Financial Management Essay

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Examination Paper of Financial Management IIBM Institute of Business Management Examination Paper Financial Management Subject Code-B-103 Section A: Objective Type & Short Questions (30 marks)      This section consists of multiple choice & Short Notes.  Answer all the questions.  Part One carries 1 mark each & Part two carries 5 marks each. MM.100

Part one: Multiple choices: 1. The approach focused mainly on the financial problems of corporate enterprise. a. Ignored non-corporate enterprise b. Ignored working capital financing c. External approach d. Ignored routine problems 2. These are those shares, which can be redeemed or repaid to the holders after a lapse of the stipulated period. a. Cumulative preference shares b.
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Legal requirement b. Purpose of finance c. Period of finance d. Requirement of investors 9. It is that portion of an investments total risk that results from change in the financial integrity of the investment. a. Bull- bear market risk b. Default risk c. International risk d. Liquidity risk 10. _____________ measure the systematic risk of a security that cannot be avoided through diversification. a. Beta b. Gamma c. Probability distribution d. Alpha Part Two: 1. What do you understand by wealth maximization? 2. Discuss the concept of factoring. 3. Define Annuity. 4. What is the Difference between NPV and IRR? END OF SECTION A Section B: Case lets (40 marks)

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This section consists of Case lets.  Answer all the questions.  Each Case let carries 20 marks. Detailed information should form the part of your answer (Word limit 150 to 200 words). 2

IIBM Institute of Business Management

Examination Paper of Financial Management Caselet 1 Case1: Credit Decision - Agarwal Case On August 30, 2006, Agarwal Cast Company Inc., applied for a $200,000 loan from the main office of the National bank of New York. The application was forwarded to the bank's commercial loan department. Gupta, the President and Principal Stockholder of Agarwal cast, applied for the loan in person. He told the loan officer that he had been in business since February 1976, but that he had considerable prior experience in flooring and carpets since he had worked as an

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