0807 FM (CFA540) - Question Paper Financial Management...

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1 Question Paper Financial Management (CFA540): July 2008 Answer all 72 questions. Marks are indicated against each question. Total Marks : 100 1. Which of the following players can act as a borrower as a well as a lender in the call money market? (a) LIC (b) SBI Mutual Fund (c) State Bank of India (d) ICICI (e) NABARD. (1mark) <Answer > 2. Who among the following players in the international capital markets collect the rupee dividends on the underlying shares and repatriates the same to the depository in US dollars/foreign equity? (a) Lead Managers (b) Underwriters (c) Custodian (d) Corporate borrowers (e) Lenders. (1mark) <Answer > 3. By which of the following means, can Government Securities be held? I. Stock certificates. II. Promissory notes. III. Bearer bonds. (a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (III) above (e) All (I), (II) and (III) above. (1mark) <Answer > 4. Which of the following instruments in the international capital market is fixed-interest securities having a maturity of over one year? (a) Commercial Papers (b) Treasury Bills (c) American Depository Receipts (d) Medium-Term Notes (e) Global Depository Receipts. (1mark) <Answer > 5. Which of the following does not act as a tool for RBI to maintain liquidity of the banking system? (a) Open Market Operations (b) Statutory Liquidity Ratio (c) Cash Reserve Ratio (d) Bank Rate (e) Prime Lending Rate. (1mark) <Answer > 6. Which of the following merger waves, is marked by large number of mega-mergers and cross- border mergers? (a) First Wave (b) Second Wave (c) Third Wave (d) Fourth Wave (e) Fifth Wave. (1mark) <Answer >
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2 7. In which of the following active anti take-over measures, the target company makes a counter tender offer response to the raider’s bid? (a) Greenmail (b) White Knight (c) Pac-Man Defense (d) Crown Jewels (e) White Squire. (1mark) <Answer > 8. Which of the following is/are example of a capitalized expenditure? I. Funds spent last year to renovate a building that could be used to house a new project that is currently being evaluated. II. Installation costs necessary to use a machine that is just purchased. III. The necessary increase in inventories needed to support a project that is currently being implemented. (a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) Both (II) and (III) above. (1mark) <Answer > 9. Which of the following is true ? (a) Effective rate of interest is always lower than the nominal interest rate (b) The effective rate of interest increases with increase in the frequency of compounding (c) The nominal interest rate increases with increase in the frequency of compounding (d) The effective and nominal interest rates are equal if the frequency of compounding is less than 4 (e) The frequency of compounding does not affect the effective and nominal interest rates. (1mark)
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0807 FM (CFA540) - Question Paper Financial Management...

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