Exam on Merger and Acquisition

2020-2021

Read the case and answer the questions posed towards the end. Answer to each POSER
should not exceed 300 words. (MM 20X5=100)

1. POSER: In your judgment, what were the primary motivations for Pfizer wanting to acquire
Pharmacia (Categorize them in terms of the primary and secondary)
2. POSER: Why do you think Pfizer’s stock initially fell and Pharmacia’s increased?
3. POSER: In your opinion, is this transaction likely to succeed or fail to meet investor
expectations?
4. POSER: What are the risk associated with Pfizer and Pharmacia deal?
5. POSER: Would you expect continue consolidation in the global pharmaceutical industry
(Explain your answer in term of Why or Why not)?
CASE STUDY

Read the case and answer the questions posed towards the end. Answer to each poser should
not exceed 300 words.

Pfizer Acquires Pharmacia to Solidify Its Top Position

In 1990, the European and U.S. markets were about the same size; by 2000, the U.S. market had
grown to twice that of the European market. This rapid growth in the U.S. market propelled
American companies to ever increasing market share positions. In particular, Pfizer moved from
14th in terms of market share in 1990 to the top spot in 2000. With the acquisition of Pharmacia
in 2002, Pfizer’s global market share increased by three percentage points to 11%. The top ten
drug firms controlled more than 50 percent of the global market, up from 22 percent in 1990.
Pfizer is betting that size is what matters in the new millennium. As the market leader, Pfizer was
finding it increasingly difficult to sustain the double-digit earnings growth demanded by investors.
Such growth meant the firm needed to grow revenue by $3-$5 billion annually while maintaining
or improving profit margins. This became more difficult due to the skyrocketing costs of
developing and commercializing new drugs. Expiring patents on a number of so-called blockbuster
drugs (i.e., those with potential annual sales of more than $1 billion) intensified pressure to bring
new drugs to market.
Pfizer and Pharmacia knew each other well. They had been in a partnership since 1998 to market
the world’s leading arthritis medicine and the 7th largest selling drug globally in terms of annual
sales in Celebrex. The companies were continuing the partnership with 2nd generation drugs such
as Bextra launched in the spring of 2002. For Pharmacia’s management, the potential for
combining with Pfizer represented a way for Pharmacia and its shareholders to participate in the
biggest and fastest growing company in the industry, a firm more capable of bringing more
products to market than any other.
The deal offered substantial cost savings, immediate access to new products and markets, and
access to a number of potentially new blockbuster drugs. Projected cost savings are $1.4 billion in
2003, $2.2 billion in 2004, and $2.5 billion in 2005 and thereafter. Moreover, Pfizer gained access
to four more drug lines with annual revenue of more than $1 billion each, whose patents extend
through 2010. That gives Pfizer, a portfolio, including its own, of 12 blockbuster drugs. The deal
also enabled Pfizer to enter three new markets, cancer treatment, ophthalmology, and
endocrinology. Pfizer expects to spend $5.3 billion on R&D in 2002. Adding Pharmacia’s $2.2
billion brings combined company spending to $7.5 billion annually. With an enlarged research and
development budget Pfizer hopes to discover and develop more new drugs faster than its
competitors.
On July 15, 2002, the two firms jointly announced they had agreed that Pfizer would exchange 1.4
shares of its stock for each outstanding share of Pharmacia stock or $45 a share based on the
announcement date closing price of Pfizer stock. The total value of the transaction on the
announcement was $60 billion. The offer price represented a 38% premium over Pharmacia’s
closing stock price of $32.59 on the announcement date. Pfizer’s shareholders would own 77% of
the combined firms and Pharmcia’s shareholders 23%. The market punished Pfizer, sending its
shares down $3.42 or 11% to $28.78 on the announcement date. Meanwhile, Pharmacia’s shares
climbed $6.66 or 20% to $39.25.

Exam on Strategists' Tool-kit and Competitive Intelligence

2020-2021

1. Turbulence in environment leads to catastrophes which result in severe distress to businesses

and firms. There are numerous signs of distress—and a distressed company is typically dealing
with multiple signs. As a consultant can you evolve a structure for classifying the indicators of
distress?
Question Marks: 30.00

2. Write the steps under the case commandments? Question Marks: 10.00

3. Among the cases mentioned below mention the approach in steps which you will employ to
reach at the solutions? Please adhere to the rules of consultants by avoiding to treat the question
as an arithmetic problem? I am interested in evaluating the approach only.
(5*6=30 Marks)

1. How Many Beer Bottles Are in Circulation in India?

2. How big is the Market Size for Band-Aids in India?

3. How big is the Indian market for Band-Aids (the brand)?

 Band-Aid is a brand name of American pharmaceutical and medical devices giant Johnson
& Johnson’s (NYSE: JNJ) line of adhesive bandages and related products. It has also
become a genericized trademark for any adhesive bandage in the United States, Australia,
Brazil, Canada and India.

4. What is the Market Size for Internet Routers in India?

A network router is a device that forwards data packets between computer networks,
creating an overlay internetwork. The most familiar type of routers are home and small
office routers that simply pass data, such as web pages, email, IM, and videos between the
home computers and the Internet. An example of a router would be computer owner’s cable
or DSL modem, which connects to the Internet through an Internet service provider (ISP).
Estimate the annual market size for internet routers in the commercial segment (companies
with 20 to 1000 employees) in India.

5. What is Worldwide Demand-Supply for Consulting Jobs? What is the annual demand and
supply for management consulting jobs in the world?

6. How Many TV Sets Are Sold in the UK Each Year?

4. This section contains full cases; you are required to identify the frameworks which are the best
¤t to solve them and present a ¥ow chart of the approach which can yield an answer to the question.
Feel free to make assumptions. (10*3=30 Marks)

a. It is October 2001, just one month after the 9/11 attacks. Your client is the NYCEDC (New
York City Economic Development Corporation). The NYCEDC is a not-for-profit corporation that
promotes economic growth across New York City’s five boroughs. It is the City’s official
economic development corporation, charged with using the City’s assets to drive growth, create
jobs, and improve quality of life. The agency has its headquarters in Lower Manhattan.

There are 300 hotels in New York City; on average, each hotel has 250 rooms; the average nightly
room rate is $300.00; Average nightly occupancy is 80%
The NYCEDC partners with a variety of governmental and non-governmental firms, serving as an
engine for economic development. Like a Chamber of Commerce, the NYCEDC shapes policy for
local business interests. Our client NYCEDC is requesting our help in looking at the city’s hotel
industry in the wake of the September 11th attacks. The NYCEDC would like to know two things:

1. Can we quantify the expected impact of 9/11 on the New York City hotel industry?
2. Will the New York City hotel industry need government assistance?

b. Your client Duolingo Inc. is a software and information technology (IT) startup based in
Pittsburgh, Pennsylvania, United States. The company’s main business is to provide an on- -
demand video communication service that uses portable devices such as laptop web cameras or
videophones to provide sign language or foreign language interpreting services to customers in
need.
For the past 5 years, the client Duolingo has had great success in the airline industry. The company
has established business partnership with every major airline companies in the US. Now, the CEO,
also one of the co-founders of the startup, wants to grow his business even further and wants your
advice on developing a viable growth strategy. How would you go about it? What would you
recommend the CEO do?

c. A client is running a successful family-owned travel business that offers complete travel
packages to its customers. It has a very good relationship with a major airline company from which
it buys tickets in volume and receives a nice discount. The owner of the business is a grandfather
who will eventually pass on the business to his children, but has heard about an interesting new
business opportunity. It has always been his dream to operate a chartered airplane, and he now has
a chance to buy one (through the travel business), operate it, and integrate it into his current travel
business. Should he do it or not?

Creativity and Design Thinking for Strategic Value Creation

2020-2021

Please read the case titled “The future is now and was here always” and answer the questions
that follow.

1. Tao’s first question asks Vignesh: Please choose any one artifact that you are using as a
daily-use-product (easily available around you at home). Try to answer the following (feel
free to sketch visuals to support your descriptions): (15+15+5=35 Marks; word limit 500
words)

a] Which artifact has been selected by you and what is the associated present “human need” (call
it HN) that is being solved by it. Please try to recreate the history of this artifact and how associated
“human need” was being solved by its different variants. Try to create visual prototype and
elaborate, how the associated past “human needs” (HNp) were being solved: i) 100 years back; ii)
50 years back; and iii) 5 years back. State assumptions and user persona for each. What are the
differences between HNp (of past) and HN (present).

Question Marks: 15.00

b] Please try to envision the future of this artifact. Try to create visual prototype and elaborate,
how this associated “human need” (HN) may be getting solved in future (HNf): i) 5 years later; ii)
50 years later. State assumptions and user persona for each HNf. What are the differences and
commonalities between HNf (of future) and HN (present).

Question Marks: 15.00

c] Which “design rule” explains the philosophy embedded in this apparent continuity in “human
need” (HN) – past, present and future?

Question Marks: 5.00

2. Suppose as Vignesh, you are absorbed as a manager in a R&D department of a company
that looks to launch a new product five years down the line, aimed at solving the future
“human need” (HNf) as it might be five years later (as identified for Question 1b above). As
R&D manager you do not want to go ahead carrying burden of assumptions or status quo.
Rather you wish to take design thinking route aimed at coming up with fresh idea(s) for the
new product: (20+20=40 Marks; word limit 600 words)

a] Through this problem at hand, take us through the design thinking process (all six stages) of
creating this new product. Please elaborate on each step independently in terms of possible ideas
and tangents that maybe taken.

Question Marks: 20.00

b] Highlight tools that you would prefer for each of the above identified six stages? Demonstrate
their usage as you elaborate the process.

3. Regarding the customer-product fit please answer the following questions: (10+15=25
Marks; word limit 400 words)

a] Identify and list assumptions that you are making in the process about the user preferences.
Which of these assumptions are most critical?

Question Marks: 10.00

b] Who are the target customers you have considered in your mind while designing the product?
How can you get these assumptions tested and at what stage of the design process? What can be
the question formulation be, in case you wish to clarify these assumptions through questions. Show
through examples, for each assumption.

Question Marks: 15.00

Case: The future is now and was here always

Vignesh, an MBA student, is based out of Mumbai. He is waiting for a scheduled call with his
friend Tao who lives in Korea. Vignesh connected with Tao over LinkedIn. Both of them share an
interest in eastern philosophy. No doubt, most of their conversations are very philosophical and
full of intellectualized abstractions.
Today, Tao wanted to share his views about a recently concluded “design thinking workshop” that
he was part of. As Vignesh sets his Skype in order, there is a ringtone already playing in the
backdrop. As he fetches the headphone, he hears a voice from the other end. It is Tao:
Tao: “Hi, Vignesh. How are you doing? A lot is happening in India these days. Right? Lockdown,
COVID19, innovations, I see there is a lot of news coming from India.”
Vignesh couldn’t hear the first part of the conversation, but still continued:
Vignesh: “To add my two cents of observations, the customer preferences are undergoing a
tectonic shift. See, we are more careful of social distancing norms now. We are more worried
about not wasting precious resources. Getting the workforce back is a challenge, so entrepreneurs
need to think on their toes, taking into account the changes around us. Speaking this is just
scratching the surface, or rather being naïve, if we say, Healthcare, transportation, essential
supplies only will change.”
Tao: “Phew. That is heavy, Vignesh. It seems like you have been thinking about all this for quite
a while now?”
Vignesh: “Of course. It is happening automatically. I mean not a conscious effort as such.”
Tao: “I can understand Vignesh. Lots of negativity all around. I want to hear from real Vignesh!
Who is always positive and is looking at the philosophical side of the things.”
Vignesh: “Oh. Sure. Reality is that everything, yes, everything is going to change. If we apply our
minds, we will be able to figure out the real problems. The problems have opportunities hidden in
them. Right?”
“Opportunity” is central to the discussions Vignesh and Tao have had in recent past. Since both of
them share a common respect for the role of entrepreneurship in solving real problems, and both
of them are quite positive in their outlook.
Tao: “Ha Ha Ha (laughing). That is like Vignesh. Is God testing the “Darwin’s Theory” right
now?”
Vignesh: “So you mean the survival of the fittest. Darwin’s theory?”
Tao: “Well, not exactly. I have twisted it a bit. I’m saying the survival of the most adaptive—the
most proactive. So why are we humans applying ourselves? Ideas are all around.”
Vignesh: “Is it about ideas or rather about their implementation, Tao?”
There is a sudden power cut. Vignesh looks for candle around him. There are a lot of things lying
around him at the table. Not able to find a candle, he turns on the flashlight of his mobile phone
and points it towards his face.
Tao: “Power cut again? We generally don’t face this issue here. Lucky we.”
Vignesh: “Yes. But there might be some other problems that you are facing and might not be
present here. For example… Hmmm…. Let me think. I think we had noted them at a sheet during
one of our previous conversations. Need to find out that piece of paper (smiles).”
Tao: “No worries (smiles). I agree. But today, I wanted to discuss something more important. You
know. What I discovered in the recent design thinking workshop was… I mean a lot of philosophy.
But I would say “practical philosophy.” I mean around “doing and thinking. And doing and
thinking again.” I mean thoughtful doing and actionable thinking. Wow. That sounds good,
Vignesh. Thoughtful doing and actionable thinking. I think that was at core. I made 300 pages of
notes. Philosophy and ideas. Pure gem of ideas (smiles).
Vignesh: “300 pages? Is it a book or something? Can you share important highlights?”
Tao: “Sure. But in the form of exercises. I will teach you the way I have learned it. Ok. Deal?”
Vignesh: “No deal. I have tons of pending assignments and a new Netflix web-series is out.”
Tao: “What if I tell you that even Netflix applies design thinking.”
Vignesh: “Wow. Sure then, I think let's go ahead. I guess I can take out some time out of my
schedule (smiles).”
Tao: “So I am sending you a photo of the six-stage process: “Understand-Observe-Define (point
of view)-ideate-prototype-test “of design thinking.”
Vignesh: I have heard these terms. Empathy is critical in the initial three and creativity in the last
three steps. Right?
Tao: “Not exactly. But yes, kind of. Empathy goes all over the process, in fact. I would say, being
“open and free from bias is important.” Since we can’t do that, nature abhors vacuum, so rather
we will try to be “aware of our assumptions and test them” with customers.”
Vignesh: “And try to get as close to the assumptions of the users.”
Tao: “Ok, you know this. In that case, let’s move to something more advanced.”
There is light in the room all of sudden. The stationary items, washing machine, bookshelf, heater,
kitchen utensils all are visible to Tao in Vignesh’s screen background. Meanwhile, Tao types a
few questions and emails them to Vignesh.
Vignesh: “Sure. I just saw your email. I think I will get back to you after an hour or so after
completing the task.”
Tao: “I have listed the tools that are generally used at each of these six stages of the design
thinking process. But you should make judicious use of them. Remember, the needle has its own
utility and a rocket has its own. So don’t mix these tools.”
Vignesh: “I see the questions you have sent. You want me to look at the artefacts (products) around
me in their historic perspective and based on that you want me to try to figure out the future for
the same.”
Tao: “Yes. Artifact is defined as “any object made by human beings, especially with a view to
subsequent use (dictionary.com).” So you can interpret the term as a daily use product available
around you. I will leave you with two pointers: 1) Donald Norman states (in Living with
Complexity), “We must design for the way people behave, not for how we would wish them to
behave.” 2) The same author also states (in The Design of Everyday Things), “Finally, people
have to actually purchase it. It doesn’t matter how good a product is if, in the end, nobody uses
it.”
So engage with this activity. I hope this activity is going to be helpful. And after that we will
continue our discussion next week! Let me sign off, now. Thank you.”
 Exam on Commercial Banking Practices and Treasury Management:
2020-2021
1. Banking News dated July 24, 2020
“Macro stress tests for credit risk indicate that the gross non-performing assets ratio of all scheduled
commercial banks may increase from 8.5 per cent in March 2020 to 12.5 per cent by March 2021 under the
baseline scenario; the ratio may escalate to 14.7 per cent under a very severely stressed scenario.”

Interpret and explain the impact of the above news on the financial performance of the commercial banks and
the Indian economy?
Question Marks: 15.00

2. Given below is the select financial data on Yes Bank:

[a] Compute the loans to deposits, borrowings to loans, Gross NPA and Net NPA ratios of Yes Bank.
Question Marks: 5.00

3. Given below is the select financial data on Yes Bank:

[b] Using the ratios computed in (a) above, and other information made available to you, offer your comments
on the Yes Bank debacle. Do you support the Reserve Bank led bailout plan under which SBI, select private
sector banks and LIC infused capital into the Bank? If yes, why?
Question Marks: 15.00

4. Given below is the select financial data on Yes Bank:

[c] Compute capital required to sustain loan portfolio of ₹1,71,433 crores as on March 2020, assuming
portfolio’s overall risk weight at 90 %, and capital adequacy ratio at 9%. Calculate Yes Bank’s current lending
capacity, assuming bank has augmented its total capital to ₹15000.
Question Marks: 10.00

5. Given below is the select financial data on Yes Bank:

[d] Name the specific role played by Yes Bank in extending fund based and non-fund based credit facilities?
Describe the numerous costs Bank will incur in performing this role.
Question Marks: 5.00
6. Given below is select financial data extracted from the Income Statement of Bank One.

[a] Work out the cost to income ratio (CIR) of Bank One over the years and comment on the trend of CIR. Do
you observe any strengths and weaknesses vis-à-vis Peer Group?
Question Marks: 9.00

7. Given below is select financial data extracted from the Income Statement of Bank One.

[b] Discuss the relationship between CIR and Gross Profit. Under what circumstances CIR may rise even when
the actions taken to reduce operational costs are successful.
Question Marks: 6.00
8. Given below is select financial data on Asset-Liability Mix for Bank One.

Questions/Issues to be addressed:
[a] Calculate percentage of earning assets (EA), yield on EA, percentage of IBL, and yield on IBL liabilities-
actual; weighted average yield on total earning assets and total interest bearing liabilities-actual and net interest
income and yield-actual.

Question Marks: 10.00

9. Given below is select financial data on Asset-Liability Mix for Bank One.

Questions/Issues to be addressed:
[b] As Vice President, in-charge, of the Asset Liability Committee (ALCO), you have been asked to suggest
changes in the asset and liabilities profile of Bank One to optimize Bank’s net interest income and yield.
Work-out the adjusted asset and liability profile reflecting improvement in Bank One’s net interest and yield.
Question Marks: 15.00
10. Given below is select financial data on Asset-Liability Mix for Bank One.

Questions/Issues to be addressed:
[c] Bank One has currently structured its investment portfolio, equally spread over one-year to six-year
maturities. Accordingly, it holds ₹8,391.667 Crore each in one-year, two-year, three-year, four-year five-year
and six-year securities. What investment maturity strategy is Bank One following? Why do you believe that
Bank has adopted the particular strategy it has, as reflected in the maturity structure of its portfolio? Would
you recommend rate-expectation maturity strategy at a later stage to Bank One, if so why?
Question Marks: 10.00
 Exam on Investment Banking:
2020-2021

Question 1:
(a) Nutrivision has to hired your company as book running lead manager for its IPO issue. You
will advise and prepare Nutrivision for the IPO. Nutrivision has two main competitors as of now,
Chia Foods and Sam Agro. You adopt relative valuation approach for pricing the IPO. What issue
price range will you suggest to Nutrivision given the following details of its competitors? Assume
that it has zero debt on its books. Relative valuation may use PE and EV/EBITDA ratios.

Particulars (INR) Chia Foods Sam Agro Nutrivision

PAT (in Million) 3500 1200 627
EV (in Million) 262231 98456
EBITDA (in Million) 9496 1120 1028
No. of Shares (in
Million) 152 285 141
Share Price 1643 280
Question Marks: 10.00

(b) After some years of the IPO, Nutrivision wants to raise equity funds again from the public.
You have to advise Nutrivision on the two possible ways of raising equity again from the public.
Briefly discuss the two ways of raising equity funds from the public, post-IPO. (10 Marks)
Question Marks: 10.00

Question 2:

(a) Pelican Inc. makes an issues of 200,000 shares of rupees 10 each at par aggregating to
20,00,000 rupees. The issue has been underwritten fully by two underwriters GS and BNP to the
extent of 120,000 and 80,000 shares respectively. The issue has been closed and the following is
the information available on the subscription.
Valid subscription received – Rs. 15,00,000
Received through underwriter GS - Rs. 9,00,000
Receive through underwriter BNP - Rs. 5,00,000
Direct subscription of issue - Rs. 1,00,000
Underwriting Commission – 2% on subscribed securities and 1.5% on devolvement
What will be the underwriter’s commission in this case?
Question Marks: 10.00

(b) Calculate year-end profit after tax of GS underwriting firm, on the basis of given information,
assuming average cycle time of one year:
Present Net worth of GS underwriting firm is – 70 lakhs
Devolvement probability – 0.20
Devolvement quantum – 45%
Underwriting Commission – 2%
Tax rate – 25%; Capital loss on devolved securities– 12%
Question Marks: 10.00

Question 3:
Mahogany International is expanding into consumer retail and is in the need of funds. It decides
to go for a rights issue. You, as the investment bank appointed for this rights issue, suggest an offer
price of Rs. 50. The particulars of the Mahogany International are follows:

Current Market Price of Share – Rs.60

Book Value of Share – Rs.40
Earnings per Share – Rs.5
Amount of Fund to be raised – Rs.45 crores
Average P/E ratio of the industry is 14
No. of Shares- 2.5 million shares
Face Value per Share – Rs. 10 each

(a) How many fresh shares should be issued in the rights issue and what will be the total post-
rights issue net worth?
(b) If the pre-issue EPS of Rs.5 is to be maintained for all equity holders, then what should be
the return on post-issue net worth?
(c) A subsidiary of Mahogany International, Oakwood Energy, wants to go for a corporate debt
issue. What are the possible problems that corporate debt issues face in India that you need to
communicate to your client, Mahogany International.
(5+5+10=20 Marks)

Question 4:
Placebo Pharma hires your investment bank for advisory on use of profits. You as an analyst find
that there is overcapacity in the industry as of now and no projects with positive NPV are available
for investment. You advise Placebo Pharma to go for share buyback. The company has the
following financials as per the latest financial statement:
Particulars Amount (Rs.)
Paid up capital (20,000 No. of equity shares of Rs. 10 each) 2,00,000
Debt 16,00,000
General Reserve 3,00,000
Security Premium Account 5,00,000
Capital Redemption Reserve 2,00,000
Current EPS 6
Current market price per share 36
1. What can be the maximum buyout price of this buyout offer as per regulatory norms?
2. Keeping in view the debt/equity ratio norms of 2:1 for buyback, calculate the offer price for this
buyback if maximum possible number of shares are to be bought back.
3. What are some key financial and strategic factors that make companies opt for voluntary delisting?
(5+10+5= 20 Marks)

Question 5:

(a) Rosewood Venture Capital (RVC), is early-stage investment arm of Rosewood Investment
Banking. RVC is looking to invest in a startup firm which has an annual revenue of INR 32 million
and it expects to grow at 55% for the next seven years. The expected holding period for RVC is 7
years. Net Profit margin for the startup is expected to be 26%. Upon comparing with global peers,
the expected PE ratio of the startup would be 22. RVC maintains a high required rate of return at
38%. The startup is looking to raise INR 150 million in this round from RVC Capital. If the RVC
is looking to back the startup then how much stake should RVC acquire? Assume that
traditional/conventional venture capital methodology is adopted by RVC for valuing the startup.
(b) Discuss key similarities and differences in investment approach of Private Equity
and Venture Capital firms?
(10+10=20 Marks)

Descriptive Exam – Financial Derivatives

2020-2021

1. Mr. X has a portfolio with a value of Rs. 23,00,000 and the beta of the same is 1.1. He wants
to hedge the risk to this portfolio for the next one month. He plans to use one month futures
contract on Nifty index for hedging. Nifty is currently trading at 11,160 and Nifty futures are
11,190. The Nifty lot size is 75 per contract. Risk free rate is 7%. Using the given information,
you are required to:
I. Calculate hedge value and lots required for hedging. What position should the hedger take in
Nifty futures?
II. Calculate the payoff of Mr. X in two situations if:
Nifty Spot falls by 7% and Nifty Futures fall by 730 points.
Nifty Spot gains by 4% and Nifty Futures gain by 435 points.
(5+7.5+7.5 = 20 marks)
2. (a) Suppose that the risk-free interest rate is 6% per annum and that the dividend yield on a
stock index is 4% per annum. The stock price is 400, and the futures price for a contract
deliverable in four months is 410. Find the theoretical valuation/price of this stock future?
(b) A Mentha Oil mill is expected to produce tonnes of mentha oil at the end of October. Spot
price today is Rs. 220 per kg. October futures contract in mentha oil, due on 29th October, is
trading at Rs 250 per kg. The mill owner feels that a price lesser than Rs 250 per kg will prevail
in October-end due to excessive supply then. Spot and futures prices converge on expiry day, so
are same.
i. What will be the payoff if mentha oil price declines to 180 per kg in October-end?
ii. What will be payoff if the mentha oil prices increased to Rs.270 per kg in October end on
expiry instead of decreasing as was anticipated?
(5+7.5+7.5 = 20 marks)
3. A trader buys five futures contract on gold in MCX. Assume that each contract is worth 1000
grams. The price quoted is INR 50,000 per 10 grams. Initial margin is set at 20%, while the
minimum maintenance margin is 8%.
What is the amount of initial margin and maintenance margin the investor has to deposit with the
broker?
At what price of gold futures will the trader receive a Margin Call?
In part (b) if the trader short sold the futures contract instead of buying, then at what price will
the margin call be triggered.
(7.5+7.5+5 = 20 Marks)
4.
(a) What are Interest Rate futures and how can they be used for hedging? How are they different
from Forward Rate agreements? (10 marks)

(b) Hedgers, speculators and arbitrageurs play a significant role in the stock market. Elucidate
the statement. (10 marks)
(c) “Valuation and pricing of futures can vary for different underlying assets”. Discuss the
valuation/pricing of gold futures (assuming it has storage cost) and equity futures (assuming it
has dividend receipts). (10 marks)
(d) Calculate the Open Interest and Volume in the Table given below. By looking at the price
and open interest what could be the likely price trend in coming days? (10 marks)
 Price
Open
Day Trader Action Quantity Volume of underlying
Interest
share

Mark Buy 10

Anil Buy 5
Monday 1750
Vivek Sell 7

Rachna Sell 8

Chitra Buy 5

Rachna Buy 3

Tuesday Vivek Buy 2 1732

Mark Sell 5

Rohit Sell 5

Vivek Buy 5

Zainab Buy 9
Wednesday 1776
Chanchal Sell 8

Mark Sell 6

Exam on Financial Engineering Using R:

2020-2021

1. Answer the following questions based on the file stock_prices.csv which is the closing
prices of various stocks.
Question 1: Data Exploration. (Use R and answer these questions)
1. Import the data to R studio and read the data.
2. How many companies are listed in the
dataset?
3. What is the time period for which the stock prices are given?
 4. Are there any empty rows or column in the dataset? If so, how many are there?
5. Delete the row or column that has no values in it.
6. Which stock has the highest closing price, and which has the minimum.
7. Convert the given dataset into a time series data. [2+2+2+4+2+2+6= 20]

2. Answer the following questions based on the file stock_prices.csv which is the closing
prices of various stocks.
Question 2: Consider the stock price of United Technologies in the csv file and answer the
following questions:
1. Calculate the weekly and monthly returns of United Technologies
2. Subset the data for the 2 years 2018 and 2019.
3. Using the dataset obtained in (b), plot and explain whether there is a bullish crossover or
a bearish
crossover.
4. Use Bollinger bands to indicate when the stock was overbought and when it was oversold
[6+4+12+13= 35]
3. Answer the following questions based on the file stock_prices.csv which is the closing
prices of various stocks.
Question 3: Creation of portfolio (5 marks)
Create a portfolio of the securities Boeing, Cisco, Nike, McDonalds, and Pfizer by considering
the closing prices upto 31 Dec 2019.
Question Marks: 5.00

4. Answer the following questions based on the file stock_prices.csv which is the closing
prices of various stocks.
Question 4: Portfolio Returns [20 marks]
Using the portfolio created in Question 3, calculate the portfolio returns if a person invests
equally in all the stocks.
Question Marks: 20.00

5. Answer the following questions based on the file stock_prices.csv which is the closing
prices of various stocks.
Question 5: Portfolio Risk [20 marks]
Using the portfolio created in Question 3, calculate the portfolio risk if a person invests 15%
each in Boeing and McDonalds, 20% in Cisco and the remaining equally in the other two stocks.
Question Marks: 20.00

Exam on Equity Valuation and Portfolio Management:

2020-2021

Ques 1. (A) The High Growth Company has EPS of Rs. 25, and has just paid a dividend of Rs.5
per share. The dividend is expected to grow at a rate of 20% per year for the next 3 years and then
10% for the consecutive three years. However, after 6 th year, company is expected to move in the
stable growth phase. In stable growth phase, company will be able to earn Return on Equity of
20%, but its dividend payout ratio will be high at 75%. If the stock has beta of 1.33, Rf = 4%,
Market Risk Premium =6%.
(1) Estimate terminal growth rate for the stock. (5 Marks)
(2) Estimate the intrinsic value of a share of stock using Dividend Discount Model? (10 marks)
Question Marks: 15.00

Ques 1. (B) Why float adjustment is done to market capitalization index weighting method? Which
indexing method (Market Capitalization Weighted or Fundamental Weighted) will result in over
allocation in overpriced securities and under allocation in underprice securities, if an exchange
traded fund is created tracking index value? Why? (10 Marks)
Question Marks: 10.00

Ques 2. Embratel is an unlisted telecom infrastructure company operating in India. Reliance a new
entrant in the telecom market is planning to acquire Embratel in a negotiated deal with the its
management. Reliance hires you as their valuation consultant for valuation of Embratel. Following
data about the comparable firms of Embratel is collected:
Embratel has a very low debt/equity ratio of 0.20. (5 Marks each)
Using the data of the comparable firms and Embratel calculate the followings:
1. Unlevered betas for all the three comparable firms in telecom infrastructure industry.
2. Median unlevered beta for the industry, use this beta to calculate levered beta for Embratel.
3. If median adjusted R2 for the comparable firms’ regression beta was 0.40, calculate total beta
for Embratel using levered beta calculated in step 3 and adjusted R2 for the comparable firms.
4. If risk free rate is 5.5% and market risk premium is likely to be 6%, calculate appropriate
discount rate for Infratel
(a) Using normal levered beta calculated in step 2, and
(b) Using total beta calculated in step 3.
5. Which discount rate is more appropriate for Reliance as acquirer, using normal levered beta of
Embratel, or total beta of Embratel? Explain.
Question Marks: 25.00

Ques 3. An Equity Analyst observes following anomalies related to the stock returns- (5 Marks
Each)
a. Day of the week effect – The average Monday return is negative and lower than the average
returns for the other four days.
b. Weekend effect – Returns on weekend tend to be lower than returns on weekdays.
c. Calendar effect – Returns of little known small cap companies tend to be higher in the month of
April and lower in the month of March in India.
d. Size Effect – Smaller firms returns tend to outperform their larger counterparts in long run.
e. Earnings Surprise – On the announcement of quarterly earnings, returns of the firms which have
beaten the market expectations (positive earnings surprise) tend to go up for next 90 days, and
contrarily, returns of the firms missing market expectations (negative earnings surprise) tend to go
down for the next 90 days. Identify which level of market efficiency (weak, semi-strong, or strong)
these anomalies violates respectively? Also, explain the reason behind the occurrence of these
specific anomalies. And how will you make money in case these anomalies do exist? Answer for
each anomaly separately.
Question Marks: 25.00
Ques 4. A. Following financial information about ABC Corporation is available for the current
year. (15 Marks)

Calculate the followings for the ABC for the current Year
1. Free Cash Flow for the Firm (FCFF)
2. Free Cash Flow for the Equity (FCFE)
3. Reinvestment Rate using operating income and actual reinvestment made by the firm.
Question Marks: 15.00
Ques 4. A DBS the largest bank of Singapore has been returning 15% to its equity holders
consistently. Its entry into fast growing emerging markets like India, and Vietnam is expected to
increase its ROE by 2% to 17%. However, it is expected to pay dividend at 50% payout rate in the
future as well. Calculate
1. DBS expected growth rate without its expansion in the emerging markets (5 Marks)
2. DBS expected growth rate associated with its expansion in emerging markets (5 Marks)
Question Marks: 10.00
 Exam on Managing business on Cloud
2020-2021

Question 1
Short Answer Questions (Attempt any three): (10*3=30 points)
A. Discuss in detail various forms of software acquisition methods
B. Explain Multitenancy with a suitable example
C. Differentiate between IaaS, SaaS, and PaaS
D. Explain the common and essential characteristics of cloud computing
Question 2 (20 Points)
Citymaps, a startup based in New York, NY, provides a social mapping platform available on iOS,
Android, and the web and supports the easy creation and sharing of maps by different users around
the world. The mission of Citymaps is simple: make mapping a social activity. The company
strives to provide an attractive and intuitive mapping interface that allows users to seamlessly share
individual locations, or a collection of locations, and to discover new places to explore. From
inception, Citymaps has made it a priority to maintain operational efficiency with a small
engineering team that is focused on the development of applications. In addition to being able to
put its resources toward application development rather than infrastructure operations, the team’s
key needs included the ability to scale effectively as the company grew and an efficient way to
measure application response time, error rates, and service availability. The Citymaps team needed
an IT solution to help them scale effectively, use their resources efficiently, and perform
application stack log analysis seamlessly. Hence, Citymaps decided to use AWS services.
Discuss in detail the bucket of AWS services you would recommend to Citymaps for scalability,
flexibility, seamless connectivity, security and to receive analytics-like reporting for its
application logs.
Question 3 (30 points)
Discuss the advantages of developing a microservices-based architecture over SOA.
Assuming you are a freelancer SaaS consultant, two organizations hired you for designing the
blueprint of their business services. The organizations have been receiving bookings via email,
phone, or the website and now they are planning to launch a responsive and interactive app on the
android platform. The services are accessible to PAN India. By stating proper assumptions design
key services and microservices for the following 2 businesses:
1. Services and Microservices for an online magazine publication app in multiple languages
2. Services and Microservices for Movers and Packers App
Question 4 (20 Points): Cosmic Aurora, is an online Tarot card platform that has about
10,00,000 subscribers and about 35% of their subscribers are frequently accessing (at least twice
in a week) the web page for their future predictions. Currently, they have in-house servers and
technical staff for the maintenance. The USP of Cosmic Aurora is to maintain high-level secrecy
for its subscriber’s data. The organization works on freemium (free + Premium) model and
provides generic and customized readings. The business is growing at CAGR of 27% and
demands further investments. To attract more subscribers, they have reduced their service
subscription by 17% which means the user base is increasing but the profits are at the status quo.
A majority of the business cost attributed to technical maintenance (servers, network, engineers,
etc.). The founder of Cosmic Aurora has heard about cloud computing for a while, but unable to
decide whether he should go ahead as he is highly worried about security on cloud and hidden
costs. After a lot of deliberation, he invited you as a cloud consultant. Prepare a costing sheet for
5 years based on the figures given below for Cloud vs On-premise and suggest which one will be
beneficial and should be adopted.
 Exam on Machine Learning Block chain Fintech

(2020-2021)

1. Design a spam filter using Genetic Algorithm. (20 marks)

2. Difference Supervised and Unsupervised learning. (20 marks)
3. Differentiate btw ANN, CNN, RNN. (20 marks)
4. Potential of AI at FORE. Identify the Business objectives, Data Properties
and Technology Stack. (40 marks)
 Exam on Competency Mapping:
2020-2021

1. How Capabilities & Core Competencies are different from each other? Do you think there could
be different implications for managing Capabilities and Core Competencies respectively for a
firm? Explain your response. (10 + 15 Marks)

Question 2
IBM has worked hard to improve its business consulting skills because it knew that the customers
don’t just wanted to buy computers and softwares, but they also wanted to buy solutions to real
business problems.
Q 2.1. In reference with critical competence of a firm discuss efforts of a firm for sustained
competitive advantage amid changing environments.
Question Marks: 15.00
For a firm such as IBM, with the ever-changing market landscape and the emergence of new
technologies, businesses need to continue to evolve. The scope of engagement is highly variable
with no clear strategic direction however, the context of consulting jobs is changing quite
frequently, but consulting success mostly depends on a more useful and tested techniques and
procedures, relevant to an industry, of analyzing the process, clarity about goals, recommending
solutions influencing better institutionalization of effective management processes.
Q 2.2. Which type of competency framework would prove to be better and briefly clarify why?
Question Marks: 15.00
3. What all information can be deduced from the Meta Competencies -7S Grid of a firm and is
consequently used?
OR
Comment on how Competency based HRM is a fitting approach for organisations today? also use
reference of Traditional job analysis vs. Competency Models in your response.
Question Marks: 15.00
Question 4. Refer to few details about the following job profile and answer the questions below:
• Facilitate discussions with the client to elaborate on the areas of proposed improvements
• Define the problem concisely and hypothesize the proposed solution
• Perform quantitative and qualitative analysis to drive the proposed solution
• Quantitative research methodologies include data mining, creating financial models, and
performing valuation analysis
• Qualitative research methodologies include performing market research and collecting
business intelligence
• Consolidate the findings from the analysis and present solutions to the client
• Develop and present a plan to implement the recommended changes
• Support the business development activities of the firm such as pursuit development and
production of thought papers.

4.1 What do you mean by competencies? (5 marks)

4.2 Identify the job-profile name and identify its KSAOs (2 for each element) (10 marks)

4.3 Assuming that Cost-efficient strategy as the key aspect of a firm’s strategy, give two
examples explaining the levels of criteria for the above job, also highlighting the links between
them. (15 marks)

Exam on Learning & Development:

2020-2021

Question 1. Fabrics, Inc., once a small organization, recently experienced an incredible growth.
Only two years ago, the owner was also the supervisor of 40 employees. Now it is a firm that
employs more than 200. The fast growth proved good for some, with the opportunity for
advancement. The owner called you (a L&D consultant) to help him with a few problems that
emerged with the fast growth. “I seem to have trouble keeping my mold-makers and some other
key employees,” he said. “They are in demand, and although I am competitive regarding money,
I think the new supervisors are not treating them well. Also, I received some complaints from
customers about the way supervisors talk to them. The supervisors were all promoted from within,
without any formal training in supervising employees. They know their stuff regarding the work
the employees are doing, so they are able to help employees who are having problems. However,
they seem to get into arguments easily, and I hear a lot of yelling going on in the plant. When we
were smaller, I looked after the supervisory responsibilities myself and never found a reason to
yell at the employees, so I think the supervisors need some training in effective ways to deal with
employees. I only have nine supervisors—could you give them some sort of training to be better?
Actually, I talked to a few other vendors and they indicate they have some traditional basic
supervisor training packages that would fit our needs and, therefore, they could start right away. I
really want this fixed fast,” the owner said.
For the purpose of these questions, focus only on the training aspect of the case

1. Do you agree with the proposal to conduct training as suggested by the vendors? Using concepts
that you know as an L&D consultant, explain your answer. (10 marks)
2. What else might the owner do before choosing a training package? Use information provided in
your L&D course (particularly chapters on Learning & Motivation, Strategic Training and TNA
to describe your approach. Make sure to provide enough detail to demonstrate your understanding
of the key issues and approaches to determining how to proceed once a triggering event has
occurred. (30 marks)
For the purpose of these questions, focus only on the training aspect of the case
3. If training went ahead as indicated, how successful do you think it would be? Explain your
answer using concepts that you have learned. (10 marks)
Question 2: Using theories of learning and motivation learned in class, design a 90-minutes’
session on “Microsoft Excel – Basics” for a group of 30 managers of baby-boomers’ generation
who have limited exposure to technology in their working. Focus on application of learning and
motivation theories. You may opt to choose any one theory or a combination of theories explaining
your reason(s) for choosing each. Make assumptions if you feel information is inadequate and then
list those assumptions. (30 marks)

Question 3: With examples, explain the following:

1. Organisational performance gap (10 marks)
2. P = M x KSA x E (10 marks)
 Sales, Distribution and Retail Management
2020-2021

1. An FMCG company is contemplating the following three compensation plans for the sales
people listed in the table. Which one will you prefer to select and why (give arguments in favor
of your decision)?

Plan A: Give each salesperson a 10% commission on the first $250000 sales for the sales made
each year and 12% on the next $250000 (Capped).

Plan B: Give each salesperson a fixed salary of $10000 each year and a 5% commission of sales
made each year (Uncapped).

Plan C: Give each salesperson a fixed salary of$25000 each year and a bonus of 4% commission
on all sales made over $250000 made in each year.

Name of the salesperson Estimated sales for the

next year ($)
Herndon 300000
Mclean 270000
Menon 310000
Baker 290000
Question Marks: 25.00

2. An area sales manager through his/her managerial behavior can motivate his team members
most - Do you subscribe to this statement? Give arguments. How territory allocation and sales
quota are instrumental in motivating a sales executive? (25 marks)

3. While structuring sales force what are the major managerial considerations you should keep in
mind? What are the pros and cons of various types of sales force structures? Explain with
suitable example. (25 marks)

4. What are the major considerations an area sales manager should have while designing the
sales territories and allocating sales people in the designated sales territory? Explain with
suitable example. (25 marks)
 Exam on Advertising and Brand Management

2020-2021

Part A: Read the caselet and answer the questions.

1. Propose another big idea for a Halls ad and prepare a creative brief on the basis of which a
TV Commercial can be prepared for Halls (10 + 20 = 30 Marks)

2. How Cadburys, the parent company of Halls should evaluate Hall’s brand equity. Mention
the assumptions taken for the evaluation. (20 Marks)

3. Elucidate the brand positioning and brand personality for Halls using appropriate
frameworks (10 + 10 = 20 Marks)

Part B

1. Pick two luxury brands and discuss the strategies adopted by the marketers to create these
brands. Also explain the brand identity of the chosen brands (30 Marks)

CASELET
In April 2013, Cadbury India’s foreign parent acquired Pfizer’s interests in the confectionary
business for $4.2 billion. That included the Warner- Lambert product portfolio, known best for
Halls, Clorets and Chiclets.

The new strategy centers on Halls, a throat lozenge that enjoyed immense popularity in India
until some years ago when it was overtaken by Vicks, Polo and now, Chlormint. Historically,
Halls has been a strong brand in South and West India. That’s probably because, according to
research conducted consumers in those regions prefer the Menthol flavor, rather than just sweet
candy. Cadbury is now planning to aggressively make a dent in the northern and eastern
regions, where awareness levels of the brand Halls have been dismal.

The company is still chalking out its strategies for this, but promotional schemes and heavy
advertising will play an important part. The product’s wrapper too has also been redesigned,
it's now a deep blue pillow pack. And a television advertisement for Halls is already on air,
projecting Halls on the relief, fun and extra refreshment platform. "With Halls being strong in
a few markets, the replication of its position in other geographies will increase its national
share even further," claims the marketing team confidently. But while, Cadbury plans to pull
out the stops to make Halls a successful brand, its important to know the irritations caused to
the brand in the past. Up until the early 1990’s, Halls was one of the leading cough lozenge
brands: industry sources say its brand awareness was as high as 90 percent. But things went
downhill from 1997 onward.
The culprit was a 25 per cent hike in the price of Halls, from 50 to 75 paise. Warner-Lambert
(the then-owner of the brand) did no consumer research before increasing the price of the
lozenge and did not consider the importance of coinage in pricing: it is not difficult to find one
50-paise coin, but the extra 25-paise coin makes all the difference in an impulse purchase. The
results were disastrous.
But that was then, now, as part of the portfolio of Cadbury, the focus remained on enhancing
the brand’s visibility- crucial for an impulse purchase category. For this, the company
introduced long vertical dispensers and jars for storing Halls at even Kirana shops. In what
may appear to be a contrarian move, it also brought down its, advertising spends from about
Rs 18 crore in 1997-98 to Rs 6-7 crore in 2000. But there was a reason: marketing wisdom
dictates that it is better to avoid high ad spends on small category product. The sales network
was also realigned to make it more region-focused with the result that inventory levels came
down from 20 weeks in the mid 1990 to three weeks by 2000. The brand’s visibility efforts
follow a seasonal pattern especially flu season and weather changes.

The next step was a positioning shift in 2001. Since Proctor and Gamble’s lozenge brand,
Vicks was already selling on the medicinal platform of curing coughs and colds (and was sold
mainly through chemists), at times they almost seem to straddle the boundary between candy
and medicine. The company decided to create a distinction for Halls which was evident from
its new ads. From the cough and cold platform, Halls has always targeted young adult men.
And most importantly, brand reverted to the original 50 paise price tag. With the Thandi Saans
ka Blast as the tag line, ad shows crowded railway station in India. The scene opens on a
crowded railway station and zooms in on a bespectacled man. Feeling a slight itch in his throat,
he pops a Halls candy into his mouth. The moment he pops the candy, a snow ball hits his face.
Searching for the source of the snow ball, the man discovers a polar bear approaching him with
another snow ball. Soon, the man and the polar bear start a boogie dance on the busy platform.
According to the ad agency, rationale for the ad was "Since Halls is very cooling as a candy,
it is more fun as a brand than its competitors, the plan was to push forward this extra cooling
effect idea from the campaign using exaggeration."

The company’s efforts did pay off. From a Rs 30 Crore brand in 1999-2000. Halls is now
valued at Rs 40 crore. Industry sources say its market share too has increased to about 30
percent. Now Cadbury plans to take Halls forward and make Halls a winner on the lines of
Chlormint and Vicks.
 Exam on Advanced Marketing Research:
1. Company ‘C’ wants to launch a new product ‘P’ in a new market. Explain whether it is a
“Problem Identification” or “Problem Solving” research. Elaborate the steps needed to be followed
in order to carry this research. (5+5 marks)

2. Distinguish between decision problem and research problem. Why do we need to convert a
decision problem to a research problem? Suppose, the management of an organization needs to
decide whether they should decrease the price of product “P” in order to increase market share.
Describe the steps to convert it to a research problem. Mention the equivalent research
problem. (2+2+4+2 marks)

3. When do you prefer an exploratory research design over a conclusive research design?
Distinguish between exploratory and causal research with examples. Suppose, you want to see the
impact of “Perceived Price” on “Purchase Intention” of a product, which type of research design
would you follow? Justify your answer. (2+2+6 marks)

4. Distinguish between “Focus Groups” and “Depth Interviews”. Suppose, you need to understand
consumers’ perception, preferences and behavior concerning a product category, which type of
research procedure should you embrace? Justify your answer. (4+6 marks)

5. Explain different types of criteria for evaluating survey methods. Mention a suitable survey
method for each criteria factor. (10 marks)

6. What do you mean by extraneous variable? Explain different forms of extraneous variables with
examples. How can we control extraneous variables in a study? (2+5+3 marks)

7. What do you mean by Reliability and Validity of construct? Explain the relationship between
reliability and validity. Suppose you have two constructs named “Perceived Usefulness” and
“Purchase Intention” which are defined and measured as follows –
Perceived Usefulness – The extent to which an individual believes that product “P” will be useful
in his/her life.
Perceived Usefulness is measured using four measurement scale items – PU1, PU2, PU3, and PU4.
Purchase Intention: The extent to which an individual has framed cognizant strategies to purchase
product “P” or restrain from purchasing “P” in the future.
Purchase Intention is measured using three measurement scale items – PI1, PI2, and PI3.

Explain the steps to check the reliability and validity of these constructs (2+2+6 marks)

8. Suppose you are assigned a task to quantitatively explore the factors influencing the selection
of “major subject” in MBA course in India. Which type of sampling would you use in this
research? Justify your answer. You can list down your assumptions. (10 marks)
Question Marks: 10.00
9. Explain with examples the reasons for which the respondents are unable to answer the questions
asked in a survey. How can questionnaire design help in overcoming the respondent’s inability to
answer? Cite suitable examples. (5+5 marks)
Question Marks: 10.00

10. Explain the steps of data collection process. Elaborate the importance of each step. (10 marks)
 Exam on International Financial System
2020-2021
Read the following excerpt from an article and answer the questions that follow:

Question 1
“… A great deal of U.S. currency is held abroad, which amounts to an interest-free loan to the
United States. However, the interest savings are probably on the order of $20 billion a year, a small
fraction of a percent of U.S. GDP, and that “seigniorage,” as it is called, would probably still exist
even if the dollar lost ground to other currencies in more-formal less informal international
transactions. U.S. firms may face slightly less exchange-rate risk in international transactions, but
that benefit should not be overstated since the dollar floats against the currencies of most of our
largest trading partners. The safe haven aspect of the dollar is actually a negative for U.S. firms,
since it implies that they become less competitive (the dollar is stronger) at precisely the times that
global economic conditions are most difficult…” [Author: Ben S. Bernanke (2016)]

1. International finance is argued to exhibit increased scope and complexity as against domestic
finance. State the dimensions that make international finance different. [15 marks]
2. The IMF’s de-facto classification of the exchange rate arrangements identifies as many as ten
categories. Comment on the choice of India and the associated advantages/disadvantages of this
arrangement. [15 marks]
3. Elaborate the argument: “The safe haven aspect of the dollar is actually a negative for U.S.
firms…”. [10 marks]

Question 2 “There will always be crises…” says Professor Portes. “People take risks, they
innovate, invest. Some of those risks go bad. If a lot of them go bad at the same time, you have a
crisis. Historically, there have been dozens and dozens over the centuries…”.
State the factors (external or internal to the financial system) that can ignite financial crises. [15
Marks]

Question 3.
Adhering to the quoting conventions of the foreign exchange market, answer the following:
(a) Given the quote EUR|GBP 0.9000, identify the quote currency.
(b) Given USD|INR 74.8300, state if it is American or European quote.
(c) For an Australian, which of the following is an indirect quote:
AUD|USD 0.7200
USD|AUD 1.3800
(d) Name the currency pair nicknamed as ‘Cable’.
(e) State the revised USD|JPY exchange rate after a one-pip decline in USD|JPY 105.35.
[5*3=15 marks]
Question 4.
Following figures are extracted from India’s Balance of Payments (Apr 2019- Mar 2020):
Net (INR Crore)
Net INR crore
Current Account -171676
Capital Account -7632
Financial Account + 172257
? ?

Identify the fourth item. State the amount that should reflect against the identified item. State in
one word if the Current Account position of India for the first quarter of 2020 reflects deficit or
surplus. [15 marks]

Question 5.
Write a short note on the Corporate Governance scandal of
(a) Luckin Coffee
(b) Yes Bank
[7.5*2=15 marks]

Descriptive Exam - Export - Import Management: A Starter's Tool Kit

(2020-2021)

Refer to the attachment and Question 1 and 2 to be written in not more than 300- 350 words
each.
1. Do you see that we have a competitive advantage of exports of onions In India and why? (30
marks)
Question Marks: 30.00

2. What are the tools used by the policy maker to assuage the situation, like the crisis of onions
in the domestic market. Do you agree with the decisions of the Government? Give reasons
thereof in either case. Refer to the attachment from Question 1

Question Marks: 30.00

3. Consider that you are an exporter M/s India Express Exports Pvt Limited. You are exporting
liquid mosquito repellants from India. You have signed a contract with a retailer in Spain for a
container load of the product. The price of the product is $ 6 per piece FOB. The company is
situated in Delhi and it has decided to export the cargo from the JNPT port.
You as an Export Manager assess and take a full container load which costs you 900 $ for the
freight for JNPT Port to the port of destination in Spain for about 500 pieces. The number of
pieces fit in well into the container along with part of the container being covered by the packing
material. Marine insurance costed about 2 percent of the invoice. The costs for getting the
products to Mumbai is about 10,000 Rupees. What will be the invoice value for the total quantity
he has purchased. (15 marks)
Question Marks: 15.00
4. What will be the duty drawback you will get back in this consignment at an All industry rate
of 12 percent. Which agency disburses the duty drawback to the exporter? (25 Marks)
Question Marks: 25.00

ATTACHEMENT 1

The Onion Economics: Weather Gods Drive Prices, But Our Import-Export Policies Do No
Good Either

India produces a little over 20 per cent of global onion produce.

Onion is not the most nutritionally rich or necessary food to have either. It has about 90 per cent
of water and some flavour.
What is the problem if some people have to pay for higher prices or have to cut down its
consumption temporarily?

Onion prices crossed Rs. 100, on average, in most retail markets and got bought and sold at over
Rs. 200 kg in some places during the last few weeks.

Onion is attracting so much of public, media and government attention as if India were in the midst
of a major economic crisis, bigger than slowing Gross Domestic Product (GDP) or falling
investments. Should the nation be fretting over onion prices?

India produces around 230 lakh tonnes of onion, on an average, 18 kg of onion per person a year;
India produces a little over 20 per cent of global onion production. It is the second largest producer
after China, which produces about 25 per cent of total onions. Egypt and USA are the third and
fourth largest producers, each with about 3-4 per cent of the global share.

India consumes only about 60-70 per cent of the onions produced. Rest is either exported, used
otherwise or wasted. India is the largest exporter of onions in the world, earning over Rs. 3,000
crore in 2018.
China, United States of America and Egypt are the three next largest exporters of onions, earning
about less than half of what Indian exporters earn every year. India is also the lowest-cost producer
of onion; onion prices in India usually are the lowest in the world.

If India produces so much of onion, there is so much surplus of onions produced in India and India
is the largest exporter of onion in the world, why do we have prices shooting up sometimes?
Why do we also have this frenzy and angst forcing the government to take emergency measures
like importing in a hurry and clamping down exports?
India has three crops of onion in a year. Rabi crop, which is harvested in March-May is the largest.
A little over 150 lakh tonnes of total onion production of 235 lakh tonnes last year was produced
in this crop season.
This crop is quite stable in terms of production with very little variation from year to year (except
in the years when farmers decided to cut down on planting on account of extremely low prices in
the year before).
This crop is ‘storable’ also and farmers have developed on farm storage to stock this crop and
release it gradually every month until September-October.
India has two smaller crops of onion — Kharif sown in July-August and harvested in October-
December contributing about 3,035 lakh tonnes or about 15 per cent of the annual crop production,
and late Kharif, sown in December- January and harvested in January-March, producing 40-50
million tonnes on an average or about 20 per cent of annual production.
These two crops see varying production depending upon monsoons, floods, drought or other
climatic catastrophes.
While bulk of the onion crop is produced in Maharashtra, Madhya Pradesh and Karnataka (almost
2/3rd of annual crop), the shrillest cries are heard in Delhi and other northern cities when the onion
prices shoot up.

Wholesale onion prices in Delhi in the first five months (March-July) of the flush season (March-
September) in last four years (including current year 2019) averaged less than Rs. 10 a kg,
recording less than Rs. 8 per kg in almost half of these months.
Onion prices start rising from August (Rs. 35 a kg in 2015, Rs. 20 a kg in 2017, Rs. 17 a kg in
2019) in the wholesale markets of Delhi if trouble is anticipated in the Kharif crop or the farmers
decide to cut down on kharif showing, having received very low prices for their preceding Rabi
crop.

As the crop demand and supply situation gets disturbed for ensuing months (situation gets more
difficult if the late Kharif crop also suffers), the prices start rising much more menacingly.
If the Kharif turns out to be better than anticipated in September-October, or there is good sowing
for late Kharif, the onion prices start reverting to their lower levels from November-December
itself.
In Delhi’s wholesale markets, onion was sold at an average price of Rs. 34.80 and Rs. 38.11 in
2015, but declined to Rs. 21 in November and to less than Rs. 13 in December 2015.
It did not happen this way in 2017. Prices started rising in August 2017 as per the usual pattern
when there was trouble in monsoon rising from Rs. 7.95 per kg on an average in July 2017 to Rs.
19.56 in August and then to Rs. 25.71 per kg in November and Rs. 30.49 per kg in December 2017.
This year again in 2019, onion prices rose to Rs. 16.63 per kg in August and then to Rs. 28.46 in
September and to over Rs. 30 in October.
Pattern of onion prices over the last five years, and even earlier, is so stable and hence so
predictable. The single most responsible reason for the rise in onion prices from August to
December is vagaries of weather.
Traders might take advantage of the situation to make some quick money but they are not
responsible for demand-supply gap in months of shortages, which is entirely weather related,
sometimes accentuated by the farmers receiving too low onion prices.

Onion is not the most nutritionally rich or necessary food to have either. It has about 90 per cent
of water and some flavour. What is the problem if some people have to pay for higher prices or
have to cut down its consumption temporarily?

Indian farmers receive, on an average, the lowest prices in the world for their onion produced.
Why do we have consumers unhappy some times and farmers generally?
Our distorted policies to handle onion production, storage and exports-imports are primarily
responsible for this state of affairs.

Policy makers are primarily driven by the instinct and intent to keep consumers happy. Consumers
must receive onions at less than Rs 15-20 per kg! To ensure this, we have adopted a very restrictive
and ad-hoc export policy.

Two instruments are used — fixing a minimum export price (MEP) and banning the exports
outright.
MEP instrument is deployed as soon as there is a feeling that onion prices might shoot up beyond
Rs 20 a kg in the wholesale markets. An MEP towards the higher end of global prices is fixed to
discourage farmers/traders to export.
Whenever the wholesale prices are likely to go beyond Rs 30-50, an outright export ban is put in
place.
When prices crash, usually when new Rabi crop arrives, the restrictions are relaxed.

This policy needs to be simply junked. Free exports and imports of onions should be permitted
without any MEP. The government should guarantee that no ban on exports would be imposed.
If this policy is adopted, Indian farmers would actually increase the area under onion crop in Rabi,
develop more stable and strong export markets and gradually realise global onion prices.
Wholesale prices might move from the range of Rs. 8-10 in the Delhi market to Rs. 12-15 during
the months of March-July, but these will be much more stable prices throughout the year.
Open imports by farmers groups and private traders (as against government agencies rushing to
make some desperate purchases when onion prices start shooting up and then try to provide to
select Delhi and some other urban consumers at a subsidized rates) will ensure that onion prices
for consumers even in the volatile season (September to December) are stable and low.
Consumer retail inflation data for October was released recently. Retail inflation rose to 5.54 per
cent in November and 4.62 per cent in September.
This was primarily on account of vegetable prices which shot up to 36 per cent. With the weight
of 7.46 per cent in this retail index, vegetable price rise alone contributed a whopping 2.68 per cent
of the 5.54 per cent increase or about 48 per cent of total increase in consumer prices.
Excluding this, which is almost entirely driven by short term factors, retail inflation is less than 3
per cent.
Our sensitivity to inflation is very high. As October inflation data crossed 4 per cent, RBI decided
to pause cutting of policy interest rates. Core inflation in the wholesale price index and retail
inflation, excluding the vegetables, is very well within the range of 2-6 per cent inflation fixed by
the government in 2015, which the RBI is mandated to ensure.
Paul Volcker, who tamed inflation in the US, died last week on 8 December 2019. The inflation is
almost dead in many parts of the world. A number of advanced countries are spending their fiscal
and monetary firepower to somehow raise inflation to 2 per cent a year. Yet, they are not
succeeding despite stacking up a lot of public debt and also expanding the balance sheets of the
Central Banks in pursuit of quantitative easing.
India has a lot of growth to achieve for providing a decent quality of life to its citizens. We got on
to an inflation targeting regime very late in the day, when many countries, which adopted inflation
targeting having seen Volcker’s tighter monetary policies succeeding in taming US inflation of
high two digits, have by now increasingly discarded the same.
The world today is different from what it was in the 1980s. Agriculture and even industrial goods
production globally is in good balance of demand and supply, in fact for many products, supply is
exceeding demand. There is unlikely to be an excessive rise in prices if we don’t follow a very
loose monetary or fiscal policy.
Some odd episodes, like the current onion episode, will keep on happening on account of
temporary factors. Let us not fret over these. Instead, we should build stable agriculture trade
policies for serving farmers and also consumers. Let us focus more on growth than inflation.

(This note was published by former Economic Affairs Secretary Subash Garg on his Linkedin
page)
 Exam on International Management:
2020-2021

Question 1. Many MNCs have secured a foothold in Asia, and many more are looking to develop
business relations there. Why does this region of the world hold such interest for international
management?
Identify and describe some reasons for such interest. (Marks 25)

Question 2. How do different ideologies and political systems influence the environment in which
MNCs operate? What would be the main provisions of a legislation that is developed for the
adoption of electronic commerce? (Marks 25)

Question 3. Why international management should be socially responsive and promote sustainable
business practice? Discuss the main social responsibility challenges faced by MNCs while
operating in different countries. (Marks 25)

Question 4. Former CEO of IBM Louis Gerstner stated, "Culture isn't just one aspect of the game;
it is the game. In the end, an organization is nothing more than the collective capacity of its people
to create value." – Do you agree to this statement? Discuss the challenges faced while building a
multicultural team spanning many different countries. (Marks 25)
 Exam on Procurement Manufacturing Planning & Control

(2020-2021)

1. Explain the difference between Private and Public Procurement? Marks: 15.00
2. Based on the Fuyao Case explain the following concepts for Procurement:

a) Learning Curve Marks: 15.00

b) Value density Marks: 15.00
c) Productivity Yield Marks: 15.00

3. Based on the Nike Case explain the following concepts:

a) Responsible Procurement Marks: 15.00

4. Classify the procurement done by FORE as per the Kraljic Matrix of Strategic Sourcing.

Marks: 25.00

Exam on Advance Project Management:

(2020-2021)

Question 1

a. Why should an organization totally reply on Financial Analysis (ROI) for project selection?
Illustrate with examples. (12.5 Marks)

b. How are the projects linked to the organization strategy? Illustrate with an example. (12.5
Marks)

Question 2

a. Why is it important to assess the culture of an organization before deciding which project
management structure would be appropriate? Give examples. (12.5 Marks)

b. In which situation would you use strong Matrix orgnaition structure and why? Illustrate with
examples. (12.5 Marks)
Question 3

a. What are the elements of Scope Statement? How is Scope liked to Project Charter? Give
examples. (12.5 Marks)

b. What are 10 knowledge areas as per PMBOK? Give examples of these knowledge areas from
”Laying 100 KM Underground Pipeline Case, or any or any other you have studied. (12.5
Marks)

Question 4

You have entered into a contract to build a small vacation hut. If you can complete the project
within 15 days you may receive a bonus of $2000. However it you are late beyond 15 days, you
will have to pay $300 per day as penalty. Draw a network diagram based on information given
below. Find out the critical path and project duration using ES, EF and LS, LF and Slack. Do you
expect to get a bonus or a penalty and how much?

Activity No Description Predecessor Duration ( Days )

A Build Foundation None 3
B Erect Frame A 4
C Erect roof B 4
D Fix Windows B 1
E Fix Doors B 1
F Electrical Wiring B 3
G Rough in frame C,D,E,F 2
H Fix Door Opener E,F 1
I Painting G,H 2
J Cleanup and Finish I 1
Question Marks: 25.00
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