Capital Market and Portfolio Management
1. Assume that you are planning to invest in the capital market. What steps will you follow to start trading in the capital market.
2. You are given the following information on two stocks BI and B2. The stock B1 performed well in slowdown as compared to B2. Both the shares are selling at Rs.90 per share. The estimated rupee return of the stock is given as follows:
Economy’s Behaviour
High Growth Low Growth Stagnation Recession
Probability 0.45 0.25 0.2 0.1
Return on B1 90 98 106 122
Return on B2 120 104 72 48
Calculate the expected return and risk in the following cases:
1. When you invested 5000 in B1
2. When you invested 5000 in B2 Write down your preferences.
3. There is an ongoing debate regarding the fundamental analysis and technical analysis. One school of thought supports fundamental analysis, while the other school supports that stock market cannot work effectively without technical analysis” these statements have raised a confusion among the investors.
a. As a security analyst how do you effectively explain the difference between fundamental and technical analysis to the investors.
b. Do you prefer one analysis over the other? Give reasons for your choice.
Corporate Finance
1. Refer the published Balance Sheet of any listed Company. Identify its sources of funds. Explain any 4 in brief. (Balance Sheet need not to be copied or pasted in the answer) Compare and rank the sources identified with respect to their cost to the company (high, low). Discuss your observation.
2. M/s Priya Industries Ltd. is evaluating 2 options of investments. Each one has the following mentioned Cash Flows.
Evaluate the projects using: i) Pay-back period
ii) NPV
iii) IRR
(Show the calculations for each method.)
Which option you as the Chief Finance Officer of the Company would you select? Give reasons. A B 0 -40000 -50000 1 5000 8500 12000 15000 10000 12000 4 12500 12300 5 10500 10500
3. a. Sunil is valuating 2 investment proposals:
i) Invest Rs. 3 lacs for 5 years earn an interest of 8% compounded quarterly.
ii) Investment of Rs. 20,000 per year for 5 years @ 10% compounded quarterly.
Which option should he go for and why?
3. b. Sanjana has a debenture of Par-value Rs. 100/- @ 6%. Calculate its current yield if:
i) Market Price is Rs. 98.20
ii) Market Price is Rs. 102.00
What inference can you draw from this about the relation between Market price and yield?
Cost & Management Accounting
1. The data shown below relate to an industrial organization that manufactures household appliances.
Standard quantity required of materials item 0009 1 kg.
Standard price per kg. ₹ 10
Product in a month appliances 100 kgs.
Actual quantity of materials used 98 kgs.
Actual price paid ₹ 11/kg
The following calculations for variances have been made:
Material usage variance = 2 kgs. @ ₹ 11 = ₹ 22
Material price variance = 100 kgs. × ₹ 1 = ₹ 100 Do you agree with these calculations? If not, provide a correct calculation for the variances.
2. ABC Ltd. started a factory in Kolkata on 1st April, 2021. Following details are furnished about its activity during the year ended 31st March 2022.
Raw Material consumed – 40,000 units @ ₹7 per unit.
Direct Wages:
Skilled worker – ₹9 per unit.
Unskilled worker – ₹6 per unit.
Royalty (on raw material consumed) @ ₹3 per unit.
Works overheads @ ₹8 per machine hour.
Machine Hours Worked 25,000.
Office Overheads at 1/3rd of works cost.
Sales Commission @ ₹4 per unit.
Units produced 40,000
Stock of units at the end 4,000 units, to be valued at cost of production per unit.
Sale price is ₹60 per unit.
Prepare Cost sheet showing the various elements of cost.
3. a. What are the implications of Economic Order Quantity in proper inventory management?
3. b X Ltd. estimates its carrying cost at 15% and its ordering cost at ₹9 per order. The estimated annual requirement is 48,000 units at a price of ₹4 per unit.
a) What is the most economical number of units to order?
b) How many orders should be placed in a year?
c) How often should an order be placed?
Marketing of Financial Services
1. Explain the concept of Online Marketing of financial services. How is it changing the way are
2. One of your clients wants to apply for a Home Loan in the next 12 to 18 months. Few months back the client had lost his job and delayed his car loan repayments. The client is worried that this may impact his credit score maintained by Credit Bureaus. Suggest a roadmap to your client to improve his credit score.
3. You are a Financial Planner. Your clients Ameet (aged 33 years) and Supriya (aged 31 years), have a daughter Rima (aged 3 years) require your help to make few financial decisions. (You can make any assumptions to further build up your case.)
a. Ameet wants to buy a Life Insurance cover within a limited budget. He is confused whether he should buy a ULIP or a Term Plan. Recommend the product best suited for him giving valid reasons.
b. Ameet and Supriya want to invest for their daughter Rima’s higher education for the long term (over 15 to 17 years). They want to know whether they should make lump sum equity mutual fund investments or invest in SIPs of Equity MFs.
Strategic Cost Management
1. The following information is available for a pen making business. Calculate the following:
a) Contribution Ratio (in no. of units and value)
e) Number of pens to be sold to get a profit of Rs. 20,000/Sales Price of the pen Rs. 100/- each Cost of refill Rs. 10/- per refill. Ink cost Rs. 5 per ml. 2 ml of Ink is required for each pen.
Ball bearings Rs. 3 per bearing Sticker on the pen Rs. 2 per sticker.
Fixed Costs Rs. 6,00,000 p.a.
2. Select the Financial Statements (Balance sheet / Profit & Loss) of any listed Company. Explain the use of and calculate any 5 ratios. Analyse.
3. a. Explain what is meant by product mix analysis. What are the considerations to make product mix decisions.
3. b. Sanjay is the owner of SSR Pvt. Ltd. He needs to item ‘A’ for his business. He can buy the item at Rs. 50/- per piece. Alternatively, he can produce it in-house. His accountant produces an estimate of the costs of production for the item. Basis that he advises Sanjay not to produce the item in-house as it was costlier. Comment on whether the accountant is right or not. Support with analysis.
Direct Material Cost Rs. 20 per unit
Direct Labour Rs. 10 per unit
Power cost Rs. 5 per unit
Rent of factory allocated to Item A Rs. 18 per unit
Depreciation of Plant used for manufacturing A Rs. 6 per unit.
Taxation - Direct and Indirect
1. For the purpose of charging taxes, the Indian Income Tax Act, 1961 has identified and defined the specific heads of income. The charging sections of each head defines the scope of income to be charged under each head. Discuss precisely all the heads of income as mentioned under the Income Tax Act 1961.
2. GST N is a non-government body. This body handles the IT system of the GST Portal. Discuss the functions discharged by the GSTN in details.
3. Mrs Meera purchased a residential house property on August 6, 2019for R 30 lakhs. She made certain capital expenditure for the house in the month of January 2020 for Rs2 lakhs. She disposed off the property in April 2021, for Rs 40Lakhs.
a. Discuss about the exemption available under section 54.
b. Considering Section 54, Discuss the amount of exemption if any, amount of type of capital gain taxable in the hands of Mrs. Meera if she purchased another property from the sales proceed in the month of May 2021.