Corporate Law ISBM EXAM ANSWER SHEET PROVIDED
Answer the following question.
Q1. Discuss Agent and agency (10 marks)
Q2. State kinds of guarantee (10 marks)
Q3. How to resolve disputes (10 marks)
Q4. Discuss FDI (10 marks)
Q5. What is possession and retention of foreign currency (10 marks)
Q6. Explain delivery (10 marks)
Q7. Distinguish sale and hire purchase (10 marks)
Q8. Explain dissolution. (10 marks)
Financial Management ISBM EXAM ANSWER SHEET PROVIDED
Answer the following question.
Q1. How are financial trades made in an over the counter market? Discuss the role of a dealer in the OTC market. (10
marks)
Q2. What is the basic goal of a business? (10
marks)
Q3. Determination of capital structure of a company is influenced by a number of factors’ explain six such factors. (10
marks)
Q4. To avoid the problem of shortage and surplus of funds, what is required in Financial management? Name the concept
and explain four points of importance.
(10
marks)
Q5. What is meant by capital budgeting decision? (10
marks)
Q6. What is meant by Financial Planning? (10
marks)
Q7. State the decisions involved in Financial management. (10
marks)
Q8. Why we use WACC? (10
marks)
Human Resource Management ISBM EXAM ANSWER SHEET PROVIDED
Case Studies
CASE STUDY (20
Marks)
The Punjab Machine Tools Corporation (PMTC) is in the business of metal cutting and metal forming tools is facing competition at
national and international levels. The business of the PMTC changes with the capacity utilization of user industries. In a recent
meeting the MD of PMTC Mr. Gyan chand was urged by the distributors to launch a high – tech metal cutting tool using latest
technology. They felt that this would help in fighting dumping of cheap second hand machinery and increase the domestic and
export market. Gyan chand realized this would increase his R&D budget. A fully automated production line increases financial
expenditure, require inventory space , training of mechanics in fully automated robots and gadgets . Gyan chand recalled the
previous market meetings wherein, the marketing people wanted many varieties of machine cutting tools but never appreciated its
financial burden. PMTC so far has successfully managed the business with two models of cutting tools and Gyan chand realized that
no need for new models but to improve existing models and reduce its cost and sales price. The customers are interested in getting
value for their money. Gyan chand sought the opinion of a consultancy firm in this regard .
Answer the following question.
Q1. What do you think is the mission of PMTC?
Q2. What kind of opportunities and threats exist for PMTC?
Q3. Evaluate the strength and weakness of PMTC?
Q4. What factors are critical for PMTC’s success or failure?
CASE STUDY (20
Marks)
Hyundai Motor Co., formed in 1967, was a part of the large South Korean Chaebol – the Hyundai Group – until the group split in
September 2000. In the last four decades, Hyundai managed to establish itself all over the world as a company producing reliable,
technically sound and stylish automobiles. In the 90s, the company started aggressive overseas expansion programs. By the late 90s,
when Southeast Asian crisis struck, the company like all the other chaebols, faced serious financial problems. To survive, it had to
cut its labor force. The company offered various retirement schemes, unpaid leave for two years, etc. to workers, and expressed its
inability to support its entire workforce in the slack period. The unions refused to compromise and the management too held its
ground. Finally, the government intervened to force a negotiated settlement between the union and the management
Answer the following question.
Q1. Give an overview of the case.
Q2. Discuss the damages: that unhappy management-labor relations can cause to an organization
CASE STUDY (20
Marks)
7/11/2017 Aeren Foundation
2/2
Profit . Com is a new Ecommerce company started by Ms Ding Dong Du. She is very ambitious and up beat about Indian economy.
Looking at the success of E commerce Companies in India she has big plans. She would like to attract the best talent and project the
company as most consumer friendly, quality conscious and modern. She has selected you as H R Head. How will you accomplish the
following assignments given to you?
Answer the following question.
Q1. Prepare Objectives of the Company and an action plan for the employees to make them professional.
Q2. How you will bring change in attitude of the employees to comply with the objectives Of the company?
CASE STUDY (20
Marks)
This case is about the employer branding strategies adopted by McDonald’s Corporation, one of the largest fast food chains in the
world. Since the 1980s, entry-level jobs at McDonald’s had come to be associated with low-paying dead end jobs. The term ‘McJobs’
had become synonymous with low-prestige, low-benefit, no-future jobs in the service or retail sector particularly at fast food
restaurants and retail stores. Though the term was coined to describe jobs at McDonald’s, it was later used to refer to any low-status
job where little training was required and workers’ activities were strictly regulated Because of its common usage, the term appeared
in the online version of the Oxford English Dictionary (OED) in March 2001 and the Merriam-Webster Collegiate Dictionary
(Merriam-Webster Dictionary) in 2003. The case discusses how McDonald’s systemically tried to redefine the term ‘McJobs’ and
improve its employer brand since the early 2000s. According to McDonald’s, this negative interpretation of McJobs was not only
inaccurate but also demeaning to the thousands of people working in the service sector. As employer branding was a critical
management tool for companies to attract the right talent, McDonald’s decided to try and revise the image associated with McJobs.
This it did by taking various initiatives that also included advertising campaigns aimed at showcasing the benefits of working at
McDonald’s and bridging the divide between people’s perceptions of the McJob and the real employment experience of people
actually working for the fast-food chain. Experts felt that these were some of the best examples of a company successfully planning
and implementing an employee branding strategy. However, the case also highlights the challenges faced by McDonald’s in
attracting new talent as derogatory comments continued to be made about McJobs and this could discourage prospective employees
from taking up such jobs.
Answer the following question.
Q1. What is the importance of employer branding and its relationship with the ability of a company to attract talent.
Q2. Explain the issues and challenges in planning and implementing an employer branding initiative.
International Business ISBM EXAM ANSWER SHEET PROVIDED
Case Studies
CASE STUDY (20
Marks)
In the worldwide production of mango, India stands on the top, which supplies about 40% of world mangoes. Nevertheless, the
export of mango is only 1% of the total production. It is because of shortage of export supply chain, high cost off transport and those
mangoes which cannot be exported. Indian mangoes are mostly exported to Arab countries, Nepal, Bangladesh and United
Kingdom. As compared to the US market, which is more profitable market, all the others bring much lesser profit. USA is the largest
importer of mangoes in the world. About 50 % mangoes are imported from Mexico by USA. India exports only insignificant amount
of mangoes to USA. This happened because of ban on import of mango from India inflicted by US between 1989 and 2006. In 2006
the ban was lifted but the enforcement of the inspection standards remained controversial. The ban was imposed by USA on Indian
mango because of over usage of pesticides. Though India offered to bring down the level of pesticides and use of HWT (Hot Water
Treatment) as was being done for exports to other countries, USA only favored severe inspection standards such as nuclear
irradiation. The cost of inspection through irradiation plant is much higher than HWT.
Answer the following question.
Q1. Give an overview of the case.
Q2. Why did USA ban import of mango from India?
Q3. Despite removal of the ban, why the export of mango to USA did not pick up?
Q4. What lessons do you learn from the above case study?
CASE STUDY (20
Marks)
Ratan Tata is widely recognized as the person responsible for transforming the Tata Group, a large India-based conglomerate, from
an unwieldy collection of businesses into a relatively more nimble group of companies better prepared to take advantage of
opportunities. During Ratan Tata’s early days at the Tata Group he attempted to change the processes, people and work culture at the
Group companies. It explains the steps that he took in order to inject professionalism in the Group. It briefly examines the two
directions for growth – innovation and globalization – that he chose for the Group companies. The Group of Tata companies
flourished due to the vision, risk-taking ability and high ethical standards of Ratan Tata.
Answer the following question.
Q1. Discuss the characteristics of a successful leader.
Q2. Appreciate the attempts made by a Group head to revive the Group companies in the face of challenges posed by a
dynamic business environment.
CASE STUDY (20
Marks)
7/11/2017 Aeren Foundation
2/2
This case discusses Beijing-based multinational technology giant, Lenovo Group Limited’s (Lenovo), success story in China and its
emergence as the global brand from China. In early 2013, Lenovo emerged as the clear leader in the global Personal Computer (PC)
market. Industry experts opined that the company’s success was attributable to several strategies it had adopted in China – aggressive
pricing in its home market – China — and its acquisition strategy in mature markets such as Germany and Japan, made it a market
leader in the global PC market.
Answer the following question.
Q1. Critically analyze the strategies to be adopted by Lenovo to maintain its market leadership position in the lucrative
Chinese PC market.
Q2. Discuss how Lenovo achieved a balance in catering to global customers while customizing its practices to suit the
needs of its Chinese consumers.
CASE STUDY (20
Marks)
The case discusses the globalization efforts of Ranbaxy Laboratories (Ranbaxy), a leading pharm a company in India. Ranbaxy
started off distributing drugs in foreign countries and went on to play a major role in the global generics market. By 2004, the
company had manufacturing plants in 10 locations, ground operations in 45 countries and its products were sold in 70 countries
across the world. The case describes Ranbaxy’s foray in the US markets where it made a slow entry and adopted the route of Para IV
filings to challenge the supremacy of big pharm – a companies. By the first quarter of 2005, Ranbaxy’s sales in the US decreased by
US$ 25 million, which was attributed to severe price erosion in these markets due to increasing competition among the US generics.
The case describes the challenges facing the company in the US and examines Ranbaxy’s growth strategy for the US markets.
Answer the following question.
Q1. Discuss the challenges faced by Ranbaxy in the US.
Q2. Explain the initiatives taken by Ranbaxy in the global generics market.
Quantitative Methods ISBM EXAM ANSWER SHEET PROVIDED
Case Studies
A monte Carlo Case Study (20
Marks)
Laura,’ a 57 year old unmarried woman, earns around 68,000 dollars per year with expenditure of 37,500 dollars. She hit away
14,000 dollars each year and collected 330,000 dollars in her RRSP and TFSA, and also a rented apartment worth 250,000 dollars.
She has a iixed pension given by her employer, although it is not indicated to price rise, and Is entitled to get complete benefits of
Canada Pension Plan and Old Age Security, for retirement. She did not have a very competent portfolio: one fourth of cash is there,
and most of it was in contracted sector ETFs, single stocks and business bonds. Due to wrong entry of ETFs in the account,
unnecessary taxes were charged. Even before reconstructing Laura’s portfolio,”he had to make certain that it matched with.her
financial aims. Laura’s main aim was to ascertain if she could retire before the age of 65, maybe as early as 60, therefore she had to
know if her investments could produce enough flow of cash after she retires. Monte Carlo may show a top possibility of success with
the allotment of equity of 70% ot 80%. Through a risky questionnaire and art open interview, Justin Ill ‘ascertain that Laura was the
best person for a portfolio of 60% fixed income and 40% equities. . Through Monte Carlo software, Justin entered the current
portfolio . size of Laura, her rate of savings, projected retirement expenditure, and other employer income and government pensions.
If Laura feels that working till the age of 63 was unpleasant, she could go for the reproduction again and with different estimation.
Increasing her anticipated returns or bringing down the rate of inflation, is only a thought, therefore, she will have to make some
stronger decisions: she will have to making some more savings, or bring down her rate of planned expenses after retirement.
Amazingly, by bringing up the allotment to fixed salary could increase her opportunity to succeed: in spite of th returns being lower
than the equities, the volatility is also less, which lessens the risk of helpless decline in the early years. At last, Laura decided to work
for 6 more years and plan her retirement at the age of 63. After this, Justin decided to help her make a fresh ETF portfolio to match
that goal: it was finalized at 30% short term business bonds, 30% GICs, and the rest of it was divided among Canadian, L’S and
global equities. Laura was able to make a notified decision through the Monte Carlo simulation, but this wasn’t the end of the
procedure. In two or three years time, she will have to visit the location again to see that she is still on the right path of her retirement
goal, as many issues like, loss of job, a legacy, new connections, increase in the interest rates, all these could bring a change in the
main suppusitions 1 ; and she will have to redo her plans. The possibilities are different before the age of 63. For each added year
that Laura works, her portfolio will addition instead of a decrease and this will lead to a thrilling difference: the success rate will rise
up by 25% points if she continues to work till the age of 61 instead of 60.
Answer the following question.
Q1. How much was Laura earning at the age of 57? (Hint: 68,000 dollars per year)
CASE STUDY (20
Marks)
The cost of fuel in running of an engine is proportional to the square of the speed and is Rs 48 per hour for speed of 16 kilometers
per hour. Other expenses amount to Rs 300 per hour. What is the most economical speed?
Answer the following question.
Q1. What is most economical speed?
7/11/2017 Aeren Foundation
2/2
Q2. What is a chi-square test?
Q3. What is sampling and what are its uses.
Q4. Is there any alternative formula to find the value of Chi-square?
Finoplastika Industries Ltd, Nigeria (20
Marks)
Time series analysis has two important aims: 1) recognizing the quality of the phenomenon shown by the series of studies, and 2)
Both the aims need the plan of the viewed time series data is recognized and somewhat officially explained: A time series is said to
be a ‘collection of observations made in sequence with time’. For example: recording level of daily rainfall, periodical total domestic
product of US, and monthly strength of the. workers in Marine Corps for a specific rank and MOS. The evaluation of time series
gives instruments for picking a symbolic model and delivering forecasts. There are two sorts of times series data: • Continuous: in
this the data consists of study at every moment, for example, seismic movement recorded on a seismogram. • Discrete: the data
contains recordings taken at different periods ,like, statistics of each month crime. Until the data is absolutely haphazard, studies in
time series are usually related to each and the following studies could be partly ascertain by the last values. For instance, the reasons
pertaining to the meteorology which have an effect on the temperature for any given day tend to have some affect on the next day’s
climate. Hence, the observations of the past temperature are helpful for predicting temperatures for the following days. • A time
series can be deterministic if there are no haphazard or feasible features but goes in a set and foreseeable manner. The data gathered
during the classical physics experiment like showing Newton’s Law of Motion, is one example of a deterministic time series. The
stochastic type of series is more appropriate to the econometric function. Stochastic variables contain undefined or arbitrary
viewpoint. Though the worth of each study cannot be precisely foreseen, calculating the various observations could follow the
expected method. These methods can be explained through the statistical models. According to these models, studies differ
erratically on the underlying mean value whtch is the role of time. Time series data can be put in the following categories: one or
more performance factors; trend, seasonality, cyclical function and random sound. Various kinds of time series predicting models
give forecasts through extrapolating the previous performance of the values of a specified \’l!riable of interest. Consecutive study in
econometric times series are generally not free and forecast can be made on the basis of last observations. Although precise
predictions can be made with deterministic time series, predictions of stochastic time series are restricted to ‘conditional statements
regarding the future on the basis of particular hypothesis.’ Armstrong (2001) says, “The basic Assumption is that the variable ui!!
continue in the future as it has behaved in the past. ” Particularly, the time series predictions are suitable for stochastic type of data in
which the fundamental root cause of variation like, trend, cyclical performance, seasonality, and uneven variations, do not change
radically m time. Therefore, modeling is considered to be more suitable temporarily instead of permanent predictions.
Answer the following question.
Q1.
Write briefly on time-series analysis. (Hint: recognizing the quality of the phenomenon shown by the series of
studies, and, both the aims need the plan of the viewed time series data is recognized and somewhat officially
explained)
CASE STUDY (20
Marks)
The price P per unit at which a company can sell all that it produces is given by the function P(x) = 300 — 4x. The cost function is
c(x) = 500 + 28x where x is the number of units produced. Find x so that the profit is maximum.
Answer the following question.
Q1. Find the value of x.
Q2. In using regression analysis for making predictions what are the assumptions involved.
Q3. What is a simple linear regression model?
Q4. What is a scatter diagram method?
Answer the following question.
Q1. Discuss Agent and agency (10 marks)
Q2. State kinds of guarantee (10 marks)
Q3. How to resolve disputes (10 marks)
Q4. Discuss FDI (10 marks)
Q5. What is possession and retention of foreign currency (10 marks)
Q6. Explain delivery (10 marks)
Q7. Distinguish sale and hire purchase (10 marks)
Q8. Explain dissolution. (10 marks)
Financial Management ISBM EXAM ANSWER SHEET PROVIDED
Answer the following question.
Q1. How are financial trades made in an over the counter market? Discuss the role of a dealer in the OTC market. (10
marks)
Q2. What is the basic goal of a business? (10
marks)
Q3. Determination of capital structure of a company is influenced by a number of factors’ explain six such factors. (10
marks)
Q4. To avoid the problem of shortage and surplus of funds, what is required in Financial management? Name the concept
and explain four points of importance.
(10
marks)
Q5. What is meant by capital budgeting decision? (10
marks)
Q6. What is meant by Financial Planning? (10
marks)
Q7. State the decisions involved in Financial management. (10
marks)
Q8. Why we use WACC? (10
marks)
Human Resource Management ISBM EXAM ANSWER SHEET PROVIDED
Case Studies
CASE STUDY (20
Marks)
The Punjab Machine Tools Corporation (PMTC) is in the business of metal cutting and metal forming tools is facing competition at
national and international levels. The business of the PMTC changes with the capacity utilization of user industries. In a recent
meeting the MD of PMTC Mr. Gyan chand was urged by the distributors to launch a high – tech metal cutting tool using latest
technology. They felt that this would help in fighting dumping of cheap second hand machinery and increase the domestic and
export market. Gyan chand realized this would increase his R&D budget. A fully automated production line increases financial
expenditure, require inventory space , training of mechanics in fully automated robots and gadgets . Gyan chand recalled the
previous market meetings wherein, the marketing people wanted many varieties of machine cutting tools but never appreciated its
financial burden. PMTC so far has successfully managed the business with two models of cutting tools and Gyan chand realized that
no need for new models but to improve existing models and reduce its cost and sales price. The customers are interested in getting
value for their money. Gyan chand sought the opinion of a consultancy firm in this regard .
Answer the following question.
Q1. What do you think is the mission of PMTC?
Q2. What kind of opportunities and threats exist for PMTC?
Q3. Evaluate the strength and weakness of PMTC?
Q4. What factors are critical for PMTC’s success or failure?
CASE STUDY (20
Marks)
Hyundai Motor Co., formed in 1967, was a part of the large South Korean Chaebol – the Hyundai Group – until the group split in
September 2000. In the last four decades, Hyundai managed to establish itself all over the world as a company producing reliable,
technically sound and stylish automobiles. In the 90s, the company started aggressive overseas expansion programs. By the late 90s,
when Southeast Asian crisis struck, the company like all the other chaebols, faced serious financial problems. To survive, it had to
cut its labor force. The company offered various retirement schemes, unpaid leave for two years, etc. to workers, and expressed its
inability to support its entire workforce in the slack period. The unions refused to compromise and the management too held its
ground. Finally, the government intervened to force a negotiated settlement between the union and the management
Answer the following question.
Q1. Give an overview of the case.
Q2. Discuss the damages: that unhappy management-labor relations can cause to an organization
CASE STUDY (20
Marks)
7/11/2017 Aeren Foundation
2/2
Profit . Com is a new Ecommerce company started by Ms Ding Dong Du. She is very ambitious and up beat about Indian economy.
Looking at the success of E commerce Companies in India she has big plans. She would like to attract the best talent and project the
company as most consumer friendly, quality conscious and modern. She has selected you as H R Head. How will you accomplish the
following assignments given to you?
Answer the following question.
Q1. Prepare Objectives of the Company and an action plan for the employees to make them professional.
Q2. How you will bring change in attitude of the employees to comply with the objectives Of the company?
CASE STUDY (20
Marks)
This case is about the employer branding strategies adopted by McDonald’s Corporation, one of the largest fast food chains in the
world. Since the 1980s, entry-level jobs at McDonald’s had come to be associated with low-paying dead end jobs. The term ‘McJobs’
had become synonymous with low-prestige, low-benefit, no-future jobs in the service or retail sector particularly at fast food
restaurants and retail stores. Though the term was coined to describe jobs at McDonald’s, it was later used to refer to any low-status
job where little training was required and workers’ activities were strictly regulated Because of its common usage, the term appeared
in the online version of the Oxford English Dictionary (OED) in March 2001 and the Merriam-Webster Collegiate Dictionary
(Merriam-Webster Dictionary) in 2003. The case discusses how McDonald’s systemically tried to redefine the term ‘McJobs’ and
improve its employer brand since the early 2000s. According to McDonald’s, this negative interpretation of McJobs was not only
inaccurate but also demeaning to the thousands of people working in the service sector. As employer branding was a critical
management tool for companies to attract the right talent, McDonald’s decided to try and revise the image associated with McJobs.
This it did by taking various initiatives that also included advertising campaigns aimed at showcasing the benefits of working at
McDonald’s and bridging the divide between people’s perceptions of the McJob and the real employment experience of people
actually working for the fast-food chain. Experts felt that these were some of the best examples of a company successfully planning
and implementing an employee branding strategy. However, the case also highlights the challenges faced by McDonald’s in
attracting new talent as derogatory comments continued to be made about McJobs and this could discourage prospective employees
from taking up such jobs.
Answer the following question.
Q1. What is the importance of employer branding and its relationship with the ability of a company to attract talent.
Q2. Explain the issues and challenges in planning and implementing an employer branding initiative.
International Business ISBM EXAM ANSWER SHEET PROVIDED
Case Studies
CASE STUDY (20
Marks)
In the worldwide production of mango, India stands on the top, which supplies about 40% of world mangoes. Nevertheless, the
export of mango is only 1% of the total production. It is because of shortage of export supply chain, high cost off transport and those
mangoes which cannot be exported. Indian mangoes are mostly exported to Arab countries, Nepal, Bangladesh and United
Kingdom. As compared to the US market, which is more profitable market, all the others bring much lesser profit. USA is the largest
importer of mangoes in the world. About 50 % mangoes are imported from Mexico by USA. India exports only insignificant amount
of mangoes to USA. This happened because of ban on import of mango from India inflicted by US between 1989 and 2006. In 2006
the ban was lifted but the enforcement of the inspection standards remained controversial. The ban was imposed by USA on Indian
mango because of over usage of pesticides. Though India offered to bring down the level of pesticides and use of HWT (Hot Water
Treatment) as was being done for exports to other countries, USA only favored severe inspection standards such as nuclear
irradiation. The cost of inspection through irradiation plant is much higher than HWT.
Answer the following question.
Q1. Give an overview of the case.
Q2. Why did USA ban import of mango from India?
Q3. Despite removal of the ban, why the export of mango to USA did not pick up?
Q4. What lessons do you learn from the above case study?
CASE STUDY (20
Marks)
Ratan Tata is widely recognized as the person responsible for transforming the Tata Group, a large India-based conglomerate, from
an unwieldy collection of businesses into a relatively more nimble group of companies better prepared to take advantage of
opportunities. During Ratan Tata’s early days at the Tata Group he attempted to change the processes, people and work culture at the
Group companies. It explains the steps that he took in order to inject professionalism in the Group. It briefly examines the two
directions for growth – innovation and globalization – that he chose for the Group companies. The Group of Tata companies
flourished due to the vision, risk-taking ability and high ethical standards of Ratan Tata.
Answer the following question.
Q1. Discuss the characteristics of a successful leader.
Q2. Appreciate the attempts made by a Group head to revive the Group companies in the face of challenges posed by a
dynamic business environment.
CASE STUDY (20
Marks)
7/11/2017 Aeren Foundation
2/2
This case discusses Beijing-based multinational technology giant, Lenovo Group Limited’s (Lenovo), success story in China and its
emergence as the global brand from China. In early 2013, Lenovo emerged as the clear leader in the global Personal Computer (PC)
market. Industry experts opined that the company’s success was attributable to several strategies it had adopted in China – aggressive
pricing in its home market – China — and its acquisition strategy in mature markets such as Germany and Japan, made it a market
leader in the global PC market.
Answer the following question.
Q1. Critically analyze the strategies to be adopted by Lenovo to maintain its market leadership position in the lucrative
Chinese PC market.
Q2. Discuss how Lenovo achieved a balance in catering to global customers while customizing its practices to suit the
needs of its Chinese consumers.
CASE STUDY (20
Marks)
The case discusses the globalization efforts of Ranbaxy Laboratories (Ranbaxy), a leading pharm a company in India. Ranbaxy
started off distributing drugs in foreign countries and went on to play a major role in the global generics market. By 2004, the
company had manufacturing plants in 10 locations, ground operations in 45 countries and its products were sold in 70 countries
across the world. The case describes Ranbaxy’s foray in the US markets where it made a slow entry and adopted the route of Para IV
filings to challenge the supremacy of big pharm – a companies. By the first quarter of 2005, Ranbaxy’s sales in the US decreased by
US$ 25 million, which was attributed to severe price erosion in these markets due to increasing competition among the US generics.
The case describes the challenges facing the company in the US and examines Ranbaxy’s growth strategy for the US markets.
Answer the following question.
Q1. Discuss the challenges faced by Ranbaxy in the US.
Q2. Explain the initiatives taken by Ranbaxy in the global generics market.
Quantitative Methods ISBM EXAM ANSWER SHEET PROVIDED
Case Studies
A monte Carlo Case Study (20
Marks)
Laura,’ a 57 year old unmarried woman, earns around 68,000 dollars per year with expenditure of 37,500 dollars. She hit away
14,000 dollars each year and collected 330,000 dollars in her RRSP and TFSA, and also a rented apartment worth 250,000 dollars.
She has a iixed pension given by her employer, although it is not indicated to price rise, and Is entitled to get complete benefits of
Canada Pension Plan and Old Age Security, for retirement. She did not have a very competent portfolio: one fourth of cash is there,
and most of it was in contracted sector ETFs, single stocks and business bonds. Due to wrong entry of ETFs in the account,
unnecessary taxes were charged. Even before reconstructing Laura’s portfolio,”he had to make certain that it matched with.her
financial aims. Laura’s main aim was to ascertain if she could retire before the age of 65, maybe as early as 60, therefore she had to
know if her investments could produce enough flow of cash after she retires. Monte Carlo may show a top possibility of success with
the allotment of equity of 70% ot 80%. Through a risky questionnaire and art open interview, Justin Ill ‘ascertain that Laura was the
best person for a portfolio of 60% fixed income and 40% equities. . Through Monte Carlo software, Justin entered the current
portfolio . size of Laura, her rate of savings, projected retirement expenditure, and other employer income and government pensions.
If Laura feels that working till the age of 63 was unpleasant, she could go for the reproduction again and with different estimation.
Increasing her anticipated returns or bringing down the rate of inflation, is only a thought, therefore, she will have to make some
stronger decisions: she will have to making some more savings, or bring down her rate of planned expenses after retirement.
Amazingly, by bringing up the allotment to fixed salary could increase her opportunity to succeed: in spite of th returns being lower
than the equities, the volatility is also less, which lessens the risk of helpless decline in the early years. At last, Laura decided to work
for 6 more years and plan her retirement at the age of 63. After this, Justin decided to help her make a fresh ETF portfolio to match
that goal: it was finalized at 30% short term business bonds, 30% GICs, and the rest of it was divided among Canadian, L’S and
global equities. Laura was able to make a notified decision through the Monte Carlo simulation, but this wasn’t the end of the
procedure. In two or three years time, she will have to visit the location again to see that she is still on the right path of her retirement
goal, as many issues like, loss of job, a legacy, new connections, increase in the interest rates, all these could bring a change in the
main suppusitions 1 ; and she will have to redo her plans. The possibilities are different before the age of 63. For each added year
that Laura works, her portfolio will addition instead of a decrease and this will lead to a thrilling difference: the success rate will rise
up by 25% points if she continues to work till the age of 61 instead of 60.
Answer the following question.
Q1. How much was Laura earning at the age of 57? (Hint: 68,000 dollars per year)
CASE STUDY (20
Marks)
The cost of fuel in running of an engine is proportional to the square of the speed and is Rs 48 per hour for speed of 16 kilometers
per hour. Other expenses amount to Rs 300 per hour. What is the most economical speed?
Answer the following question.
Q1. What is most economical speed?
7/11/2017 Aeren Foundation
2/2
Q2. What is a chi-square test?
Q3. What is sampling and what are its uses.
Q4. Is there any alternative formula to find the value of Chi-square?
Finoplastika Industries Ltd, Nigeria (20
Marks)
Time series analysis has two important aims: 1) recognizing the quality of the phenomenon shown by the series of studies, and 2)
Both the aims need the plan of the viewed time series data is recognized and somewhat officially explained: A time series is said to
be a ‘collection of observations made in sequence with time’. For example: recording level of daily rainfall, periodical total domestic
product of US, and monthly strength of the. workers in Marine Corps for a specific rank and MOS. The evaluation of time series
gives instruments for picking a symbolic model and delivering forecasts. There are two sorts of times series data: • Continuous: in
this the data consists of study at every moment, for example, seismic movement recorded on a seismogram. • Discrete: the data
contains recordings taken at different periods ,like, statistics of each month crime. Until the data is absolutely haphazard, studies in
time series are usually related to each and the following studies could be partly ascertain by the last values. For instance, the reasons
pertaining to the meteorology which have an effect on the temperature for any given day tend to have some affect on the next day’s
climate. Hence, the observations of the past temperature are helpful for predicting temperatures for the following days. • A time
series can be deterministic if there are no haphazard or feasible features but goes in a set and foreseeable manner. The data gathered
during the classical physics experiment like showing Newton’s Law of Motion, is one example of a deterministic time series. The
stochastic type of series is more appropriate to the econometric function. Stochastic variables contain undefined or arbitrary
viewpoint. Though the worth of each study cannot be precisely foreseen, calculating the various observations could follow the
expected method. These methods can be explained through the statistical models. According to these models, studies differ
erratically on the underlying mean value whtch is the role of time. Time series data can be put in the following categories: one or
more performance factors; trend, seasonality, cyclical function and random sound. Various kinds of time series predicting models
give forecasts through extrapolating the previous performance of the values of a specified \’l!riable of interest. Consecutive study in
econometric times series are generally not free and forecast can be made on the basis of last observations. Although precise
predictions can be made with deterministic time series, predictions of stochastic time series are restricted to ‘conditional statements
regarding the future on the basis of particular hypothesis.’ Armstrong (2001) says, “The basic Assumption is that the variable ui!!
continue in the future as it has behaved in the past. ” Particularly, the time series predictions are suitable for stochastic type of data in
which the fundamental root cause of variation like, trend, cyclical performance, seasonality, and uneven variations, do not change
radically m time. Therefore, modeling is considered to be more suitable temporarily instead of permanent predictions.
Answer the following question.
Q1.
Write briefly on time-series analysis. (Hint: recognizing the quality of the phenomenon shown by the series of
studies, and, both the aims need the plan of the viewed time series data is recognized and somewhat officially
explained)
CASE STUDY (20
Marks)
The price P per unit at which a company can sell all that it produces is given by the function P(x) = 300 — 4x. The cost function is
c(x) = 500 + 28x where x is the number of units produced. Find x so that the profit is maximum.
Answer the following question.
Q1. Find the value of x.
Q2. In using regression analysis for making predictions what are the assumptions involved.
Q3. What is a simple linear regression model?
Q4. What is a scatter diagram method?
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