LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

KP 41

M.Com. DEGREE EXAMINATION – COMMERCE

SECOND SEMESTER – April 2009

CO 2811/CO 2807 – INDIAN SECURITIES MARKET

Date & Time: 20/04/2009 / 1:00 – 4:00 Dept. No. Max. : 100 Marks

SECTION-A

(Answer ALL questions) (10×2=20)

Give the expansion of ICRA and CRISIL.
What do you understand by derivatives?
Who are allowed to function as merchant bankers?
What is listing?
What do you mean by “volatility”?
Define “Hedging”.
Give the names of any two leading power sector companies on the basis of Profitability.
What is market index?
The price of a company’s stock on 10^th may 2008 was Rs.880.The price on 3^rd June 2008 was

Rs.1020 and dividend received during the year was Rs.13 per share. Calculate the rate of return on

the stock?

Price of the bond = Rs.1,000.

Maturity value = Rs.1,200.

Calculate the holding period return.

SECTION-B

(Answer any FIVE questions) (5×8=40)

Operations in India.

What is rights issue? State the advantages of rights issue.
Briefly explain the conditions to be fulfilled for the registration of merchant bankersIn India.
Compare and contrast between Forwards and Futures.
State and explain the various powers of stock exchanges to make Bye-laws.
a) A wants to buy a share and hold it on for 5 years. He estimates Rs.8 as dividend to be paid by

the company continuously for the next 5 years. He hopes to sell the share at Rs.100 at the end of

the 5^th year. What is the present price? His required rate of return is 20%. (4-marks)

Find out whether his expectations are fulfilled or not. His expected return on investment

is 25%. (4-Marks)

18.a) An investor buys NIFTY Futures contract for Rs.2,80,000 (lot size 200 futures). On

The settlement date, the NIFTY closes at 1,378.Find out his profit or loss, if he pays

Rs.1,000 as brokerage. What would be the position, if he has sold the futures

contract? ( 4- marks)

b) The shares of Lookmen Ltd, are being traded at Rs.250 on BSE. Its futures for 1 month, 2 months

and 3 months are also available on the BSE. If the risk free rate is 12% p.a and no dividend is

expected during the period, what should be The equilibrium price of these futures? (4-marks)

SECTION-C

(Answer any TWO questions) (2×20=40)

Briefly explain the various reforms introduced in the Primary market operations in India.

20 a) Explain in detail the salient features of OTCEI with the benefits of getting OTCEI listing for

the Investors. (12-marks)

Bring out the advantages of credit rating to various parties involved in the Investment activities..

a) Discuss the procedure adopted for clearing and settlement of transactions by National

Securities Clearing Corporation Limited (NSCCL)

b) 9% bond (life 5 years) is issued by a company at 90%.It is redeemable at a Premium of 5%.

Find out the post-tax YTM for the investor, whose Marginal Income tax rate is 30% and capital

gain tax rate is 10%.