Question No.1 - MMPC-005 - Quantitative Analysis for Managerial Applications - MBA and MBA (Banking & Finance)

Solutions to Assignments

                            MBA and MBA (Banking & Finance)

                    MMPC-005 - Quantitative Analysis for  Managerial 

                                                Applications

Question No. 1

Calculate the arithmetic mean from the following data:- 

C.I.         f 

50-59     1 

40-49     3 

30-39     8 

20-29     10 

10-19     15 

0-9          3        

MMPC-005 - Quantitative Analysis for Managerial Applications - MBA and MBA (Banking & Finance)

Solutions to Assignments

                            MBA and MBA (Banking & Finance)

                    MMPC-005 - Quantitative Analysis for  Managerial 

                                                Applications

Question No. 1

Calculate the arithmetic mean from the following data:- 

C.I.         f 

50-59     1 

40-49     3 

30-39     8 

20-29     10 

10-19     15 

0-9          3                             CLICK HERE

Question No. 2. 

Explain the concept of probability theory. Also, explain what are the different approaches to probability theory.                           CLICK HERE

Question No. 3. 

Of a large group of men, 5% are under 58 inches and 40% are between 58 and 65 inches. Assuming a normal distribution find the mean height and standard deviation.                           CLICK HERE

Question No. 4. 

“Time series analysis is one of the most powerful methods in use, especially for short-term forecasting purposes.” Comment on the statement.                           CLICK HERE

Question No. 5. 

Write the short note on any three of the following:- 

(a) Mathematical Property of Median 

(b) Decision Tree Approach 

(c) Stratified vs. Cluster Sampling 

(d) Pearson’s Product Moment Correlation Coefficient                          CLICK HERE

Question No. 5 - MMPC-003 - Business Environment - MBA and MBA (Banking & Finance)

Solutions to Assignments

                           MMPC-003 -  Business Environment

Question No. 5                                        

Write short notes on the following: 

 a) Balance of Payments (BoP) 

The balance of payments (BOP), also known as the balance of international payments, is a statement of all transactions made between entities in one country and the rest of the world over a defined period, such as a quarter or a year. It summarizes all transactions that a country's individuals, companies, and government bodies complete with individuals, companies, and government bodies outside the country.

The balance of payments (BOP) transactions consist of imports and exports of goods, services, and capital, as well as transfer payments, such as foreign aid and remittances. A country's balance of payments and its net international investment position together constitute its international accounts.

The balance of payments divides transactions into two accounts: the current account and the capital account. Sometimes the capital account is called the financial account, with a separate, usually very small, capital account listed separately. The current account includes transactions in goods, services, investment income, and current transfers.

The capital account, broadly defined, includes transactions in financial instruments and central bank reserves. Narrowly defined, it includes only transactions in financial instruments. The current account is included in calculations of national output, while the capital account is not. 

If a country exports an item (a current account transaction), it effectively imports foreign capital when that item is paid for (a capital account transaction). If a country cannot fund its imports through exports of capital, it must do so by running down its reserves. This situation is often referred to as a balance of payments deficit, using the narrow definition of the capital account that excludes central bank reserves. In reality, however, the broadly defined balance of payments must add up to zero by definition.

In practice, statistical discrepancies arise due to the difficulty of accurately counting every transaction between an economy and the rest of the world, including discrepancies caused by foreign currency translations. 

Balance of payments and international investment position data are critical in formulating national and international economic policy. Certain aspects of the balance of payments data, such as payment imbalances and foreign direct investment, are key issues that a nation's policymakers seek to address,

While a nation's balance of payments necessarily zeroes out the current and capital accounts, imbalances can and do appear between different countries' current accounts. The U.S. had the world's largest current account deficit in 2020, at $647 billion. China had the world's largest surplus, at $274 billion.

b) Corporate Social Responsibility (CSR) 

Corporate Social Responsibility (CSR) is the idea that a company should play a positive role in the community and consider the environmental and social impact of business decisions. It is closely linked to sustainability − creating economic, social, and environmental value – and ESG, which stands for Environmental, Social, and Governance. All three focus on non-financial factors that companies, large and small, should consider when making business decisions.

In recent years, there has been a shift from CSR to social purpose. Many companies have pivoted from having a community investment strategy and a ‘nice to have’ mindset to adopting a holistic approach in which their mission is built into everything they do.

CSR can involve a broad scope of approaches and initiatives—everything from sustainable practices to community involvement. Customers increasingly expect responsible behaviour from companies they do business with.

CSR initiatives can range from philanthropy to operational changes and even transforming your entire business strategy or model.

1. Donations and sponsorships

You can donate time and/or money to causes that are meaningful for your business, employees and community.

2. Operational initiatives

Operational CSR initiatives are often oriented around improving business efficiency or performance in ways that also have positive social or environmental impacts in the wider community. Initiatives can fall into several categories, here are a few examples.

Environmental:

reduce your carbon footprint

improve energy efficiency

reduce waste, water use and emissions

Social:

deal with diverse, local and socially responsible suppliers and partners

consult community stakeholders about business decisions

support community initiatives

Workplace:

improve workplace diversity, equity and inclusion

enhance workplace health and safety

develop a code of ethics for your business and eliminate workplace harassment and discrimination

3. Strategic transformation

Some CSR initiatives can involve a wholesale transformation in a company’s business strategy or model to integrate social or environmental goals as a key priority.

Many businesses imbed impact or purpose into their business model. You may hear this referred to as social enterprises, purpose enterprises, and coops. They place social or environmental goals at the heart of their mission and business strategy. These companies are still businesses that seek a profit, but they also formally pledge to focus on a “double bottom line” or even a “triple bottom line”—tracking profits along with social and/or environmental impacts.

An example is B Corps—certified “Beneficial corporations” that follow a rigorous process to assess their environmental, social and governance performance.

Businesses have a variety of reasons for pursuing CSR. Here are some common benefits:

- improved employee productivity, engagement, talent acquisition and retention

- lower costs and reduced waste

- enhanced community support, branding and customer loyalty

 c) Tax Reforms 

Tax reform is generally undertaken to improve the efficiency of tax administration and to maximise the economic and social benefits that can be achieved through the tax system. A tax itself can be defined as ‘a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state, or the functional equivalent of a state’ (Granger, 2013, p. 1). Taxes can include direct taxes on income and wealth (e.g. personal and corporate income taxes, property tax), and indirect taxes on consumption (e.g. Value Added Tax (VAT), excise duties).

There has been increasing global and donor interest in developing country domestic revenue mobilisation, and in particular taxation (Mascagni et al., 2014; Fjeldstad, 2014). There is growing recognition of the role of taxation in state-building, in terms of enhancing state capacity and state-society relations (see Statebuilding). The 2008 financial crisis brought about a temporary fall in aid levels, and a renewed focus by donors on aid effectiveness and ensuring that donors support rather than discourage developing countries’ own revenue-raising efforts. Some activists (e.g. Byanima, 2014) also argue that the current international tax regime is dysfunctional, creating a race to the bottom to offer favourable, but infeasible, tax conditions to attract investment which further exacerbate inequality.

Tax reform can reduce tax evasion and avoidance, and allow for more efficient and fair tax collection that can finance public goods and services. It can make revenue levels more sustainable, and promote future independence from foreign aid and natural resource revenues (see Sustainable revenue and reducing aid and natural resource dependence). It can improve economic growth (see Economic growth) and address issues of inequality through redistribution and behaviour change (see Inequality and redistribution).

Tax reform is the process of changing the way taxes are collected or managed by the government and is usually undertaken to improve tax administration or to provide economic or social benefits. Tax reform can include reducing the level of taxation of all people by the government, making the tax system more progressive or less progressive, or simplifying the tax system and making the system more understandable or more accountable.

Numerous organizations have been set up to reform tax systems worldwide, often with the intent to reform income taxes or value added taxes into something considered more economically liberal. Other reforms propose tax systems that attempt to deal with externalities. Such reforms are sometimes proposed to be revenue-neutral, for example in revenue neutrality of the FairTax, meaning they ought not result in more tax or less being collected. Georgism claims that various forms of land tax can both deal with externalities and improve productivity.

 d) Farm Reforms 2020

In 2020, thousands of farmers and their families camped on the three borders of the country’s capital city for months. They were protesting the government’s three agricultural reform bills that were passed hurriedly through Parliament, without following due process.

In short, the bills:

a) allow farmers to sell directly to private buyers, rather than at the notified government markets, or mandis;

b) provide a legal framework for farmers to enter into contracts with companies and produce for them;

c) allow businesses to store essential commodities, cereals, pulses, etc. without any limits on how much they can store.

These laws were mostly seen as designed to suit the interests of large corporates, and would leave farmers exposed to private buyers with far more money and influence to manage prices.

When the protests broke out, the farmers said they were not consulted before these reforms were made. The government stated that there had been many consultations over the last twenty years, and that the protestors did not represent all farmers. The government also suggested that the protesting farmers had political motivations. Along with the reforms themselves, people were also unhappy with the undemocratic manner in which they were implemented.

Below is an excerpt from an episode on IDR’s podcast, On the Contrary, where host Arun Maira speaks with Kavitha Kuruganti and Siraj Hussain about the agricultural reforms, and the space that was (or was not) created for democratic processes to take shape. Kavitha is a social activist known for her work on sustainable farm livelihoods and farmers’ rights. Siraj is a former secretary of the Department of Agriculture and the Department of Food Processing.

In 2020, thousands of farmers and their families camped on the three borders of the country’s capital city for months. They were protesting the government’s three agricultural reform bills that were passed hurriedly through Parliament, without following due process.

In short, the bills:

a) allow farmers to sell directly to private buyers, rather than at the notified government markets, or mandis;

b) provide a legal framework for farmers to enter into contracts with companies and produce for them;

c) allow businesses to store essential commodities, cereals, pulses, etc. without any limits on how much they can store.

These laws were mostly seen as designed to suit the interests of large corporates, and would leave farmers exposed to private buyers with far more money and influence to manage prices.

When the protests broke out, the farmers said they were not consulted before these reforms were made. The government stated that there had been many consultations over the last twenty years, and that the protestors did not represent all farmers. The government also suggested that the protesting farmers had political motivations. Along with the reforms themselves, people were also unhappy with the undemocratic manner in which they were implemented.

Below is an excerpt from an episode on IDR’s podcast, On the Contrary, where host Arun Maira speaks with Kavitha Kuruganti and Siraj Hussain about the agricultural reforms, and the space that was (or was not) created for democratic processes to take shape. Kavitha is a social activist known for her work on sustainable farm livelihoods and farmers’ rights. Siraj is a former secretary of the Department of Agriculture and the Department of Food Processing.

Question No. 4 - MMPC-003 - Business Environment - MBA and MBA (Banking & Finance)

Solutions to Assignments

                           MMPC-003 -  Business Environment

                            MBA and MBA (Banking & Finance)

Question No. 4                                       

How does technological advancement impact international business environment. Discuss. 

In the past decade, technology has grown exponentially and has affected our everyday way of life and impacted almost every industry, including international business. Technology is ultimately what makes thriving international trade and businesses possible, and without technology, international business would be slow, tedious and time-consuming.

Technology is no longer reserved for specific countries or certain groups of people. These days, even the average person has access to some form of technology, which has aided the technological and international business revolution.

a. Telecommunications

Not so long ago, there was a time where writing letters was the only way to communicate with your international business connections. These letters could take days, weeks, and even months to reach their destination. But now, look at where technology has gotten us! We’re able to send messages and emails instantly and interact through platforms like Skype and Zoom.

Telecommunications technology is what makes running an international business doable. It’s necessary for sending invoices, dealing with customers, communicating with suppliers, and keeping in touch with employees that may live in other parts of the world.

b. Social media

It could be said that social media is a branch of telecommunications, but it deserves attention of its own as social media has given international business a platform from which it can skyrocket. Social media keeps tabs on global trends in fashion, decor, art, furniture, and a wide variety of other products, which provides international businesses with impressive insight.

Whether it be Instagram, Facebook, Linked In, or others, having a social media account allows international businesses to connect with their target audience worldwide and advertise their products to them. Where once people would not be exposed to businesses from other countries, social media has made it easier than ever to stumble upon businesses from all over the world.

c. Transportation

There have been several major advances in transportation in the last 80 years or so. No one wants to wait months for their international order anymore; that’s because commercial jet craft has made transporting products to different areas of the globe affordable and timely.  Customers these days are all about instant gratification, so there is a major emphasis on getting orders shipped as quickly as possible.

The explosion in air travel and airports worldwide has also made travelling for business people more accessible and created a huge rise in the travel industry, creating opportunities for many international businesses.

d. Production

If you’re an international business that sells products, you would have directly benefited from the latest innovations in production. Technology has played a major role in the production processes we know today and associated processes such as production planning, financial planning, and marketing. Thanks to technology, companies may have production and manufacturing plants in several different countries, and you can choose where to create your manufacturing plant based on where materials are easily sourced and where skilled labour is affordable.

e. Market globalisation

Market globalisation began forming its roots when it became more affordable and feasible to transport and sell goods in different countries. The internet is seen as a low-cost market globalisation network in an electronic form. Because of social media, television, and the low costs involved in transporting products around the world, there has become a sort of convergence in consumer preferences and tastes. For instance, there was once a time when only Americans wore jeans, but now people worldwide are interested in buying and wearing jeans, and that is how market globalisation works. The same thing goes for brands such as McDonald’s, Pizza Hut etc.

A global culture is created in which different countries begin having similar lists of wants and demands.

f. eCommerce

eCommerce platforms are platforms or websites that specialise in selling products online, usually to an international audience. Over the years, we have seen many advances in eCommerce technology. As a result, we are at a point where almost anyone can make their own eCommerce site with very little trouble, thanks to all of the templates and applications out there. This gives the average person, as well as multi-million dollar corporations, the opportunity to have their goods online and available to be sold.

eCommerce platforms are usually fully integrated with shipping, payment, customer service, etc.

g. Online banking

Pay instantly with the click of a button! Technology has played a significant role in online banking, and we have seen tremendous growth in just the past few years. Paying online, no matter where you’re located in the world has truly become easier than ever before, and there are so many options available to you! You can use your credit card, payment solutions such as the popular Paypal, as well as digital currencies like Bitcoin in some instances. In addition, exchange rates and payment fees have become lower, making shopping internationally easy and affordable.

Whether you’re a customer buying a pair of shoes online or an international business owner who needs to pay his suppliers and employees, online banking and payment services have made payments exceptionally convenient.

Technology plays a major role in the security behind all online transactions.

The future of international business

Technology is always evolving, and things in the international business landscape won’t ever stay the same for very long. While it is always impossible to predict the future exactly, as business experts, we expect to see trends in international business leaning more towards services than products, the inclusion of digital currencies as forms of payment, and an emphasis on eco-friendliness and transparency.

Question No. 3 - MCO-04 - BUSINESS ENVIRONMENT - Master of Commerce (M.Com) - 2nd Year

Solutions to Assignments 

MCO-04 - BUSINESS ENVIRONMENT

Master of Commerce (M.Com) - 2nd Year

Question No. 3

Distinguish between the following: 

(a) Primary capital market and Secondary capital market 

S.NO.	PRIMARY MARKET	SECONDARY MARKET
1.	A primary market is defined as the market in which securities are created for first-time investors.	On the other hand, the secondary market is defined as a place where the issued shares are traded among investors.
2.	The company issues the shares, and the government interferes in the process.	There is no interference of the government or the company.
3.	The primary market is called as a new issue market.	The secondary market is an aftermarket.
4.	The buying and selling of shares takes place among the investors and the companies.	The trading take place only among the investors.
5.	The primary market provides finance to the companies who want expansion and growth.	The secondary market does not provide financing to the companies.
6.	Underwriters are involved in the intermediary process.	Brokers are involved in the intermediary process.
7.	The prices in the primary market do not fluctuate, i.e., they are fixed.	On the other hand, the prices fluctuate a lot in the secondary market because of the demand and supply.
8.	The products in a primary market are limited, i.e., they include IPO and FPO.	Shares, debentures, warrants, derivatives, etc., are the kind of products offered in the secondary market.
9.	The purchase process happens directly in the primary market.	The company issuing the shares do not involve in the purchasing process.
10.	The frequency of buying and selling is limited, i.e., the investors can invest once in the market.	On the other hand, the frequency of buying and selling is quite high, i.e., the investors can trade as many times as they wish to.
11.	The beneficiary in the primary market is the company.	The beneficiary in the secondary market is the investor.
12.	The primary market is not organized.	The secondary market has an organized setup.
13.	The companies issuing shares and debentures have to follow all regulations.	The investors in the secondary market follow the rules provided by the stock exchanges and the government.
14.	The major disadvantage of the primary market is that it is very time-consuming and costly.	The major disadvantage of the secondary market is that the investors can incur huge losses due to price fluctuation.

So, these are some of the significant contrasting points between the primary market and the secondary market. It is essential to note that both primary and secondary markets help in earning profits and providing funds to the companies and investors.

(b) Speculative Transaction and Investment transaction 

Critical Differences Between Investment and Speculation

1. An investment involves an asset with the hope of securing returns over the principal amount in the future. On the other hand, speculation involves conducting a risky financial transaction to make large-scale gains from a single transaction.

2. Investments are generally held for an extended period, usually more than a year. Instances like real estate and life insurance are held for 25-30 years. Speculation is held for a brief period, usually less than a year, and can even be on a forthcoming event.

3. The amount of risk assumed is relatively moderate as compared to speculation. Speculation will focus on getting high returns in a relatively shorter amount of time, and thus, the quantum of risk is very high. Since investment is mainly made by the middle class working for the community, they would be putting the spare money off their hard work, which they expect to earn a stable return. They are ready to part with their savings if it offers a definite return.

4. An investor will be using their funds for investing, whereas speculators will use borrowed funds and lure the borrowers with attractive returns.

5. The above point also reflects the attitude of the investors and speculators. Investors will generally follow a cautious and conservative approach while considering the investment and the risk appetite

 they can absorb. Speculators believe in an aggressive approach highlighting attack but careless attitude. As the returns are far too attractive, and the window of opportunity is very small, this behavior will easily get reflected.

6. Investors expect to profit from the change in the value of an asset, whereas speculators focus on extracting profits from price changes due to demand and supply forces.

7. While making decisions, investors will conduct extensive research and focus on the fundamental factors of the company, such as the financial position, ratio analytics, etc. In contrast, speculative decisions are based on technical charts, market dynamics, and personal opinions/tips received.

8. The avenues for considering investment will focus on the Blue chip companies of the stock market, savings bank accounts, provident funds, etc. Still, speculators will focus on the commodity market, options trading, betting, etc.

9. Investment does not give rise to practices such as insider trading or possible leakage of information, which can be observed in speculative activities since their returns are lucrative.

10. The level of patience and sacrifice is relatively large in the case of investment but not in the case of speculation. However, the probability of losses does multiply in speculative activities.

11. Investment activities are recorded separately in a firm’s balance sheet of a firm , but speculation is not recorded separately. Depending on the returns that they offer, such activity may either be classified under-investment or the category of ‘Other Assets / Miscellaneous Income.’

12. The amount of money for investing activities is relatively less and depends on the ability of the individual/ organization, but speculation requires large funds for executing the activities.

SPECULATION	INVESTMENT
Meaning
Executing a dangerous monetary exchange or venture or investment with the assumption for high benefit making that can go wayward.	Purchasing of a share or an asset or anything for getting steady returns or benefits.
Investors’ Point of View
Indiscreet and forceful conduct.	Wary and helpful.
Presumption of the Returns
An undeniable degree of profits and benefits with high disappointment is the likelihood.	Unassuming and nonstop with a low likelihood of disappointment.
Level of Risk
The risk and likelihood of disappointment are high in speculation.	The gamble level is moderate in contributing.
Similitude
The reason for speculating is additionally to acquire high benefits.	The principal point of putting is to acquire benefits later on.
Time Horizon or Duration
Speculations are like shortcuts and take less time to give outcomes. But these outcomes can go one way or another.	Venture takes significant stretches to give results.
Examples
Betting, momentum contributing, development stocks, foreign monetary standards, digital forms of money.	The financial exchange, saving accounts, Government securities, factor contributing, shared assets, and so on.

The history of the business market has numerous instances of burst bubbles that had critical monetary ramifications for individuals who decided to estimate on any expectations or speculate of consistently expanding stock costs and speedy wealth. Investing is generally not quite the same as speculation. At times speculative choices are expected to support the benefits of a business.

Yet, with the increment of speculative exchanges, the risk factor likewise increments. Knowing the distinction between speculation and investment is vital for your business and benefit-making. Doing one’s own statistical surveying and assessment work, depending on decisive reasoning, and addressing the tried and true way of thinking is the most ideal choice that can work for an individual.

(c) Budla system and Equity derivative

Distinction between Budla System and Equity Derivatives

The settlement system in specified securities providing for carry forward of transactions from one

settlement day to another has been known as budla system and the charges paid for carry forward

termed as budla charges (contango or backwardation) the amount of which depended upon the

class of security, its quantity, the amount involved and the interest rate prevailing in the market at

the time of the transaction. All along, it had been felt that this system led to excessive speculation

and, at times, to certain malpractices like price rigging, evasion of margins, and non-reporting of

transactions. Hence, it was abolished in December, 1993. This led to a halt in trading of specified

securities with carry over facilities and sharp decline in turnover on the stock markets resulting in a

liquidity crunch. So, efforts were made to reintroduce the system in its revised and modified form

subject to certain conditions and precautions. But, somehow, they did not click because of the

inherent weaknesses of the system and a clamour for adopting other risk hedging devices. The

experts preferred equity derivatives, in the form of futures and options as prevalent in advanced

countries. As a result, in June 2000, index futures were launched at BSE and NSE followed by its

other variants like index options, stock futures and stock options. It may be noted that NSE

accounts for more than 90 per cent of India's equity derivatives volume which is largely due to its

effective monitoring, surveillance, netting timely settlement and minimisation of settlement risks

with the help of National Securities Clearing Corporation Ltd. (SSCCL) which offers high quality

risk mitigation in settlement.

It may be noted that options are not all like budla. An option refers to a contract which gives the

investor (its holder) a right, not the obligation, to buy or sell the specified quantity of a share at a

specified price on or before a specified time called expiry date. However, future may seem like

budla to some as just like a forward contract, it is a contractual obligation to buy or sell a standard

quantity of a share at an agreed price at a future date. But, unlike budla where cash market and all

future prices are mixed up in one price, the future markets trade differ from the cash market sc that

each future prices and cash prices are different. Future markets, also do not have any counter

party risk through the institution of the clearing house which guarantees the trade coupled with

margining. This eliminates the risk premium which is embedded inside budla financing charges. Moreover, in case of budla expiration date is unclear moving from one settlement date to another,

while in case of futures the expiration date is predetermined and the holder is under obligation to

settle the transaction.