SMU MBA WINTER 2016-2017

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DRIVE WINTER 2016

PROGRAM MBA
SEMESTER IV
SUBJECT CODE &
NAME
MA0043/MBF 304
CORPORATE BANKING

1 Explain the Letters of Credit mechanism practiced in international banking.

Letters of Credit mechanism in international banking

Answer: Letters of Credit Mechanism

Any business/industrial venture involves purchase transactions related to machine/other
capital goods and raw material etc., and also sale transactions related to the products. The
customer

2 Compare and contrast financial and operating lease.

Financial and operating lease

Answer: Financial Lease

One of the fundamental features of a financial bank lease is a condition in accordance with
which the lesser agrees to transfer the title for the asset at the completion of the lease period
at a nominal cost. This kind of lease also gives an option to the lessee to purchase the utilized
asset when the

3 How do the commercial banks evaluate term loan credit proposals ?

Evaluation of term loan credit proposals by banks

Answer: A banker basically assesses the viability and feasibility of a project on the
followingfour parameters:
(i) An assessment of the management, operation process and backgroundof the firm.
(ii) An analysis of financial statements.
(iii) Analysis of

4 Venture capital is the leading source of finance that meets the needs of start-
upenterprises. Explain the concept of venture capital and justify the above statement.
Role of venture capital to finance start up enterprises

Answer: Venture capital (VC) is the leading source of finance to meet the requirements of
new entrepreneurs. Usually the return on investment varies, and such types of financing aids
in buy-outs, acquisition projects, joint ventures, start-up projects, trade expansion projects,
and even in business turnarounds. These projects happen to be widely technological in
approach. This kind of

5 Explain the role of Hypothecation, Pledge, Assignment and Mortgage in corporate

finance.
Role of Hypothecation, Pledge, Assignment and Mortgage in corporate finance

Answer: Hypothecation: As per Securitization and Reconstruction of Financial Assets and

Enforcement of Security Interest Act of 2002 (Section 2n), hypothecation has been defined as
a charge in or upon any movable property, existing or future, created by a borrower in favour
of a secured

6 Explain some of the important exchange rate quotes in foreign exchange transactions
made by banks.
Important exchange rate quotes in foreign exchange mechanism

Answer: Important exchange rate quotes

(i) Spot and forward rates: The current exchange rate of a spot transaction is known as
the spot rate. In a spot transaction, the settlement is usually done within two
business days and such rates are called forward rates. The forward transactions
therefore involve a delivery date in the future, which may extend even up to a year.
As the

SMU MBA WINTER 2016-2017

Dear Students,

SMU MBA WINTER 2016 Assignments are available. For Booking ,Kindly mail us on

kvsude@gmail.com OR call us to +91 9995105420 or S M S your Email ID us in

the following Format On +91 9995105420 we will reach back you with in 24H