Financial Services — DU Bachelor of Business Administration (Financial Investment Analysis) Previous Year Question Papers

If necessary, make suitable assumptions and state them clearly. 1. 2. 3. 4. A growing company plans to raise `800 crore through an Initial Public Offering (IPO) in a competitive and volatile market. You have been appointed as the Lead Manager for the issue. As the lead manager, design the complete IPO strategy covering key aspects such as issue structure, pricing approach (including book building), marketing of the issue, investor targeting, and regulatory compliance. Also outline the step-by-step process you would follow from pre-issue planning to post-listing activities. Evaluate the major risks involved and suggest measures to ensure the success of the IPO. (18) A startup founder with an innovative business idea but no stable cash flows is deciding between approaching a commercial bank or a venture capitalist for funding. Analyze the suitability of both sources of finance in this situation. Recommend the most appropriate option under different stages of business growth, justifying your answer with practical considerations such as risk, control, and repayment obligations. (18) During a period of market volatility, a mutual fund faces heavy redemption pressure as investors withdraw their investments in large numbers. In the context of mutual funds, analyze the strategies a fund manager can adopt to manage such large-scale redemptions while safeguarding the interests of remaining investors, including liquidity management, portfolio adjustments, and regulatory provisions. Further, evaluate the impact of these strategies on the fund’s performance, Net Asset Value (NAV), and investor confidence, and suggest measures to ensure stability and long-term sustainability of the mutual fund. (18) A commercial bank is facing liquidity constraints due to a large portion of its funds being locked in long-term loans such as housing and auto loans, and therefore decides to adopt securitization as a financial strategy. In this context, explain the concept and complete process of securitization, identify the key participants involved and their roles, analyze how securitization helps in improving liquidity, 5. 6. transferring risk, and maintaining capital adequacy, and discuss the potential risks and challenges associated with securitization along with its impact on overall financial stability. (18) CBA Company has decided to acquire a `5,00,000 mechanical device with a useful life of 10 years. The device will be depreciated on a straight-line basis with no salvage value, and the applicable tax rate is 20%. The company is evaluating two financing options: leasing and borrowing. Under the leasing option, lease payments of `60,000 are to be made at the beginning of each year. Alternatively, the company can borrow funds at an interest rate of 18%, repayable in equal instalments, with debt payments also due at the beginning of each year. You are required to analyze and compare the two alternatives and recommend the most suitable option. (18)