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rchgiri

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CSoC King
CSoC King
Dear Friends,

In CS Professional New Syllabus, Financial Treasury and Forex Management (Module 2 Paper No. 5) contains 52 Marks on Theory Questions and 48 Marks on Problem Questions as per CS Professional Programme June 2015 Exam.

Please find the past questions containing 52 - 60 marks of CS Professional: New Syllabus: P 5 for the benefits of the CS Professional students.


Comment on any four of the following :

CS PP December 2011
(i) It is not always necessary that inventory is held for smooth manufacturing and sales operations.
(ii) Capital rationing does not always lead to optimum results.
(iii) Corporate taxation creates incentive for advancement to the company by utilising borrowed funds for financing its growth schemes.
(iv) Financial gearing is a double-edged sword.
(v) Financial policy and corporate strategy are most significant concerns of top management.

(c) How do firms manage economic risk due to fluctuations in forex market?

CS PP June 2011

(i) A treasury manager has a significant role to play in the overall functioning of a firm.
(ii) A firm’s stock price is not related to its mix of debt and equity financing.
(iii) Depreciation is a source of internal finance.
(iv) A stable dividend policy is always preferable to fluctuating dividend policy.
(v) Risk and uncertainty are quite inherent in capital budgeting decisions.

CS PP December 2010
(I) Dividend policy is strictly a financing decision and payment of cash dividend is a passive residual.
(ii) Depository system functions very much like banking system.
(iii) Accounting profit does not take into account a1 costs of capital invested in business.
(iv) The mark-to-market process is lengthy for index futures.
(v) Financial gearing is a fair weather friend.

CS PP June 2010
(i) While deciding upon the capital structure, the firm has to consider the different life cycle stages.
(ii) Financial services industry encompasses a considerable range and depth of activities.
(iii) Tools and techniques of treasury manager are very specific.
(iv) Traditional approach of business finance considers efficient utilisation of resources.
(v) Playing with float is a risky proposition.

CS PP December 2009
(i) Financial sector acts as conduit for the transfer of financial resources from net savers to net borrowers.
(ii) Under capital rationing, the standard net present value (NPV) decision rule no longer holds true.
(iii) Most businesses need cash funds to meet contingencies.
(iv) Apart from the retention of profits and capitalising the accumulated earnings, the bonus shares serve several other objectives.
(v) Foreign exchange risk can be managed both internally and externally.

CS PP June 2009
(i) Failure of a firm is technical if it is unable to meet its current obligations.
(ii) In addition to transaction motive, more motives force corporate to hold inventory.
(iii) CAPM is a tool to workout cost of equity.
(iv) ‘Counter party risk’ is faced in forward transactions.
(v) The function of treasury management is concerned with both macro and micro facets of the economy.

(c) “Discounted cash flow is very close to economic value added.” Comment.

CS Final June 2010
(i) “Beta of a security can also be negative.” Comment.
(ii) “Internal treasury control is a process of self-improvement.” Explain.
(iii) “Optimal investment decisions need to be made taking into consideration specific factors.” Explain.
(iv) “Depository system has unique advantages for investors, brokers and issuing company.” Discuss.
(v) “Public deposits have more benefits for issuing companies and investors than merely sharing the spreads of financial intermediaries.” Discuss.

CS Final December 2009
(i) Economic value added represents real profit,
(ii) Sensex is a barometer to economic progress of a nation.
(iii) Current asset policy and current asset financing reflect working capital policy,
(iv) There is a conflict of goals between management and owners.
(v) The concept of Economic Order Quantity (EOQ) is losing its importance for the companies managing their business strategically.

CS Final June 2009
(i) The optimum dividend policy should strike a balance between current dividends
and future growth.
(ii) Financial leverage is caused due to fixed financial costs.
(iii) Economic exposure implies change in value of a firm due to unanticipated change
in exchange rates.
(iv) Permanent working capital financed by current liabilities has its pitfalls.
(v) Forward exchange rates are always at premium or discount to spot rates.

CS Final December 2008
(i) Investment, financing and dividend decisions are inter-related.
(ii) Total risk is the risk associated with combined leverage.
(iii) The depository system functions very much like the banking system.
(iv) Stock options are for speculators.
(v) Inspite of many advantages, the stable dividend policy suffers from certain limitations.

(b) Describe the features of ‘index futures’. How are interest rate futures settled ?

CS Final June 2008
(i) “Financial leverage is a fair weather friend.” Discuss.
(ii) “The risk of the portfolio which combines both a risky and a risk-free asset will be reduced to the standard deviation of the risky security, weighted for its proportionate value in the portfolio.” Do you agree ? Discuss.
(iii) “Alpha is an indicator of the extent to which the actual return of a stock deviates from those predicted by its beta value.” Discuss.
(iv) “An investor suffers dilution of financial interest when he does not exercise his pre-emptive rights.” Comment.
(v) “Derivatives are mainly used to control risk to increase returns.” Comment.

CS Final December 2007
(i) Effective treasury management involves incorporation of control and supervision measures.
(ii) A stable dividend policy is always preferable to fluctuating dividend policy.
(iii) An option protects the underlying asset against loss and the underlying asset protects the option against loss.
(iv) Adequacy of current assets is a myth.
(v) The portfolio managers generally attempt to diversify risks by investing in debts and equity instruments.
(vi) Taxation provisions have a significant effect on financial planning of a company.

CS Final June 2007
(i) ‘Wealth maximisation’ objective of the financial management is redefined as ‘value maximisation’.
(ii) Project planning aims at choosing the minimum quantum of investment which may yield the highest return or maximise investments for obtaining the highest growth of the project.
(iii) Corporate financing decision without consideration of corporate taxation is meaningless.
(iv) Zero based budgeting plays a vital role in treasury management.
(v) Operations in forex market are exposed to a number of risks.
(vi) Large shareholders are not interested in dividends.

CS Final December 2006
(a) “The choice of an appropriate debt policy involves a trade-off between tax benefits and the cost of financial distress.” Comment.
(b) “In the emerging economic and financial environment, the role and responsibility of treasury manager has become more demanding, complex and important.” Elaborate.
(c) “Cost of retained earnings is the opportunity cost of returns obtained in a similar investment elsewhere.” Discuss.
(d) “Internal treasury control is a process of self-improvement.” Comment.

CS Final June 2006
(a) “Profit maximisation is pre-requisite for shareholders’ wealth maximisation.” Do you agree ? Give a brief account of the advantages and disadvantages of these goals.
(b) Discuss the advantages of investing in mutual funds.
(c) Length of operating cycle is the major determinant of working capital needs of a business firm. Explain.
(d) Write a note on ‘depository system in India’.

CS Final December 2005
(a) "Internal treasury control is a process of self-improvement." Explain.
(b) List out the benefits of public deposits to the company as well as to the depositors.
(c) "For the lessor, lease decision is akin to a capital budgeting exercise." Examine the statement and explain its implications.
(d) "Economic value added (EVA) concept is in conformity with the objective of wealth maximisation." Explain.

CS Final June 2005
(a) “Treasury management has both macro and micro aspects.” Comment.
(b) “There are legal constraints on payment of dividends.” Discuss it in the light of statutory framework existing in India.
(c) Describe the main objectives of syndication of euro currency loans.
(d) State with reasons whether the investment, financing and dividend decisions are inter-related.

CS Final December 2004
(a) “Treasury management has both macro and micro aspects.” Explain.
(b) “Reserves and surpluses have no cost.” Do you agree ? Give reasons for your answer.
(c) Explain ‘capital account convertibility’.
(d) Distinguish between the hedging and conservative approaches to financing of working capital.

CS Final June 2004
(a) “A high EPS may not always maximise the stock price.” Do you agree ? Discuss.
(b) List out the benefits of issuing bonus shares.
(c) “Stability in payment of dividends has a marked bearing on the market price of the shares of a corporate firm.” Explain the statement.
(d) Describe the responsibilities of treasury manager.

CS Final December 2003
(a) “Liquidity and profitability are competing goals for the finance manager.” Comment.
(b) “Depreciation is a part of cost of production and is at the same time an important source of internal finance.” Discuss this statement.
(c) “Retained earnings have no cost.” Do you agree ? Give reasons for your answer.
(d) “Efficient cash management will aim at maximizing the availability of cash inflows by decentralising collections and decelerating cash outflows by centralizing disbursements.” Discuss.

(c) Discuss in brief the techniques of economic appraisal for an industrial project.

(a) “Bonus shares represent simply a division of corporate pie into a large number of pieces.” Discuss.
(b) Discuss the salient features of risk containment measures developed by National Securities Clearing Corporation Ltd. (NSCCL) for the futures and option segment.
(c) Discuss the relationship between ‘spot rate’ and ‘forward rate’.
(d) According to Dow Jones Theory, “identification of ‘turn’ is made on the basis of daily movement of prices”. State, with reasons, whether this statement is correct.

CS Final Old December 2004
(a) Why should a company concentrate primarily on wealth maximisation instead of profit maximisation ?
(b) Explain in brief the role, importance and functions of fundamental analysis.

(a) What do you understand by ‘credit rating’ ? Explain the methodology for rating debt instruments of corporates.

(c) Describe the steps taken by the financial institutions for appraising a project.

(b) Discuss the meaning and importance of risk management and various methods followed for risk management.
(c) What is meant by ‘joint venture’ ? Describe the strategy and issues for setting up joint venture abroad.

(b) What are the financial implications of the ‘retirement benefits’ and ‘voluntary
retirement scheme’ (VRS) followed by the corporates?

CS Final Old June 2004
(a) “Investment, financing and dividend decisions are inter-related.” Comment.

(a) Does declaration of dividends necessarily have positive impact on the wealth of shareholders ? Discuss.

(a) What is meant by ‘transaction exposure’ ? Describe the methods used for hedging this kind of exposure.

(b) What is ‘project report’ ? Why is it necessary to prepare project report ? Sketch a format for project report to be submitted to a financial institution and discuss the steps taken by financial institutions while appraising a project.

CS Final Old December 2003
(a) Discuss the salient features of financial sector reforms and its impact on the financial system of the country.
(b) Explain the costs of liquidity and illiquidity.
(c) “Depreciation is an important source of working capital.” Do you agree? Defend your answer.

(b) Discuss briefly various types of financial benefits available to employees in corporate sector in India in the light of existing statutory framework.



Distinguish between any four of the following :

CS PP December 2011
(i) ‘Control need of widely-held company’ and ‘control need of closely-held company’.
(ii) ‘Capital structure’ and ‘financial structure’.
(iii) ‘Finance lease’ and ‘sale-and-lease back’.
(iv) ‘Net income approach to capital structure’ and ‘net operating income approach to capital structure’.
(v) ‘Financial risk’ and ‘business risk’.

CS PP June 2011
(i) ‘Current account’ and ‘capital account’ in balance of payment.
(ii) ‘Foreign direct investment’ and ‘portfolio investment’.
(iii) ‘Ask price’ and ‘bid price’.
(iv) ‘Horizontal capital structure’ and ‘vertical capital structure’.
(v) ‘Investment’ and ‘speculation’.

CS PP December 2010
(i) 'Financial distress' and 'insolvency',
(ii) 'Leasing'and 'hire-purchase'.
(iii) 'Financial viability of a project' and 'commercial viability of a project'.
(iv) 'Clearing mechanism' and 'settlement mechanism'.
(v) 'Return on capital employed' and 'return on net worth'.

CS PP June 2010
(i) ‘Deep discount bonds’ and ‘disaster bonds’.
(ii) ‘Financial aspects of project appraisal’ and ‘economic aspects of project appraisal’.
(iii) ‘Index futures’ and ‘index options’.
(iv) ‘Initial margin’ and ‘maintenance margin’.
(v) ‘Corporate finance’ and ‘business finance’.

CS PP December 2009
(i) ‘Factoring’ and ‘bill discounting’.
(ii) ‘Operating lease’ and ‘finance lease’.
(iii) ‘Business risk’ and ‘financial risk’.
(iv) ‘Efficient portfolio’ and ‘optimal portfolio’.
(v) ‘Translation risk’ and ‘transaction risk’.

CS PP June 2009
(i) ‘Financing of current assets’ and ‘financing of fixed assets’.
(ii) ‘Financial derivatives’ and ‘commodity derivatives’.
(iii) ‘Interest rate parity’ and ‘purchasing power parity’.
(iv) ‘Capital structure’ and ‘financial structure’.
(v) ‘Liquidity management’ and ‘treasury management’.

CS Final June 2010
(i) ‘Investment’ and ‘speculation’.
(ii) ‘Real estate mortgage’ and ‘real estate lease’.
(iii) ‘Covered option’ and ‘naked option’.
(iv) ‘Current account convertibility’ and ‘capital account convertibility’.
(v) ‘Financial engineering’ and ‘financial restructuring’.

CS Final December 2009
(i) ‘Financial leverage’ and ‘operating leverage’.
(ii) ‘Markowitz model’ and ‘Sharpe index model’.
(iii) ‘Immobilisation’ and ‘dematerialisation’.
(iv) ‘Hedging’ and ‘speculation’.
(v) ‘Forward’ and ‘futures’.

CS Final June 2009
(i) ‘Direct quote’ and ‘indirect quote’.
(ii) ‘Semi-strong form theory’ and ‘strong form theory’ of efficient market.
(iii) ‘Weighted average cost of capital’ and ‘marginal cost of capital’.
(iv) ‘Capital budgeting’ and ‘capital rationing’.
(v) ‘Capital structure’ and ‘financial structure’.

CS Final December 2008
(i) ‘Commodity futures’ and ‘financial futures’.
(ii) ‘Factoring’ and ‘securitisation’.
(iii) ‘Bilateral netting’ and ‘multilateral netting’.
(iv) ‘Treasury management’ and ‘financial management’.
(v) ‘Current account’ and ‘capital account’ in balance of payment.

CS Final June 2008
(i) ‘Interest swap’ and ‘currency swap’.
(ii) ‘Financial distress’ and ‘insolvency’.
(iii) ‘Net present value’ and ‘profitability index’.
(iv) ‘Investment’ and ‘speculation’.
(v) ‘Commodity futures’ and ‘financial futures’.

CS Final December 2007
(i) ‘Capital structure’ and ‘financial structure’.
(ii) ‘Futures’ and ‘forwards’,
(iii) ‘Business risk’ and ‘financial risk’,
(iv) ‘Finance lease’ and ‘operating lease’.
(v) ‘Semi-strong form’ and ‘strong form’ of efficient market hypothesis.

CS Final June 2007
(a) “Internal funds are the important sources of finance.” Discuss.
(b) “No major economic benefit results from bonus shares and share splits.” Explain.
(c) “Future contracts have linear pay-offs. It means that the losses as well as profits for the buyer and seller are unlimited.” Explain.
(d) “There is usually a difference between the social and monetary cost/benefits of a project.” Discuss.

(a) “In an uncertain world in which verbal statements can be ignored or misinterpreted,dividend action does provide a clear-cut means of ‘making a statement’ that speaks louder than thousand words.” Explain.

CS Final December 2006
(i) ‘Sensex’ and ‘nifty’.
(ii) ‘Caps’ and ‘collars’.
(iii) ‘Financial structure’ and ‘capital structure’.
(iv) ‘Forward contract’ and ‘options’.

CS Final June 2006
(a) “The cash flow approach of measuring future benefits of a project is superior to
the accounting approach.” Discuss.
(b) Describe the main features of the gilt edged primary market.
(c) Briefly explain the services offered by merchant bankers to an issue.
(d) Describe the reasons for internationalisation of business and investment.

CS Final December 2005
(i) 'Factoring' and 'bill discounting'.
(ii) 'NPV' and 'IRR' methods of capital budgeting.
(iii) 'Bonus issue of shares' and 'stock split'.
(iv) 'Stock future' and 'index future'.
(v) 'Futures contracts' and 'forward contracts'.

(a) Mention any four tools available to cover exchange rate risk.

(a) Write a short note on 'credit rating'.

CS Final June 2005
(a) “In the case of private enterprises, social cost benefit analysis for capital project
has no relevance.” Discuss.
(b) “To keep the risk within manageable limits, a firm which has high degree of
operating leverage should have low financial leverage and vice-versa.” Comment.
(c) Write a note on ‘Sharpe Index Model’.
(d) Describe the mechanics involved in factoring.

(b) Discuss the various products (tools) available in the forex market to cover exchange rate risks.

CS Final December 2004
(a) What is credit rating and how does it benefit the investors and the company ?
(b) Describe the meaning of ‘index futures’. What is the scope of risk management by using index futures ?
(c) Distinguish between ‘capital market line’ and ‘security market line’.
(d) Discuss the basic characteristics of depository system implemented in India.

(b) How does ‘outsourcing’ benefit the company ?

(b) “Risk and return go together and there is always a conflict between the return from a decision and the risk it brings to the firm.” Discuss this statement in the light of finance function.
(c) How the ‘real time gross settlement’ (RTGS) mechanism initiated by the Reserve Bank of India would help treasury managers to manage their funds more efficiently?

CS Final June 2004
(b) “Depreciation is a non-cash item of an expense and it is said that it is a source of finance.” Explain the statement.
(c) “It is possible for an investor to construct a zero-risk portfolio of two securities which are perfectly negatively correlated.” State, giving brief reasons, whether the statement is true.

(a) If the use of financial leverage magnifies the earnings per share under the favourable economic conditions, why do companies not employ very large amount of debt in their capital structure ?
(b) Discuss the foreign sources of finance available to the .corporate sector.
(c) Discuss in brief the factors to be considered while evaluating the technical feasibility of a project.
(d) Discuss in brief the attributes of debt securitisation.
(b) Distinguish between the hedging and conservative approaches to financing of working capital.

CS Final December 2003
(c) Discuss in brief the techniques of economic appraisal for an industrial project.

(a) What type of risk exposures are faced by a firm which is dealing with foreign exchange ?
(c) What is ‘treasury management’ ? Explain the various tools of treasury management. How is it different from financial management ?

(a) Evaluate the growth of derivatives market in India.
(c) What are the methods of ‘venture financing’ ? Also indicate in brief the elements that are needed for the success of venture capital.

(a) “Bonus shares represent simply a division of corporate pie into a large number of pieces.” Discuss.
(b) Discuss the salient features of risk containment measures developed by National Securities Clearing Corporation Ltd. (NSCCL) for the futures and option segment.
(c) Discuss the relationship between ‘spot rate’ and ‘forward rate’.
(d) According to Dow Jones Theory, “identification of ‘turn’ is made on the basis of daily movement of prices”. State with reasons whether this statement is correct.

CS Final Old June 2004
(a) Describe the salient features of certificate of deposit (CD), commercial paper (CP), non-voting shares, global depository receipts (GDRs) and foreign currency convertible bonds (FCCBs).
(b) Describe the various steps to be taken in managing an initial public offering by a new company. )
(c) Describe the concept of 'lease'. What are the major differences between 'operating lease' and 'finance lease' ?

CS Final Old December 2003
(a) Differentiate between ‘restructuring’ and ‘financial reorganisation’ of the company. What steps do you take in pursuing financial reorganisation of the company?
(b) Discuss the genesis of international financial markets and explain in brief how euro-currency, euro-credit and euro-bond markets differ from each other.
(c) Discuss in brief the various new money and capital market instruments and its influence on corporate financing.



Write notes on any four of the following :

CS PP December 2011
(i) Forfaiting
(ii) Financial distress
(iii) Cost of retained earnings
(iv) Advantages of commodity trading
(v) Services provided by venture capital fund.

CS PP June 2011
(i) Sweat equity shares
(ii) Benefits of depository system
(iii) Operating cycle
(iv) Risks in forex market
(v) Interest rate parity.

CS PP December 2010
(i) Secured premium note
(ii) Important motives to hold cash
(iii) Domestic resource cost
(iv) Purchasing power parity
(v) Factoring.

CS PP June 2010
(i) Types of swaps
(ii) Capital rationing
(iii) Technical aspects of feasibility report
(iv) Trade credit as source of finance
(v) ABC analysis.

CS PP December 2009
(i) Financial instruments used for venture financing
(ii) Factors affecting dividend policy of a firm
(iii) Optimal capital structure
(iv) Financing cost escalation
(v) Domestic resource cost.

CS PP June 2009
(i) Participating preference shares
(ii) Credit investigation factors
(iii) Transfer pricing
(iv) Risks in forex market
(v) Financial distress.

CS Final June 2010
(i) Financial planning
(ii) Consequences of low and high pay-out ratios
(iii) Economic aspects of project appraisal
(iv) Regulatory framework for financial system
(v) Operating cycle.

CS Final December 2009
(i) Semi-strong efficient market
(ii) Capital account convertibility
(iii) Assumptions of technical analysis
(iv) Objectives of treasury management
(v) Project implementation.

CS Final June 2009
(i) Elements of forex management
(ii) Participants in the derivative market
(iii) Important aspects for successful monitoring of a project
(iv) Marked-to-market settlement for futures
(v) Models of depository.

CS Final December 2008
(i) Vertical capital structure
(ii) Exchange rate forecasting
(iii) Working capital and dividend policy
(iv) Semi-strong form of market efficiency
(v) Bridge loans.

CS Final June 2008
(i) Gilt-edged primary market
(ii) Essential elements of forex management
(iii) Yield curve and treasury management
(iv) Securitisation of financial assets
(v) Participants in derivatives market.

CS Final December 2007
(i) Sharpe index
(ii) Re-financing
(iii) Bridge finance
(iv) Arbitrage-free market
(v) Hedge funds
(vi) Depository system in India.

CS Final June 2007
(i) Determinants of working capital requirements
(ii) Capital rationing
(iii) Mechanics of factoring
(iv) Loan syndication
(v) Economic rate of return
(vi) Financial distress.

CS Final December 2006
(i) Relationship between spot rate and forward rate
(ii) Sources of real estate funding
(iii) Stock lending scheme
(iv) Technical charts
(v) Economic value added (EVA) and wealth-maximisation.

CS Final June 2006
(i) Leveraged lease
(ii) Considerations in dividend policy
(iii) Dow theory
(iv) Securitisation of mortgages.

CS Final June 2005
(i) Portfolio management
(ii) Measures for development of venture capital industry in India
(iii) Mark-to-market settlement of index futures
(iv) Limitations of Markowitz model.

CS Final December 2004
(i) Leveraged lease
(ii) Green shoe option
(iii) Bonus debentures
(iv) Systematic and unsystematic risks.

CS Final June 2004
(i) Straddle
(ii) Syndicated loans
(iii) Methods of venture capital financing
(iv) Assumptions underlying technical analysis.

CS Final Old December 2004
(i) Euro-bond market
(ii) Residual theory of dividend policy
(iii) Factoring services
(iv) Financial sector reforms
(v) Strategies for acquisitions and takeover.

CS Final Old June 2004
(i) Insurance and risk management
(ii) Fundamental analysis and technical analysis
(iii) Securitisation
(iv) Capital structure ratios
(v) Venture capital.

Sourse: ICSI Past Question Papers available on www.icsi.edu

Hope this will help you in preparing your notes for ensuing examination.

Have a nice day.



Last edited by rchgiri on Sun 30 Aug 2015 - 10:15; edited 8 times in total

ponni


CSoC Smart User
CSoC Smart User
nice post.

rchgiri

avatar
CSoC King
CSoC King
Dear Friends,

Updated upto June 2012 Session

Please find the past questions containing 60 marks of CS Professional: M-II P 3 > Past Questions >Financial Treasury and Forex Management for the benefits of the CS Professional students.

Comment on any four of the following:
CS PP June 2012
(i) NPV decision rule does not hold true in the situation of capital rationing.
(ii) Risk is always associated with receivables.
(iii) The strategy for effective cash management in any firm has a core component of operating cycle.
(iv)Treasury function is supplemental and complemental to the finance function in a firm.
(v) Capital Asset Pricing Model (CAPM) is a tool to work out cost of equity.

Distinguish between any four of the following:
CS PP June 2012
(i) ‘Financial distress’ and ‘insolvency’.
(ii) ‘Open ended mutual funds’ and ‘close ended mutual funds’.
(iii) ‘Accounting exposure’ and ‘economic exposure’.
(iv) ‘Semi-strong form of efficient market hypothesis’ and ‘strong form of efficient market hypothesis’.
(v) ‘Factoring’ and ‘bill discounting’.

Write notes on any four of the following:
CS PP June 2012
(i) External commercial borrowings
(ii) Financial viability of a project
(iii) Counter party risk
(iv) Optimal capital structure
(v) Zero coupon convertible notes.

Sourse: ICSI Past Question Papers available on www.icsi.edu

Hope this will help you in preparing your notes for ensuing examination.

Have a nice day

Soundharya


CSoC Master
CSoC Master
Thank you so much sir ! Smile

https://sounds-takeonit.blogspot.com

5 FM Notes for Final students on Fri 14 Sep 2012 - 15:48

rchgiri

avatar
CSoC King
CSoC King
Dear Friends,

Please find the following link

http://www.csstudentsclub.com/t877-fm-notes-for-final-students

for "FM Notes for Final students"

Have a happy learning.

Nishakejriwal


CSoC Smart User
CSoC Smart User
Nice post sir,

Keep helping

rchgiri

avatar
CSoC King
CSoC King
Dear Friends,

Updated upto June 2013 Session

Please find the past questions containing 60 marks of CS Professional: M-II P 3 > Past Questions >Financial Treasury and Forex Management for the benefits of the CS Professional students.

Comment on any four of the following:

CS PP June 2013
(i) Liquidity and profitability are competing goals for the financial executives.
(ii) Internal rate of return (IRR) of a project is that rate where net present value (NPV)is zero.
(iii) Tools and techniques of treasury managers are very specific.
(iv) Cost of capital is used by a company as a minimum benchmark for its yield.
(v) Depository system functions just like the banking system.

CS PP December 2012
(i) Issue of bonus shares does not affect the liquidity position of the company.
(ii) Dividend policy has to be adapted in the light of nature and environment of firm, industry and the economy.
(iii) The risk of becoming technically insolvent is measured by using the tool of net working capital by the Finance Managers.
(iv) Treasury function is concerned with management of funds at the micro level.
(v) Exchange rate is the price of one country's money in terms of other country's money.

Distinguish between any four of the following:

CS PP June 2013
(i) 'Profit maximisation' and 'wealth maximisation'.
(ii) 'Netting in forex' and 'matching in forex'.
(iii) 'Currency swaps' and 'currency option'.
(iv) 'Efficient portfolio' and 'optimal portfolio'.
(v) 'Interest rate parity' and 'purchasing power parity'.

CS PP December 2012
(i) 'Risk evaluation' and 'sensitivity analysis'.
(ii) 'Factoring' and 'bill discounting'.
(iii) 'Technical viability of a project' and 'financial viability of a project'.
(iv) 'Growth oriented funds' and 'high growth funds'.
(v) 'Bearer debentures' and 'registered debentures'.

Write notes on any four of the following:

CS PP June 2013
(i) Factoring
(ii) Translation exposure
(iii) Transfer pricing
(iv) Economic rate of return for project appraisal
(v) Sweat equity shares.

CS PP December 2012
(i) Social cost benefit analysis
(ii) ABC analysis of inventory management
(iii) Efficient portfolio
(iv) Economic value added (EVA)
(v) Residual theory of dividend policy.

Sourse: ICSI Past Question Papers available on www.icsi.edu

Hope this will help you in preparing your notes for ensuing examination.

Have a nice preparation and examination.

8 Updated upto December 2013 Session on Fri 28 Mar 2014 - 21:28

rchgiri

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Updated upto December 2013 Session

Comment on any four of the following:
CS PP December 2013
1. (i) Financial gearing is a fair weather friend.
(ii) Deferred payment of taxes is a source of working capital.
(iii) The device of capital rationing is adopted to control capital expenditure.
(iv) A stable dividend policy is always preferable to a fluctuating dividend policy.
(v) Intrinsic value of a security is valid for a given set of conditions.

Distinguish between any four of the following :

CS PP December 2013
4. (i) 'Liquidity management' and 'treasury management'.
(ii) 'Financial aspects' and 'economic aspects' of project appraisal.
(iii) 'Current account' and 'capital account' in balance of payment.
(iv) 'Capital structure' and 'financial structure'.
(v) 'Dematerialisation' and 'immobilisation'.
Write notes on any four of the following :

CS PP December 2013
7. (i) Sensitivity analysis in capital budgeting
(ii) Stock index futures
(iii) Secured premium notes
(iv) Internal treasury control
(v) Benefits of depository system.

Sourse: ICSI Past Question Papers available on www.icsi.edu

Have a nice examination.

rchgiri

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CSoC King

Updated upto June 2014 Session

Comment on any four of the following:

CS PP June 2014 under Old Syllabus

1, (i) The goal of profit maximisation does not provide us with an operationally useful criterion.
(ii) Social-cost-benefit analysis for capital projects has no relevance in the case of private enterprises.
(iii) Financial leverage is a fair weather friend.
(iv) Internal treasury control is a process of self improvement.
(v) Risk and return go together and there is always a conflict between the return from a decision and the risk it brings to the firm. (5 marks each)

CS PP June 2014 under New Syllabus

1.(a) Current assets are financed by current liabilities.
(b) Commodity trading causes high level of inflation.
(c) Economic Value Added (EVA) concept is in conformity with the objective of wealth maximisation.
(d) Higher financial leverage is better than higher operating leverage.
(5 marks each)

2. (a) "The investors behaviour criterion provides framework for analysis of risk-return choices" — Markowitz. Do you agree ? (4 marks)
(c) The time value of money concept is needed to maximise wealth. (4 marks)

Distinguish between any four of the following :

CS PP June 2014 under Old Syllabus

4.(i) 'Investment decision' and 'financial decision'.
(ii) 'Capital market line' and 'security market line'.
(iii) 'Deep discount bonds' and 'disaster bonds'.
(iv) 'Stable dividend policy' and 'residual dividend policy'.
(v) 'Liquidity management' and 'treasury management'. (5 marks each)

CS PP June 2014 under New Syllabus

2. (b) 'sensitivity analysis' and 'scenario analysis'
(d) 'interest rate parity' and 'purchasing power parity'(4 marks each)

Write notes on any four of the following :

CS PP June 2014 under Old Syllabus

7. (i) Marginal cost of capital
(ii) Sharpe index model
(iii) Social aspects of project appraisal
(iv) Approaches to credit rating
(v) Capital account convertibility. (5 marks each)

CS PP June 2014 under New Syllabus

6. (a) Mark-to-market process
(b) Asset backed securitisation
(c) Currency derivatives
(d) Financial insolvency. (4 marks each)

Other Theory questions

CS PP June 2014 under New Syllabus

2A. (i) Describe participants in the foreign exchange market. (4 marks)
(ii) How does capital asset pricing model (CAPM) help in estimating expected rate of return of a security ? (4 marks)
(iii) Explain the net income approach to capital structure. (4 marks)
(iv) How do firms manage required level of receivables ? (4 marks)

5. (a) Financial management means the management of finances of a business organisation in order to achieve financial objectives. Elaborate the financial objectives of a firm. (4 marks)
(b) What is a financial lease ? How is it different from sale and leaseback ? (4 marks)
(c) What factors are to be considered while deciding the financial and commercial viability of a project ? (4 marks)
(d) Describe briefly the different roles of treasury manager in overall functioning of a firm. (4 marks)

10 Updated upto December 2014 Session on Wed 22 Apr 2015 - 7:22

rchgiri

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CSoC King
Updated upto December 2014 Session

Comment on any four of the following:

CS PP December 2014 under Old Syllabus

1. (i) Investment, financing and dividend decisions are inter-related.
(ii) The sole objective of the management when making investment decisions is to maximise the net present value.
(iii) Depreciation is a source of internal finance.
(iv) Liquidity and profitability are competing goals for the finance manager.
(v) Length of operating cycle is the major determinant of working capital needs of a business firm. (5 marks each)

CS PP December 2014 under New Syllabus

1.(a) The functions of treasury management are concerned with both micro and macro facets of the economy.
(b) There are a number of statistical/mathematical techniques of risk evaluation in capital budgeting.
(c) Venture capitalists prefer to invest in 'entrepreneurial business'.
(d) EBIT–EPS analysis is an effective method in analysing the effect of leverage. (5 marks each)

2. (a) "The balance sheet fails to depict an exact picture of the current assets." Elucidate. (4 marks)

Distinguish between any four of the following :

CS PP December 2014 under Old Syllabus

4.(i) 'Investment' and 'speculation'.
(ii) 'Finance lease' and 'sale-and-lease back'.
(iii) 'Transaction risk' and 'translation risk'.
(iv) 'Operating leverage' and 'financial leverage'.
(v) 'Current assets financing' and 'fixed assets financing'. (5 marks each)

CS PP December 2014 under New Syllabus

2. (b) Distinguish between 'operating lease' and 'finance lease'.(4 marks)

(c) Distinguish between 'capital budgeting' and 'capital rationing'. (4 marks)

(d) Distinguish between 'capital market line (CML)' and 'security market line (SML)'.

2A.(ii) Distinguish between 'net income' and 'net operating income' approaches to cost of capital. (4 marks)

Write notes on any four of the following :

CS PP December 2014 under Old Syllabus

7. (i) Financial distress
(ii) Economic aspects of project appraisal
(iii) Modigliani-Miller hypothesis of dividend irrelevance
(iv) Services provided by venture capital fund
(v) Purchasing power parity. (5 marks each)

CS PP December 2014 under New Syllabus

6. (a) Credit derivatives
(b) Limitations of credit rating
(c) Operating lease
(d) Commodities market. (4 marks each)

Other Theory questions

CS PP December 2014 under New Syllabus

2A. (i) 'Vertical capital structure' and 'pyramid shaped capital structure' exhibit opposite dimensions in analysing its utility. Discuss. (4 marks)

(iii) In real life, the component costs of debt and equity are jointly operational rather than independently determined. Elucidate. (4 marks)
(iv) State the objectives of treasury management. (4 marks)

5. (a) Examine the role of merchant banking organisations. (4 marks)
(b) What are the determinants of working capital ? (4 marks)
(c) Project appraisal under inflationary condition necessitates adherence to specified guidelines which must be resorted to. State these guidelines. (4 marks)
(d) Examine the basic characteristics and participants in the derivatives market. (4 marks)

Sourse: ICSI Past Question Papers available on www.icsi.edu

Hope this will help you in preparing your notes for ensuing examination.

Have a nice preparation.

11 Updated upto June 2015 Session on Sun 30 Aug 2015 - 10:06

rchgiri

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CSoC King
CSoC King
Updated upto June 2015 Session

Comment on any four of the following:

CS PP June 2015 under New Syllabus

1.Comment on the following :
(a) Financial distress is different from insolvency.

(b) Treasury management has both macro and micro aspects.

(c) As there is no explicit cost of retained earnings, these funds are free of cost.

(d) Banks should lend prudently and with care. (5 marks each)

CS PP June 2015 under Old Syllabus

1.(i) Financing decisions are affected by liquidity analysis.

(ii) Capital asset pricing model (CAPM) is a tool to work out cost of equity.

(iii) A treasury manager has a significant role to play in the overall functioning of a firm.

(iv) Dividend policy is irrelevant in decision making.

(v) Apart from the retention of profits and capitalising the accumulated earnings, the bonus shares serve several other objectives. (5 marks each)

Distinguish between any four of the following :

CS PP June 2015 under New Syllabus

2. (a) Distinguish between 'explicit cost' and 'implicit cost'. (4 marks)

(c) Distinguish between 'ask price' and 'bid price' in foreign exchange. (4 marks)


CS PP June 2015 under Old Syllabus

4. (i) 'Interest rate parity' and 'purchasing power parity'.

(ii) 'Net income approach to capital structure' and 'net operating income approach to capital structure'.

(iii) 'Average accounting rate of return' and 'internal rate of return'.

(iv) 'Financial distress' and 'insolvency'.

(v) 'Financing decisions' and 'dividend decisions'. (5 marks each)


Write notes on any four of the following :

CS PP June 2015 under New Syllabus

2. (b) Write a note on domestic resource cost. (4 marks)

2A. (iv) Write a note on credit default swaps. (4 marks)


CS PP June 2015 under Old Syllabus

7. (a) Company Secretary as a forex manager

(b) Credit rating

(c) Economic value added (EVA)

(d) Optimal capital structure

(e) Role of participants of commodity market. (5 marks each)

Other Theory questions

CS PP June 2015 under New Syllabus

2.(d) Explain the concept of sensitivity analysis. (4 marks)

2A. (i) Discuss the mark-to-market settlement of index futures. (4 marks)

(ii) High return on investment (ROI) indicates efficient use of assets. Comment. (4 marks)

(iii) Describe functions of treasury management. (4 marks)

5. (a) Discuss the assumptions of capital asset pricing model (CAPM) along with limitations. (4 marks)

(b) Describe the steps involved in project planning process. (4 marks)

(c) How do firms manage economic risk due to fluctuations in forex market ? (4 marks)

(d) "A firm's stock price is not related to its mix of debt and equity financing." Do you agree with this statement ? Explain. (4 marks)

Sourse: ICSI Past Question Papers available on www.icsi.edu

Hope this will help you in preparing your notes for ensuing examination.

Have a nice preparation.

rchgiri

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CSoC King
CSoC King
Dear CS Students,

As per last CS Professional Programme (New Syllabus)June 2015 Exam, Financial Treasury and Forex Management (Module 2 Paper No. 5) contains 52 Marks on Theory Questions and 48 Marks on Problem Questions .

Hence, it is essential to have a through knowledge and conceptual clarity on Theory Portion of this paper.

This conceptual clarity will also help to secure good marks in Problem questions.

I am preparing the compilation on theory portion by combining theory questions from the past CA, CMA and CS Exam papers.

I can also help the interested students to have e-Learning of respective papers of CA course corresponding to the CS Course through the link of CA students.

If anybody is interested in it, please contact me on 07756030169 and email id: rchgiri@yahoo.co.in

Wish you all the best for your next CS Professional Exam.

rchgiri

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CSoC King
CSoC King
Dear All,

Please find the Practice Manual- Financial, Treasury and Forex Management

for CS Professional Programme December 2015

Link: https://www.icsi.edu/docs/Website/PRACTICE%20MANUAL%20FTFM%202015%20FINAL.pdf

Wish you all the best for the next CS Exam.

rchgiri

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CSoC King
CSoC King
Updated upto December 2015 Session

Comment on any four of the following:

CS PP December 2015 under New Syllabus

1.Comment on the following :
(a) Financial sector performs basic economic function of intermediation through transformation mechanisms.

(b) Project review is a very important aspect of the entire project life.

(c) A firm having high current ratio may not necessarily be treated as being favourably placed as regards payment of its current liabilities.

(d) Sharpe ratio is a risk adjusted measure of return to evaluate the performance of a portfolio.(5 marks each)

4. (a) There are various sources of permanent working capital. Comment.(4 marks)

CS PP June 2015 under Old Syllabus

1.(i) Financial management is science as well as art.

(ii) The nature of the industry plays an important role in capital structure decisions.

(iii) Bonus shares do not affect liquidity of the company and yet serve many ends.

(iv) As earnings of the firm increase, the customary dividend will not be altered.

(v) Working capital leverage and capital structure leverage are two different concepts. (5 marks each)

Distinguish between any four of the following :

CS PP December 2015 under New Syllabus

2.(a) 'Forfaiting' and 'export factoring'.

(b) 'Net net net lease' and 'update lease'.

(c) 'Interest rate parity' and 'purchasing power parity'.

(d) 'Call premium' and 'put premium'. (4 marks)


CS PP December 2015 under Old Syllabus

4. (i) 'Capital budgeting' and 'capital rationing'.

(ii) 'Finance lease' and 'sale and lease back'.

(iii) 'Counter-party risk' and 'operating risk'.

(iv) 'Forex market' and 'Euro currency market'.

(v) 'Liquidity management' and 'treasury management'.

(v) 'Financing decisions' and 'dividend decisions'. (5 marks each)


Write notes on any four of the following :

CS PP December 2015 under New Syllabus

2A. (i) What are the risks and uncertainties in capital budgeting decisions ?

(ii) Explain 'pecking order hypothesis' relevant to capital structure planning.

(iii) Describe the meaning of 'pegging of currency'. Highlight the intermediate arrangements for determining exchange values of foreign currency.

(iv) 'Reverse stock split' is generally an indication of financial difficulty. Elucidate. (4 marks each)

3.(c) Describe the tool that provides insights into whether a company is creating or destroying wealth. (4 marks)

3A. (i) Describe various tools of treasury management. (4 marks)

CS PP June 2015 under Old Syllabus

7. (i) Benefits of depository system

(ii) Participants in derivatives market

(iii) Optimal capital structure

(iv) Participants involved in the securitisation process

(v) Cost of retained earnings. (5 marks each)

Sourse: ICSI Past Question Papers available on www.icsi.edu

Hope this will help you in preparing your notes for ensuing examination.

Happy Readings.

rchgiri

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CSoC King
CSoC King
A good financial management checklist ensures that:

• All accounting registers, journals and ledgers are up to date.
• All fi nancial reports are prepared and submitted in a timely manner.
• Procedures for the use of petty cash are properly developed.
• All expenses other than petty cash are paid by cheque.
• Financial activities are separated in such a way that one person alone never registers,
reviews and authorizes any complete transaction.
• Procedures for authorizing purchases are being followed.
• Security measures are in place to protect the assets, books and registers from tampering
or theft.
• A physical inventory of fi xed assets and supplies is conducted at least once a year.
• The bank statement is reconciled monthly.
• There is a fi nancial plan and/or a fi nancial strategy leading to improved cost recovery.
• Financial administration staff is involved in both programme and fi nancial planning
processes.
• A realistic annual budget is developed from the work plan.
• The organization has a unifi ed budget, as well as sub-budgets for different programmes
and/or donors. The accounting system adequately allocates expenses to different
programmes and/or donors.
• The line items in the chart of accounts, the budget and management fi nancial reports
correspond with each other.
• Cash fl ow is adequately monitored and is projected for the year so there are no periods
of cash shortage.
• Actual expenditures are compared quarterly with the budget and corrective action is
taken as a result of these comparisons.

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