
| PROGRAM | MASTER OF BUSINESS ADMINISTRATION (MBA) |
| SEMESTER | IV |
| COURSE CODE & NAME | DFIN404 INSURANCE AND RISK MANAGEMENT |
Assignment Set – 1
Q1. Write a short note on the general structure of the Insurance market. 10
Ans 1.
Insurance Market Structure
The insurance market is a crucial component of the financial system, offering risk transfer mechanisms and financial protection to individuals, businesses, and governments. The structure of the insurance market is designed to support a wide variety of insurance needs through a network of players, regulatory frameworks, and service models. The structure ensures that risk is managed efficiently, claims are processed fairly, and policies are underwritten
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Q2. Reforms in the Indian Insurance Industry
Ans 2.
Insurance Sector Reforms
The Indian insurance industry has undergone significant reforms since the 1990s, transitioning from a state-dominated setup to a competitive, private-sector-driven industry. These reforms have been instrumental in expanding insurance penetration, introducing innovative products, and ensuring better regulatory control. The aim of the reforms has been to make insurance more accessible, customer-centric, and financially robust.
Liberalization and
Q3. What are the various financial factors that influence the functions of the insurance industry?
Ans 3.
Financial Factors in Insurance
The insurance industry, like other financial services sectors, is highly influenced by a range of financial factors. These factors determine not just the operational efficiency and solvency of insurance companies but also their pricing strategies, risk management approaches, and ability to fulfill policyholder claims. A stable financial foundation is essential for sustaining trust and ensuring long-term growth
Assignment Set – 2
Q4. Explain in detail the Product development process in India’s Life and Non-Life Insurance sectors. 10
Ans 4.
Product Development in Insurance
Product development is a critical function in both life and non-life insurance sectors, aimed at creating innovative insurance solutions that meet the evolving needs of customers while aligning with regulatory norms. The process involves several stages—right from market research to regulatory approval and final launch. In India, this process is governed by IRDAI, ensuring consumer protection and
Q5. Write a short note on the objectives of claim management. 10
Ans 5.
Claim Management
Claim management is a vital function within the insurance industry that deals with handling and processing of claims made by policyholders. It ensures that valid claims are settled efficiently, fairly, and in accordance with the policy terms. An effective claim management system builds customer trust, enhances insurer reputation, and ensures financial stability.
Ensuring Prompt and
Q6. Mention the types of Reinsurance in brief. 10
Ans 6.
Reinsurance
Reinsurance is the process through which insurance companies transfer a portion of their risk portfolios to another insurer, called the reinsurer. This risk-sharing mechanism protects insurers against significant losses, enhances capacity, and ensures financial stability. Various types of reinsurance arrangements exist based on how the risks and premiums are shared.
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