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Krishna University

Machilipatnam

3rd semester M.B.A Examination (Regulation 2010-2012)

MBA 307F Financial markets and stock exchanges

Section A

Time: 3hrs Max marks: 70M

 Answer the following questions. All questions carry equal marks.

5X10=50M

UNIT I

1) Justify the statement “ The economic development of any country depends upon the existence of a

well organized financial system”. 10M

Or 

2) How does SEBI protect the interest of the investors? 10M

UNIT II

3) In what way NBFCs are able to bridge the credit gaps which the banks are

unable to fulfill? 10M

Or 

4) Explain the scope and importance of financial services in India. 10M

UNIT III

5) What are the various methods of floating securities in new issue market? 10M

Or 

6) Describe the importance of guilt-edged securities market in Indian

securities market. 10M

UNIT IV

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7) Define a money market. List down the money market instruments and

state their features in brief. 10M

Or 

8) Write a detailed note on

a) Commercial bill market 5M

b) Treasury bill market 5M

UNIT V

9) ”Mutual funds provide stability to share prices, safety to investors and resources to prospective

entrepreneurs”. Discuss. 10M

Or 

10) Explain the important phases of insurance business in India 10M

Section B

Case study is compulsory 1X20=20M

 Yet another monsoon season was approaching; but Joshuna Begum (Begum) unlikeher neighbours was not worried about her house getting damaged during the

monsoon. Her house now had a tin roof, mud walls and wooden windows, a luxury in

rural Bangladesh.

Earlier, Begum's house had a straw roof and bamboo walls, which used to get

damaged in the monsoon season, forcing the whole family to live in the kitchen. She

got her hut repaired with a loan from the Bangladesh Grameen Bank (Grameen

Bank). Begum wasn't the only one; there were thousands of people in rural

Bangladesh who had improved their living conditions with the help of the

microfinance programs of Grameen Bank, a pioneer in micro finance. Grameen Bank

helped thousands of poor Bangladeshi women to improve their lives by extending

loans to them to start their own enterprises. By 2003, it was reported that between

33-48% of Grameen Bank borrowers had moved above the poverty line.

By 2003, with 1,170 branches across Bangladesh, Grameen Bank was seen as a role

model for microfinance all over the world. The Grameen Bank model was replicated

across the world -- not only in developing countries like India, Pakistan, and

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Vietnam, but even in developed countries such as Australia and the USA, where

similar schemes were set up to improve the lives of the urban poor .

However, the Grameen Bank also attracted criticism from the media and

economists all over the world.

Analysts pointed out that there was no proper monitoring of how the loans were

utilized; it was reported that the loans availed of by women were used largely for

consumption rather than for investment purposes.

Analysts also pointed out that the accounting methods used by Grameen Bank were

not in accordance with industry standards, and that the bank did not provide full

details about its financial position and loan repayments position.

Answer the following Questions:

1) Do you think monitoring by micro finance institutions is needed? If so, howwill it benefit MFIs and rural poor?

2) How can micro finance be useful for a developing country like India?3) What are the possible causes for criticism on Grameen bank?4) Why most of the banks and financial institutions are reluctant to include

microfinance schemes in their operations. ?