Home | | Merchant Banking and Financial Services | Short Answers: Fee Based Management

Chapter: Business Science : Merchant Banking and Financial Services : Other Fee Based Management Introduction

Short Answers: Fee Based Management

Business Science - Merchant Banking and Financial Services - Other Fee Based Management Introduction




 

1.        Define merger.

 

A merger is a combination of two or more companies into one company. It may be in the form of one or more companies being merged into an existing company or a new company may be formed to merge two or more existing companies. The Income Tax Act, 19 61 of India uses the term „amalgamationformerger.

 

2.       Explain absorption.

 

A Combination of two or more companies into an existing company is known as „absorption‟. In a merger through absorption all companies except one go into liquidation and lose their separate id entities.

 

3. What is congeneric merger?

It occurs where two merging firms are in the same general industry, but they have to mutual buyer/customer or supplier relationship, such as a merger between a bank and a leasing company. For example Prudential‘s acquisition of Bache and Company.

4.       Who is a portfolio manager?

 

Portfolio manager means any person who pursuant to a contract or arrangement with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary portfolio manage r or otherwise) the management or administration of a portfolio of securities or the funds of the client, as the case may be.

 

5.       What is an underwritten deal?

 

An underwritten deal is one for which the arrangers guarantee the entire commitment, and then syndicate the loan. If the arrangers cannot fully subscribe the loan, they are forced to absorb the difference, which they may later try to sell to investors.

 

6.       What is novation?

 

An underwritten deal is one for which the arrangers guarantee the entire commitment, and then syndicate the loan. If the arrangers cannot fully subscribe the loan, they are forced to absorb the difference, which they may later try to sell to investors.

 

7.       Define credit rating.

 

Credit rating is an assessment of the credit worthiness of individuals and corporations. It is based upon the history of borrowing and repayment as well as the availability of assets and extent of liabilities. A credit rating tells a lender or investors the probability of the subject being able to pay back a loan.

 

8.       Expand CRISIL and ICRA.

 

CRISIL –Credit Rating Information Services of India Limited

 

ICRA –Investment Information and Credit Rating Agencies of India

 

9.       What do you understand by mutual fund?

 

A mutual fund is a professionally -managed form of collective investments that pools money from many investors and invests it in stocks, bonds, short -term money market instruments, and/or other securities. fund, the fund manager, who is also known as the portfolio manager, trades the funds underlying securities, realizing capital gains or losses, and collects the dividend or interest income.

 

10. Who are trustees?

 

Persons who hold the property of the mutual fund in trust for the benefit of the unit holders are called trustees. Trustees look after the mutual fund, which is constituted as a trust under the provisions of the Indian Trust Act.

 

11. What is meant by asset Management Company?

 

The investment manager of a mutual fund is technically known as the „Asset Management Company‟, and is appointed by the sponsor or the trustees. The AMC manages the affairs of the mutual fund. It is responsible for operating all the schemes of the fund, and can act as the AMC of only one mutual fund.

12. What are Gilt funds?

 

Gift funds are also known as Government Securities in India, Gift Funds invest in government papers (named dated securities) having medium to long -term maturity period. Issued by the Government of India, these investments have little credit risk (risk of default) and provide safety of principal to the investors.

 

13. What is business valuation?

 

Business valuation is a process and a set of procedures used to estimate the economic value of an owners interest in a business. Valuation is used by financial market participants to determine the price they are willing to pay or receive to consummate a sale of a business.

 




1.     What are the types of Mergers and also explain the process of mergers. 

 

The following are the types of mergers: Horizontal Merger

 

o  Vertical Merger

 

Conglomerate Merger o Congeneric Mergers o Reverse Merger

 

The process of merger or the steps involved in merger are as follows: 

 

 

o  Defining the Corporate Strategy

 

o  Implementing the Corporate Strategy

 

o  Target Identification

 

o  Valuation of the Merger

 

o  Merger Implementation

 

o   Post-Merger Integration

 

1.     Explain the details about Business Valuation. 

 

Business valuation is a process and a set of procedures used to estimate the economic value of an owners interest in a business.

 

Valuation is just to estimate:

 

What (cash flow) +When (time period) + How (risk), we receive in future out of a subject property.

 

(i)    Approaches for Valuation 

§    Asset-Based Approaches

 

§    Earning Value Approaches

 

§    Market Value Approaches

 

(ii) Reasons for Business Valuation (iii)Valuation Procedures 

 

(iv)                       Common Errors in Business Valuation 

 

(v) Advantages of Business Valuation Methods 

 

(vi)                       Disadvantages of Business Valuation Methods 

 

 

3.     What are all the techniques of Investment Analysis/Performance Evaluation of Mutual funds? 

 

Performance evaluation methods generally fall into four categories: 

Ø   Sharps Ratio

 

Ø   Treynors Measure

 

Ø   Jensen Measure

 

Ø   Modigliani and Modigliani Measure.

 

4.  What are the types of mutual funds?

 

Mutual funds can be classified under two different categories:

 

(i)  General Classification

 

 

§    Open-Ended Schemes

 

§    Close-Ended Schemes

 

§    Interval Scheme

 

§    Load Funds

 

§    Non-Load funds

 

§    Tax-Exempt Funds

 

§    Non-Tax-Exempt Funds

 

(ii) Broad Classification 

§    Equity Funds

 

§    Money Marker/Liquid Funds

 

§    Hybrid Funds

 

§    Debt/Income Funds

 

§    Gilt Funds

 

§    Commodity Funds

 

§    Real Estate Funds

 

§    Exchange Traded Funds(ETF)

 

§    Fund of Funds

 

5.     Explain the functions of Credit Rating Agency. 

 

A credit rating agency serves following functions:

Ø   Provides Unbiased Opinion

 

Ø   Provides Quality and Dependable Information

 

Ø   Provides Information at Low

 

Ø   Provide Easy to Understand Information

 

Ø   Provide Basis for Investment

 

Ø   Healthy Discipline on Corporate Borrowers.

 

Ø   Formation of Public Policy.



Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail
Business Science : Merchant Banking and Financial Services : Other Fee Based Management Introduction : Short Answers: Fee Based Management |


Privacy Policy, Terms and Conditions, DMCA Policy and Compliant

Copyright © 2018-2024 BrainKart.com; All Rights Reserved. Developed by Therithal info, Chennai.