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 „amalgamation‟formerger.
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: o Horizontal Merger
o Vertical Merger
o 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.
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