IMT-GHAZIABAD

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Management Programme

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IMT- 09

SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT

SECTION – A

1.      Define the term ‘investment’ as it relates to securities investments.

2.      How do operations on a stock exchange affect the economic life of a nation?

3.      Explain the term ‘New Issue Market’. How does it differ from the ‘secondary market’?

4.      What is meant by ‘listing of securities’? What are the advantages form the point of view of a company?

5.      What is a market index? Outline its utility for security analysis.

SECTION – B

1.      Why it is said IPOs are underpriced compared to the price at which they could be marketed?

2.      What are the main determinants of the level of interest rates (real and nominal rates)?

3.      How do we compute expected return, variance and standard deviation using time series of historical (past) rates of return?

4.      Describe the main differences in the historical performance of returns on equity and long-term bonds.

5.      Describe how we measure risk with non-normal distributions. What is the meaning of the term “fair game”?

SECTION – C

1.      Explain the capital allocation choice across risky and risk-free portfolios.

2.      Explain the simplifying assumptions of the basic version of CAPM.

3.      Explain the trade-off between liquidity and expected returns.

4.      Explain the role of diversification in eliminating the portfolio risk.

5.      Explain the role of Security Market Line (SML).

CASE STUDY – 1

Case A

Consider a risky portfolio. The end-of-year cash flow derived from the portfolio will be either $50,000 or $150,000 with equal probabilities of .5. The alternative risk-free investment in T-bills pays 5 percent per year.

a)      If you require a risk premium of 10 percent, how much will you be willing to pay for the portfolio?

b)     Suppose that the portfolio can be purchased for the amount you found in.

a.      What will be the expected rate of return on the portfolio?

c)      Now, suppose that you require a risk premium of 15 percent. What is the price that you will be willing to pay?

d)     Comparing your answers to (a) and (c), what do you conclude about the relationship between the required risk premium on a portfolio and the price at which the portfolio will sell?

CASE STUDY – 2

Consider the limit-order book depicted in Table below. The last trade in the stock took place at a price of $50.

Limit – buy order		Limit – sell order
Price ($)	Shares	Price ($)	Shares
49.75	500	50.25	100
49.50	800	51.50	100
49.25	500	54.75	300
49.00	200	58.25	100
48.50	600

a.      If a market-buy order for 100 shares comes in, at what price will it be filled?

b.      At what price would the next market-buy order be filled?

c.       If you were the specialist, would you desire to increase or decrease your inventory of this stock?

IMT- 49

BUSINESS ETHICS

SECTION – A

1.      Write a note on Ethical Heritage of India and their relevance to modern management.

2.      How did Buddhist and Jain Philosophies influence the thoughts and actions of Mahatma Gandhi.

SECTION – B

1.      What are the professional ethics and professional misconduct of the Chartered Accountants as defined by the Institute of Chartered Accountants of India?

2.      What are the ethical questions involved in commercial advertising broadcast through the electronic media? What is the best method of control of commercial advertising?

SECTION – C

1.      What are the economic, legal, ethical and discretionary responsibilities (CSR) which should be discharged by a responsible Company/ Corporation?

2.      What are the steps Government of India has taken to make CSR a compulsory legal responsibility for all Companies/Corporations in India?

CASE STUDY – 1

Political Corruption in India

Government has been jolted by controversy over licences and radio airwaves that the CAG of India) says were given out too cheaply, depriving the government of up to $39 billion in revenues. The telecom minister, A Raja was forced to resign and the Prime Minister Dr Manmohan Singh has been asked to explain himself to the Supreme Court. Opposition parties want a full parliamentary probe and have blocked proceedings until the government relents.

So, what is the controversy all about and what does it mean for the telecom sector and companies?

In 2008, the country issued 122 new telecom licences and the second-generation radio spectrum bundled with it to several domestic companies that had little or no experience in the telecom sector, and at a price set in 2001.

The national Auditor General said that the allocation process did not reflect the correct value of radio spectrum as there was no auction and the entire process was flawed, benefiting selected companies.

The Auditor General said that the telecom ministry did not do the requisite due diligence, granting 85 out of the 122 licences to ineligible applicants.

The auditor also said the ministry did not follow its own guidelines, changed the cut-off date for applications, which gave "unfair advantage" to some companies over others. It said that the entire process "lacked transparency and was undertaken in an arbitrary, unfair and inequitable manner".

The auditor said that several companies deliberately suppressed facts, disclosed incomplete information, submitted fictitious documents and used fraudulent means to get licences and thereby access to spectrum.

The auditor said that units of Unitech Ltd, which received licences in 2008 and now operates services in a joint venture with Norway's Telenor, had not fulfilled eligibility conditions including required share capital.

Other firms which were ineligible according to the auditor include Loop Telecom, Videocon Telecommunications and S Tel Ltd. The auditor said that Swan Telecom, which has since been partly acquired by the UAE's Etisalat , was given licences even though a unit of No. 2 telecoms firm Reliance Communications held over 10% of equity, a violation of rules.

It is still too early to know whether any licences would be cancelled, but the pressure would be strong not to do so because operators have invested in networks and have subscribers.

Any big crackdown could send a wrong signal to investors.

But the government could ask operators to compensate for the potential revenue loss as highlighted by the auditor and may impose fines for not meeting separate rollout obligations.

The Auditor General also named nine other operators, including market leaders Bharti Airtel , Reliance Comm and Vodafone, who were allotted spectrum beyond the contracted limit without paying any upfront charges, costing the government a potential $8 billion.

Questions:

Question 1:  How many Telecom licenses were issued and how many were found ineligible?

Question 2: What was the potential loss of revenue to the nation? How did the CAG of India calculate the loss?

Question 3: Explain with examples the various kinds of ‘white collar crime’. How does this case fall under the category of white collar crime?

Question 4: How did these companies violate the principles of Business Ethics and Corporate Social Responsibility?

IMT- 86

INTERNATIONAL FINANCIAL MANAGEMENT

SECTION – A

1.      What kind of finances are available from foreign sources? Explain in detail the role of various institutions providing foreign finance?

2.      Exchange rate                        Type               Period                         Conversion rate

a. CAN $ to USD                         SPOT              Today                         1.0401

b. CAN $ to USD                        FORWARD   3 months         1.0329

c. Six months interest rate

d. USD                              9% P.A,

e. CAN$                           6% P.A.

3.      Discuss about the following in detail with example.

a. Forward contract

b. Future contract

4.      Explain how an Indian company can make investments abroad on fast track.

5.      What are the ‘Rule’ requirements for a company to get listed on NASDAQ?

SECTION – B

1.      Give the status of forex market in the present era.

2.      A US MNC has its subsidiary in India. 10% preference shares of the face value of Rs. 50 have been issued by the subsidiary, to be redeemed at year end 8. Flotation costs are expected to be 4%. These costs can be amortized for tax purpose during the 8 years at a uniform rate. The corporate tax rate is 35%. Determine the cost of preference shares from the perspective of the subsidiary.

3.      Why was the fixed rate system was replaced by the floating exchange rate system?

4.      Assessing and managing risk is a complex and critical task for international projects. Risks in terms of international projects can be categorized into the following. Discuss.

5.      What is the difficulty in extending the domestic CAPM to world environment?

SECTION – C

1.      Briefly outline the measure to avoid double taxation.

2.      What is country risk? Discuss its elements.

3.      Should international firms require higher rates of return on foreign projects than identical projects at home? Comment.

4.      What is a foreign exchange market? Explain the functions of a foreign exchange market.

5.      One French franc could be purchased in the foreign exchange market for 21 US cents today. If the Franc appreciated 10% tomorrow against the dollar, how many Francs would a dollar buy tomorrow?

CASE STUDY – 1

1.      The current value of the S & P 500 index is $ 1000. The value of portfolio is $5 million. Beta of portfolio is 1.5. One futures contract is for delivery of $ 250 times the index.

a) What position in futures contracts on the S & P 500 is necessary to hedge the portfolio?

b) Use the data for the value of the index and the future price of in the index, both 3 months aheads, to assess the performance of the stock index hedge by recording the gain on the futures position, the return on the market, the expected return on the portfolio, the expected portfolio value in 3 months ( including dividends) and the total expected value of the position in 3 months .

Scenario	Value for index futures	Price of index
1	900	902
2	950	952
3	1000	1003
4	1050	1053
5	1100	1103

The current futures price is $ 1010. The dividends rate on the index is 1% per annum. The risk-free rate is 4% per annum.

CASE STUDY – 2

Suppose a subsidiary of America currently has an annual sale of $ 50,00,000 with 45 days credit terms. The sales of the subsidiary can be increased by 6% or $ 3,00,000 if the company relaxes its credit period to 120 days. With this extension in sales, the cost of goods sold is $ 1,00,000. Monthly credit expenses of the subsidiary are 1% in financing charges. The dollar is expected to decrease in value on an average of 0.5% every 30 days. If the currency change is not considered then calculate the total financing cost.

IMT- 87

RISK MANAGEMENT

SECTION – A

Question 1: (a) Explain the principles of risk management. Also explain the limitations of risk management.

(b) Explain the difference between credit risk and the market risk in a financial contract.

(c) Explain why a bank is subject to credit risk when it enters into two offsetting swap contracts.

(d) Describe briefly some strategies for controlling interest rate risk.

(e) What do you understand by Interest rate risk? What are its sources and also explain the broad categories of interest rate risk.

SECTION – B

Question 2: (a) How the options and futures can be used as hedging vehicle? How basis risk replaces the price risk by hedging? Explain.

(b) How is a call option different from Put option? What do you mean by exercising an option?

(c) Critically examine, “buying a call option is risky because the holder commits to purchase a share at a later date.”

(d) What do you mean by options strategies? Explain how different strategies can be used as a risk management tool. Give suitable examples.

(e) What do you mean by Strangle? Is it possible to make profits irrespective of increase or decrease in prices of an underlying asset?

SECTION – C

Question 3: (a) What are different type of currency Derivatives? What are its uses under foreign exchange risk management?

(b) What do you mean by Foreign Exchange risk and what are the tools to manage foreign exchange risk?

(c) What do you mean by Hedge Ratio?

(d) Explain how a total return swap can be used as a financing tool?

(e) Explain: Liquidity risk

CASE STUDY – 1

An investor can use different Option strategies for Risk management. Given below are some of the strategies being contemplated by a person. You are required to calculate

(i) Risk neutral position

(ii) Maximum pay off and

(iii) Maximum Loss under each strategy:

(a) Mr. XYZ is bullish about ABC Ltd stock. He buys ABC Ltd. at current market price of Rs. 4800 on 4th July. To protect against fall in the price of ABC Ltd. , he buys an ABC Ltd. put option with a strike price Rs. 4500 (OTM) at a premium of Rs. 100 expiring on 31st July.

(b) Mr. XYZ is bearish on Nifty; When the Nifty is at 4894. He buys a put option with a strike price of Rs. 4700 at a premium of Rs. 50, expiring on 31st August.

(c) Mr. XYZ is bullish on Nifty when it is at 4180. He sells a put option with a strike price of Rs. 4400 at a premium of Rs. 120 expiring on 31st July.

(d) Nifty is at 4850 on 27th April. An investor, Mr. A enters a long straddle by buying a May Rs. 4900 Nifty put for Rs. 85 and a May Rs. 4900 Nifty call for Rs. 122.

(e) Suppose Nifty is at 4500 in May. An investor, Mr. A, executes a short strangle by selling a Rs. 4300 Nifty put for a premium of Rs. 23 and a Rs. 4700 Nifty call for Rs. 43.

CASE STUDY – 2

X Ltd Canada and Y Ltd of U.S. have approached a swap dealer to arrange a currency swap for them. Interest rate in U.S. and Canada for fixed rate borrowing and floating rate borrowing are:

	US$	CANADA $
X Ltd.	LIBOR +1%	6%
Y Ltd.	LIBOR +1.5%	7.5%

X Ltd wants to borrow US $ at floating Rate while Y Ltd wants to borrow Canada $ at fixed rate. A Swap dealer has agreed to arrange a swap for them for a consideration of .5% spread. Design a swap in which both the companies i.e. X Ltd and Y Ltd. are equally benefited. Also show the related cash flow position of the transaction.

IMT-136

FINANCIAL MARKETS INSTITUTIONS AND SERVICES

SECTION – A

1.      Explain the process of capital formation.

2.      Give detailed chart depicting Organization of the Financial System in India.

3.      Give differences and similarities between New Issue Market and Stock Exchanges in tabular format.

4.      Give detailed chart depicting Money Market Organization in India.

5.      Distinguish between CP and CD as understood under Indian Money market.

SECTION – B

1.      List the ways by new Issues are brought into the market. Explain any one of them in detail.

2.      Give detailed chart depicting Regulatory Framework of Securities Market in India.

3.      Who or what is SEBI? List 5 of its powers and functions.

4.      Write a note on Buyback of securities.

5.      Write a note on primary market intermediaries in India.

SECTION – C

1.       Write a detailed on Depository System in India. Remember to give relevant figures/diagrams

2.       Write a note on Forward Contracts .

3.       Who are venture capitalists? What do they do?

4.       What are NBFCs? Why are they important for an economy.

5.       Write a note on FDI.

CASE STUDY – 1

1.      Sequia Investments Pvt Ltd is an American investment company. It wants to invest $1 Trillion in Indian Economy. Suggest it how should it invest. Give your answer by providing various financial markets, institutions and services it should avail for maximum profit.

CASE STUDY – 2

2.      Ajay has got a new job in which his monthly take home is Rs.75,000/- He wants to invest in Mutual Funds. You are an expert at mutual fund industry. Explain him what are Mutual Funds and how they work and how will it be beneficial to him.

IMT-142

STRATEGIC FINANCIAL MANAGEMENT

SECTION – A

Question 1: What are the critical factors to be observed while making capital budgeting decisions under capital rationing?

Question 2: The Moon Ltd. is examining two mutually exclusive proposals. The management of the company uses certainty equivalent (CE) approach to evaluate new investment proposals. From the following information pertaining to these projects, advise the company as to which project should be taken up.

	Proposal A		Proposal B
Year	Cash flow after taxes	CE	Cash flow after taxes	CE
0	(25000)	1.0	(25000)	1.0
1	15000	.8	9000	.9
2	15000	.7	18000	.8
3	15000	.6	12000	.7
4	15000	.5	16000	.4

Question 3: What is the indifference point and why is it so called? What is its usefulness?

Question 4: The following particulars are available in respect of corporate:

1.      Capital employed Rs 500 million

2.      Operating profits after taxes for the last three years are :Rs 80 million, Rs 100 million and Rs 90 million.

3.      Riskless rate of return 10%

4.      Risk premium relevant to business 5 %.

You are required to calculate the value of goodwill, based on the present value of super profit method. Super profits are to be computed on the basis of the average profits of 4 years. It is expected that the firm is likely to earn super profits for the next 5 years only.

Question 5: What synergies exist in:

a) Horizontal mergers

b) Vertical Mergers

c) Conglomerate mergers

SECTION – B

Question 1: A machine purchased four years ago has been depreciated to its current book value of Rs 50,000. The machine originally had a projected life of 10 years and zero salvage value. A new machine will cost Rs 80,000. Its installation cost estimated by the technician is Rs 20,000. The technician also estimates that the installation of the new machine will result in a reduced operating cost of Rs 30,000 per year for the next 6 years. The old machine would be sold for Rs 20,000. The new machine will have a 6 year life with no salvage value. The company’s income is taxed at 35%. Determine whether existing machine should be replaced, if cost of capital 10%. Depreciation is at straight line basis.

Question 2: What is the sensitivity approach for dealing with the project risk? What is one of the most common methods used to evaluate projects using sensitivity analysis?

Question 3: Distinguish between

·         Gross working capital and net working capital.

·         Permanent and temporary working capital.

Question 4: Following information is available in respect of a trading firm:

·         On an average, debtors are collected after 45 days; inventories have an average holding period of 75 days and creditor’s payment period on an average is 30 days.

·         The firm spends a total of Rs 120 lakh annually at a constant rate.

·         It can earn 10% on investments.

From the above information compute:

a) Cash cycle and cash turnover.

b) Minimum amount of cash required to meet the payment obligations.

c) Savings by reducing the average inventory holding period by 30 days.

Question 5: What is credit standards? What key variables should be considered in evaluating possible changes in credit standards?

SECTION - C

Question 1: From the following data determine the EOQ

·         Annual requirement, 12,00,000 units .

·         Purchase Price Rs 3 per unit.

·         Ordering cost Rs 50 per order.

·         Carrying cost of inventory, 10% of the cost.

Question 2: What are the features of trade credit as a short term source of working capital finance? How can the cost of trade credit be calculated?

Question 3: A call option at a strike price of Rs 170 is selling at a premium of Rs 15. At what share price on maturity will it break even for the buyer of the option? Will the writer of the option also break even at the same price?

Question 4: Explain and illustrate the option pay off.

Question 5: A proforma cost sheet of a company provides the following particulars:

	Amount (Rs.)
Raw material	80
Direct labour	30
Overheads	60
Total cost	170
Profit	30
Selling price	200

The following particulars are available:

Raw material in stock, on average one month; material in process, on average half a month; finished goods in stock, on average one month. Credit allowed by suppliers is one month, credit allowed to debtors is two months, lag in payment of wages is one and a half weeks, lag in payment of overhead expenses is one month; one fourth of the output is sold against cash; cash at bank is expected to be Rs 25000. You are required to prepare a statement showing the working capital needed to finance a level of activity of 1,04,000 units of production. Assume that production is carried out during the year evenly.

CASE STUDY – 1

Bose Engineering has had a very poor bad debt record and, for this reason it has devised the method of credit control based on analyses of its debt experience and of the personal characteristics of its customers. It is ascertained its good and bad debt experiences from a sample of actual orders executed. It ranked its customers using a points system from 0 to 100, where 0 denoted a class of customers with the highest percentage of bad debts and 100 denoted a class with the highest percentage of good debts. These analysis led to the preparation of following tables:

Point ratings	Cumulative total no. Of orders received	Cumulative no. Of orders received which turn out to be good debts	Cumulative no. Of orders received which turn out to be bad debts
0 – 10	1150	200	950
0 – 20	2100	450	1650
0 – 30	2850	750	2100
0 – 40	3950	1500	2450
0 – 50	6600	4000	2600
0 – 60	8150	5400	2750
0 – 70	9100	6250	2850
0 – 80	9500	6600	2900
0 – 90	9750	6800	2950
0 – 100	10000	7000	3000

The table shows, cumulatively, an analysis of the customers by class and an analysis of good & bad debts within each class per 10,000 orders received.

During 2005, the company rejected all orders from customers with a credit rating of 50 and below with the result that a sample profit and loss account, based on the table of 10,000 orders received, appeared as follows:

Sales (3400 orders @ Rs 14/- per order)                                         47600

Variable Costs:

Purchases 3400 @ Rs 3/-                              10200

Distribution 3400 @ Rs 2/-                           6800                            17000

30600

Overheads:

Administration & Selling Expenses                         18200

Bad Debts @ Rs14/-                                      5600                            23800

6800

Assume that administration and selling expenses remaining constant

a) Apply the 2005 prices and costs to the statistical table to show cumulatively for the first five classes of customers the effect on profits of declining to accept orders in each class. Present your answer in columnar form in terms of contributions to overheads and profit lost, costs saved and the total gain or loss.

b) Prepare a sample profit and loss account, similar to that shown and based on 10000 orders received, assuming that all orders from customers with a credit rating of 20 and below are rejected.

CASE STUDY – 2

A ltd is considering takeover of B Ltd and C Ltd. The financial data for the three companies are as follows:

Particulars	A Ltd.	B Ltd.	C Ltd.
Equity share capital of Rs. 10 each (Rs./million)	450	180	90
Earnings (Rs./million)	90	18	18
Market price of each shares (Rs.)	60	37	46

Calculate the:

a. Price-Earnings exchange ratios.

b. Earnings per Share of A Ltd after the acquisition of B Ltd and C Ltd separately.

c. Will you recommend the merger of either/both of the companies? Justify your answer.

IMT-58 – MANAGEMENT ACCOUNTING

SECTION – A

Q1. Distinguish between Management accounting and Financial Accounting.

Q2. What are the methods by which semi variable cost can be split in its fixed and variable elements?

Q3. Medical aid co. manufactures a special product “AID”. The following particulars were collected for the year

1998:

Monthly demand of AID                   1,000 units

Cost of placing an order                     Rs. 100

Annual carrying cost per unit              Rs 15

Normal usage                                      50 units per week

Minimum usage                                   25 units per weed

maximum usage                                  75 units per week

re-order usage                                                 4 to 6 week

Compute from the above :

a. re-order quantity

b. re-order level

c. minimum level

d. maximum level

Q4. What do you understand by JIT?

Q5. Explain the term administrative overheads and briefly discuss three methods of treatment thereof in cost accounts.

SECTION – B

Q1. How does ABC differ from the traditional costing approach?

Q2. What is service costing? Describe the type of industries in which such a system would be suitable.

Q3. Calculate the cost of each process and total cost production from the data given below:

Process x                     Process Y                    Process Z

Materials                                             2,250                           750                              300

Labour                                                 1,200                           3,000                           900

Direct Expenses:

Fuel                                                     300                              200                              400

Carriage                                               200                              300                              100

Work overhead                                   1,890                           2,580                           1,875

The indirect expenses Rs. 1,275 should be apportioned on the basis of wages.

Q4. What are the advantages of variable costing?

Q5. What do you mean by break-even analysis and explain its uses and applications?

SECTION - C

Q1. Explain advantages and limitations of budgeting.

Q2. What is transfer prices? What are different types of transfer prices?

Q3. Define expense centre. What is the suitability of the measure of performance in an expense centre?

Q4. Differentiate between ‘sunk’ and ‘avoidable’ costs. What is the relevance of such a distinction for short-run decisions?

Q5. The details regarding composition and the weekly wage rate of labour force engaged on a job scheduled to be completed in 30 weeks are as follows:

Standard                                 Actual

Category of                                         No. of Weekly wage               No. of Weekly wage

Workers                                               Laborers          Rate                 Laborers          Rate

Skilled                                                 75                    60                    70                    70

Semi-skilled                                        45                    40                    30                    50

Unskilled                                             60                    30                    80                    20

The work is actually completed in 32 weeks. Calculate the various labour cost variances.

CASE STUDY – 1

A Ltd. furnishes the following data relating to the year 2008.

1st half of the year                              2nd half of the year

Sales (Rs.)                               45,000                                                 50,000

Total cost (Rs.)                        40,000                                                 43,000

Assuming that there is no change in prices and variable cost and that the fixed expenses are incurred equally in the two half year period, calculate-

1. P/V Ratio

2. Fixed expenses

3. Break even sales

4. Percentage of margin of safety to total sales.

CASE STUDY - 2

Goodluck Ltd. is currently operating at 75% of its capacity. In the past two years, the level of operations were 5f5% and 65% respectively. Presently, the production is 75,000 units. The company is planning for 85% capacity level during 2013 – 2014. The cost details are as follows:

55%                 65%                 75%

Rs.                   Rs.                   Rs.

Direct Materials                                              11,00,000        13,00,000        15,00,000

Direct labour                                                   5,50,000          6,50,000          7,50,000

factory overheads                                           2,00,000          2,00,000          2,00,000

Selling overheads                                            3,10,000          3,30,000          3,50,000

Administrative overheads                               3,20,000          3,60,000          4,00,000

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

24,40,000        28,00,000        31,60,000

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

Profit is estimated @ 20% on sales.

The following increases in costs are expected during the year.

In percentage

Direct material                        8

Direct labour                           5

Variable selling overheads      8

Fixed factory overheads         10

Fixed selling overheads          15

Administrative overheads       10

Required: Prepare flexible budget for the period 20X1 – 20X2 at 85% level of capacity. Also ascertain profit and contribution

IMT- 79

ECONOMIC ENVIRONMENT OF INDIA

SECTION - A

1.   How many Five - Year Plans India has embarked upon? Write a note on the contribution made by the Planning Commission towards making India an economic power-house.

2.    What are the different aspects of social and economic environment? How are they influenced by the Political environment?

SECTION - B

1.    Trace the evolution of   Industrial Policy of India scanning through the various Industrial Policy Resolutions from 1948 to 1991.

2.    The Nehruvian Socialism was jettisoned by the Industrial Policy Resolution,1991  – comment. What had been the immediate impact of the Liberalization Policy launched in 1991?

 SECTION - C

1.    Write a critical note on the performance of the Central Public Sector Undertakings since 1956.

2.    What have been the concrete contributions of the IMF and the World Bank in boosting India’s GDP growth?

CASE STUDY - 1

India will be $2tn economy by 20014-15 India will be a $2 trillion economy  in the next five years as its GDP growth is likely to average at 12% in nominal terms, powered by a huge consumption demand, Enam Securities has said.

“ India’s GDP is likely to grow at (an) average 12% in nominal terms. Hence, India will be a $2-trillion economy by 2014-15,”  Enam Securities head research, Nandan Chakraborty and economist   Sachchidanand Shukla said in a report titled “ India Strategy”.

At present, India is a $1 trillion economy. This growth will be led by the huge consumption demand in sectors   like FMCG, power , auto, (small car hub ) IT and pharmacy. The brokerage firm said   insurance companies, financial services, and equity markets will flourish as the country’s annual savings pool grows to $700 billion from $400 billion at present.

According to a report by   consultancy   Global Construction Perspectives and economic forecasting   firm Oxford Economics, the global construction market would be worth an estimated $12 trillion in 2020 from about $7.5 trillion at present.

“ Construction in major emerging markets such as India and China will see a much higher levels of growth than developed  countries by 2020.Growth in construction output in India will accelerate faster than China up to 2020, but we expect growth in GDP to be higher in China,” the Global Construction 2020 report said.

Questions:

Q1.What is GDP and how is it calculated? What was the average GDP growth rate during the year 2012-13? 

Q2.What is consumption demand?

Q3.Which sector is likely to grow at a faster rate?

Q4. What is the composition of the Construction market and what is its present worth?

IMT-56 STRATEGIC MANAGEMENT

SECTION - A

1.    Define strategy, What are the common elements in successful strategy.

2.    Explain the multiple roles of strategy in a business firm.

3.      Describe Value; does it have an importance in strategic business decisions?

4.    Explain the meaning of profits, what are the main determentsof industry profit?

5.      Describe the role of organizational capabilities in strategy formulation.

SECTION - B

1.  Identify the circumstances in which a firm can create a competitive advantage over a rival.

2.  What do you understand by the word Innovation, what mechanisms are effective in protecting innovations .

3.  Define vertical integration, what are the different types of vertical relationships.

4.  Explain the benefits of a global strategy for a multinational corporation,

5.  What is diversification;explain the various types of diversification.

SECTION - C

  

1.  Describe a multibusiness firm, what are the problems these firms face in strategy implementation.

2.  What do you understand by the external environment, how does it help in building up a firms strategy   .

3.  The economic world is dynamic, how does a company manage in economic crisis.

4.  Costs have a strong implication in having a competitive advantage do you agree with this statement , what are the sources of cost advantage   .

5.  Explain differentiation, what advantages does a firm accrue in differentiation.

CASE STUDY - 1

ON 15 September 2008 investment bank giant filed for bankruptcy sending shock waves 

across the world markets that were already reeling from shocks in the wake of global economci melt down.

With more book assets and lesser book debts, Lehman’s bankruptcy filing was the largest in the banking history their assets far surpassed those of previous bankrupt giants such as World com and Enron, at the time of collapse with more than 25000 employees world wide . Lehman’s demise also made it the largest victim of the US subprime mortgage induced financial crisis that swept through global financial markets in the world  .

Record revenues from Lehman’s real estate business enabled revenues ni the capital market unit to surge 56% between 2004 to 2006 .This was considered a faster rate of growth than any other business in investment banking .

In February 2006 the company’s stock reached a record high giving Lehman a market capitalization of around 25 billion, however the US housing market were already becoming apparent as defaults in subprime mortgage. Lehman’s high degree of leverage the ratio of total assets to share holder’s assets to share holder’s equity was good and its huge portfolio of mortgage security made it vulnerable to deteriorating market conditions. In June 2008 Lehman announced its first second quarter loss and raised money from American Express to cover the same.

However the measures were perceived as being too little, too late over the summer Lehman’s management made unsuccessful attempts to a number of potential partners, hopes of the Korea Development bank would take a stake in Lehman was dashed in 9 September and the state owned Korean bank put talks on hold.

On Monday 15 September Lehman declared bankruptcy resulting in creating a global financial crisis.

Questions

1  what were the reasons for Lehman brothers bankruptcy?

2  what lessons would you learn from the Lehman brothers bankruptcy?

CASE STUDY - 2

TATA  NANO

Tata motors have been eyeing the Indian passenger market for a long time. During earlier times, their brands such as Tata Sumo were well received;  the company had a very low share in the Indian passenger car market due to stiff competition from Maruti  .

Tata motors came up with Tata Indica , which mirrored Maruti’s products and challenged Maruti’s dominance in small car market . Inspired by the success of Indica Tata launched the Tata Nano . Critics were of the view it could not be possible due to the low cost of the car.

Tata Nano’s modular design is one of the most innovative aspects, it can be shipped separately and assembled in any region.

However the fanfare with which Nano was launched did not show much result, the car was not well accepted by the masses despite the low prices, it started selling in discounts like any other car in the Indian market.

Tata’s as a company are concerned about the same and are still trying to rework out strategies for revival of the market share and to fit into the vision of the com pany.

Questions

Q1 What was the type of strategy Tata’s adopted during the launch of Nano.

Q2 pl help the company in working out a suitable strategy for the success of the car. 

Q3 by using a SWOT analysis outline the failure of the car in the Indian markets.

Q4 what in your opinion is the future of such cars in Indian markets  .

 IMT- 24 QUANTITATIVE TECHNIQUE

SECTION - A

   

What are the component of a time series?

2.    Assume that the factory has two machines. Past records show that Machine 1 produces 30 per cent of the output. 5 percent of the items produced by the Machine 1 were defective and only  1 per cent produced by Machine 2 were defective .If an item selected at random is found to be defective, what is the probability that it was produced by Machine 2.

3.    Gati India Ltd. Maintains Kilometer records on all of its rolling equipment . Here are weekly kilometer records of its trucks.

810	450	756	789	210	657	589	488	876	689
1450	560	469	890	987	559	788	943	447	775

A)  Calculate the median kilometer a truck travelled.

B)  Calculate the mean for 20 truck.

C)  Compare part (a) and part (b) and explain which one is better measure of central tendency of the data.

4.    . Calculate correlation coefficient   from the following results: n=10 ; ? X=140;? Y=150

?(X-10)2=180;  (Y-180)2=215

?(X-10)(Y-15)=60

5.    ABC Builders is engaged in the construction of a multistory building. It has recently conducted a cost audit. The manger ( cost accounting)  has collected the figures of the total cost and its major constituents.  The information collected as percentage of expenditure is shown below. Represent the Data with the help of a suitable diagram.

SECTION - B

.  a)  Prove:  P(A/B) >P(A),

Then  P(B/A)>P(B)

2.        What is the probability   of obtaining two heads in two throws of a single coin.

3.    The two regression coefficients byx and bxy are either both be positive or  both be negative. Do you agree with this statement. If so why ?

4.    The equations of two regression lines obtained in a correlation  analysis are given below.

3x + 12y = 19 ; 3y + 9x = 46

obtain (i) the mean values

(ii) the value of correlation coefficient and (iii) the ratio s x /s y

5.    Differentiate between primary data and secondary data. Under what circumstances would secondary data be more useful than primary data .

SECTION - C

1.   Find arithmetic mean, median and mode from the following:

Marks below          10   20   30   40   50  60     70     80

No. of students       15   35   60   84  96  127  198  250

2.   A box contains 4 bad and 6 good transistors. Two are drawn out together. One of them is tested and found to be good. What is the probability that the other one is also good?

On a midterm exam, the scores were distributed normally with mean of 72 and standard deviation of 10. Student  Wright scored in the top 10 percent of the class on the midterm.

3.   Wirght’s midterm score was at least how much?

4.   The final exam also had a normal distribution, but with mean of 150 and standard deviation of 15. At least what score should Wright get in order to keep the same ranking (i.e , top 10 percent).

5.   What do you mean by trend analysis? Differentiate between secular trend and cyclic fluctuation.

CASE STUDY - 1

A restaurant manager has recorded the daily number of customers for the  last  four  weeks. He  wants  to improve customer service and change employee scheduling as far as necessary, based on the expected  number  of  daily customers in the feature. The following data represent the daily number of customers as recorded by the manager for the last four weeks.

weeks	mon	Tues	wed	thurs	fri	sat	sun
1	440	400	480	510	650	800	710
2	510	430	500	520	740	850	800
3	490	580	410	630	720	810	690
4	500	500	470	540	780	900	850

Determine the daily seasonal indices using the seven day moving average.

 CASE STUDY - 2

A batch of 5000 electric lamps have a mean life of 1000 hours and standard deviation of 75 hours. Assume a normal distribution.

a.    How many lamps will fail before 900 hours?

b.    How many lamps will fail between 950 and 1000 hours?

c.     What proportion of lamps will fail before 925 hours?

d.    Given the same mean life , what would the standard deviation have to be ensure that no more than 20% of lamps fail before 916 hours?

 IMT-12

HUMAN RESOURCE MANAGEMENT

SECTION - A

 1.    Bring out the paradoxes in HRM.

2.    Discuss the role of HRM in strategy evaluation.

3.    Define Job Analysis. What are its uses?

4.    Discuss the common interview problems.

5.    Explain  the  career  development  initiatives.

SECTION - B

1.    Bring out the salient features of the incentive schemes followed in Indian Industries.

2.    Describe the components of Executive Remuneration.

3.    Explain the various steps in the benefits administration.

4.    How is safety performance assessed?

5.    Bring out the principles of transfers.

SECTION - C

1.    Explain the different approaches to Industrial Relations.

2.    Explain the strategies and techniques adopted by the management to keep their plants union-free.

3.    What is arbitration?  How does it help resolve industrial conflict?

4.    Explain the typical  e-recruiting  model.

5.    What is reverse culture shock? How do MNCs cope with it?

Rita and Manoj are post graduates in Management under different streams from the same B-School. Both of them are close friends from the college days itself and the same friendship is continuing in the organisation too as they are placed in the same company,  Hi-tech Solutions. Rita placed in HR department as employee counselor and Manoj in Finance department as key finance executive. As per the grade is concerned both are at same level but when responsibility is concerned Manoj is holding more responsibility being in core finance.

By nature Rita is friendly in nature and ready to help the people who are in need. Manoj is an introvert, ready to help if approached  personally  and  is a bit egoistic in nature. They have  successfully completed 5 years in the organization.

The Management is very much satisfied with both of them as they are equally talented and constant performers.

Rita started noticing some behavioral  changes in Manoj and he is not like as he use to be in past.  During general conversations she feels that Manoj is taunting  her that she is popular among the employees in the organisation on the other hand he is not even recognised by fellow employees.

One morning Mr. Sharma General Manager Hi-tech Solutions received a shocking mail from Manoj about his resignation. Mr. Sharma called Rita immediately and discussed about the same as she is close friend of Manoj. By hearing the news Rita got stunned and said that she do not know this before she also revealed her current experience with him. Mr. Sharma who does not want to lose both of them promised her that he will handle this and he won’t allow Manoj to resign.

In the afternoon Mr. Sharma took Manoj to Canteen to make him comfortable after some general  discussion he  started on the issue. Manoj, after some hesitations opened his thinking in front of Mr. Sharma. The problem of Manoj   is 1) He don’t even get recognized by the people if he comes alone to the canteen but if he is accompanied by Rita he gets well treated by others. 2) one day both of them entered the company together the security in the gate wished  them but the next  day when he came alone the same security did not do so. 3) Even in meetings held in the office the points raised by Rita will get more value so many a times he keeps silent in the meeting.

This to him is quite degrading on each day of work and this is totally disturbing him. Manoj also questioned that both of them have same qualification and experience in this organisation. More over the responsibilities over him are more valuable than that of Rita. After all these things if he is being ignored or unrecognized by the fellow employees his ego does not allow him to continue here.

By listening  to him Mr. Sharma felt that it is not going to be very difficult to stop his resignation. Mr. Sharma explained Manoj the reasons for such partial behavior of the employees. After listening to Mr. Sharma, Manoj felt sorry for his reaction and ready to take back his resignation.

Question 

1.    Find the reason that Mr. Sharma would have given to Manoj.

The department of Social Services represents a large portion of a county’s budget and total 

number of employees. The job of eligibility technician si responsible for all client contact, policy interpretation, and financial decisions related to several forms of public aid (e.g., food stamps, aid to families with dependent children). Eligibility technicians must read a large number of memos and announcements of new and revised policies and procedures. Eligibility technicians were complaining they had difficulty reading and responding to this correspondence. The county decided to send the employees to a speed reading program costing $250 per person. The county  has 200 eligibility technicians.

Preliminary evaluation of the speed reading program was that trainees liked it. Two months after the training was conducted, the technicians told their managers that they were not using the speed reading course in their jobs, but were using it in leisure reading at home. When their managers asked why they weren’t using it on the job, the typical response was, “I never read those memos and policy announcements anyway.”

Questions:

a.    Evaluate the needs assessment process used to determine that speed reading was necessary. What was good about it? Where was it faulty?

b.    How would you have conducted the needs assessment?