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ASSIGNMENT
| DRIVE | WINTER 2015 |
| PROGRAM | MBA(SEM 4) |
| SUBJECT CODE & NAME | MA0047TREASURY MANAGEMENT |
| BK ID | B1813 |
| CREDITS | 4 |
| MARKS | 60 |
Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.
Question. 1. “Risks in the organisation are usually considered as trade-off between reward and threat.”Critically explain the concept.
Answer:Risk is the potential of gaining or losing something of value. Values (such as physical health, social status, emotional well-being or financial wealth) can be gained or lost when taking risk resulting from a given action or inaction, foreseen or unforeseen. Risk can also be defined as the intentional interaction with uncertainty. Uncertainty is a potential, unpredictable, and uncontrollable outcome; risk is a consequence of action taken in spite of uncertainty.
The risk-return tradeoff could easily be called the iron stomach test. Deciding what amount of risk you can take on is one of the most important investment decision you will make.
The risk-return tradeoff is the balance an investor must decide on between the desire for the lowest possible risk for the highest possible returns.
Question. 2. Explain the types of corporate debt instruments available in Indian markets and theirfeatures.
Answer:The most distinguishing feature of the debt instruments of Indian debt market is that the return is fixed. This means, returns are almost risk-free. This fixed return on the bond is often termed as the ‘coupon rate’ or the ‘interest rate’. Therefore, the buyer (of bond) is giving the seller a loan at a fixed interest rate, which equals to the coupon rate.
Classification of Indian Debt Market
Question. 3. Give an idea of foreign exchange market.
Who are the participants in foreign exchange markets?
Answer:The foreign exchange market (forex, FX, or currency market) is a global decentralized market for the trading of currencies. This includes all aspects of buying, selling and exchanging currencies at current or determined prices. In terms of volume of trading, it is by far the largest market in the world. The main participants in this market are the larger international banks. Financial centres around the world function as anchors of trading between a wide range of multiple types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market does not determine the relative values
Question. 4. Working capital forms the most important part of operating capital. Do you agree? Justifyyour agreement/disagreement.
Answer:Working capital (abbreviated WC) is a financial metric which represents operating liquidity available to a business, organization or other entity, including governmental entity. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Gross working capital equals to current assets. Working capital is calculated as current assets minus current liabilities. If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit.
Question. 5. What are the objectives of IRR Management programme?
Answer:Interest rate risk or IRR exists in an interest-bearing asset, such as a loan or a bond, due to the possibility of a change in the asset’s value resulting from the variability of interest rates. Interest rate risk management has become very important, and assorted instruments have been developed to deal with interest rate risk. This article introduces you to ways that both businesses and consumers manage interest rate risk using various interest rate derivative instruments.
(a) The board of directors of each Farm Credit bank must develop, implement, and effectively oversee an interest rate risk management program tailored to the needs of the institution. The program must establish a risk management process
Dear students get fully solved SMU MBA assignments
Send your semester & Specialization name to our mail id :
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or
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