beta - fachcha summers starter kit

8/12/2019 Beta - Fachcha Summers Starter Kit

1/45

S P M

B T F C IIM A P


2/45

S P M

B T F C IIM A P

2007 08

This introductory guide has been prepared keeping in mind that most of the freshers do not have a priorexperience in finance. We aim to introduce all the basic areas and concepts of finance very briefly. Anatural step after going through this guide would be to explore each area in greater detail.

The finance companies which come during the summers understand that the freshers have not had anycourse in finance in their first semester. This is the reason why a lot of puzzles based on probability,logic and algorithms are asked in the interviews to gauge the students thought process and quantitative

ability. We recommend the book Fifty Challenging problems in Probability by Frederic Mosteller as a preparation for probability based problems (A soft copy is available). For other general puzzles we haveincluded a section in this kit.

We have also compiled the questions which were asked in actual interviews in previous years. Thesewill give a fair idea of what the companies expect from our students.

We hope that this starter kit is just the first stage of your preparation and not considered as a selfcontained interview preparation material.

Ashish Kumar Coordinator

Members

Vibhor TikiyaKaushik MukherjeeTarun JainRanjith P AjaykumarPiyush AnchaliyaVipul JainPrateek JainAbhishek Ruwatia

Soumya Dwibedi


3/45

S P M

B T F C IIM A P

Areas Covered

1. O F , D A F I .4

2. S M B .103. C F 15

4. M A A ..22

5. P E ...28

6. D R M ...30

7. T S I O ..37

8. I Q 43


4/45

S P M

B T F C IIM A P

What is Finance? (Credits: Wikipedia)

F , , , ,

. T

T ; T ; P ;

T ; A , " " '

, .).

T ( ) ,

.

What are Markets? [Credits: T Balaji]

M . P ( ). A

( . A ( . . )

. F .

W ? I . E . W . Y

(

. Y . S :

Overview of Finance, Different Areas and Financial Institutions


5/45


6/45

S P M

B T F C IIM A P

W ? B . T . T . S

.

S . O

, . N ( !). N , ? M

; ,

. T . T ()

.

T . T . I

( ) . O

. I . I , ,

.

M . O

. S ( ) , ( ), ( . I

( , , E ).

A S . T O T C

. T

, . M . T . H ,

. Y . OTC . I OTC

. H , .


7/45


8/45

S P M

B T F C IIM A P

/ .

S . T ALM

. B . S . O

, .

Insurance Firms

I . T . T

T I ,

, ). I , , .T . T

.

. M IB . O

.

Funds

F . T . T (

% ).

. . P .

. T . S ,

M

. T . T . S

. P . W , .

E ( ),


9/45

S P M

B T F C IIM A P

( ) .

H . M P . T

. M

(

Corporates

C . T IB !

W . S C

. C (

R ,

. T . H ,

. S . I

IPO . S (

T H .

C . A , ( ) . T

. T IB .


10/45

S P M

B T F C IIM A P

A / W

. T ' . T

.

T B S E (BSE) N S E I L (NSE) I . I , 22 R S E . NSE R .44,04,989 . T

BSE S 30 . NSE S&P NSE 50 I (N ) . B . T BSE

'F' 'Z' . T 'A' , ( ) . T 'Z'

. T 'C' 'A', 'B1' & 'B2' .

T S E , B , D , D F , FII I SE B I (SEBI) L .

:

T D J I A (DJIA) 30 U.S. I ,

".

T DJIA 30 . T S&P 500 DJIA 500 . I

. I , S&T N C I N

N C ,

FTSE 100 U K ,H S H K , NDAX G , T S E (TSX) C , CAC 40 F .

Stock Market Basics


11/45

S P M

B T F C IIM A P

I ,

. A NSE BSE, T+2 . . 2 . F , M W

C : .A . A

. I , ' IPO.

A '

. I ' , ' . P

, . T IPO " .

. T .

G , . B B , A , . T ,

. T . T , .

W , . (

. G S , M L , C S F B , L

M S . T ,

. T , ,

.

T . T

' .


12/45

S P M

B T F C IIM A P

W , . T " "

.

A , ' : , ,

. O , ' '

?

' D

T

: T ' . I ,

. I I . NSDL CDSL. A

D P .

: T D P (DP). A SEBI

,

.

A :

T . I , 0.5% . A /

N

. I & R

,

N , . H

( ) /

(


13/45

S P M

B T F C IIM A P

) . I ,

. M M .

T , : : T . F . . I

. : G ,

. : A (LTP) S

. T . A

I , SEBI . T '

.

I I . W ,

, / ,

I

T , . Y ' . . , . . , . .

. . .

T , , . B , , , ,

.D . C ' ,

. D P/E ( ), (EPS),

, . G ,


14/45

S P M

B T F C IIM A P

, , ,

. T . A :

H ( ) : T . L ( ) : T . C ( ) : T C (C ) : T ' Y (Y ) : D B A (O ) P

W , B

T . I / , .

T A ( ) ' . . / . T

, A , ' . A

, , (FII ?). W : /

? I ' , .

N ' ': ; . W , ' .


15/45

S P M

B T F C IIM A P

A F 2.1, . N

B , 12 F , .

. G ; . L

. A A

T , E ,

, :

Corporate Finance


16/45

S P M

B T F C IIM A P

S =A L

T .T ( ), . A

, .

A . T .S $

. O , $5,000 $5,000 ,

.

A

: , , .

. E

A C 1,

. (

). F , .


17/45

S P M

B T F C IIM A P

:


18/45

S P M

B T F C IIM A P

( )T

W $1 10 $1.10 : H 10 $1

, $1, ( )? T . W 1.1

$1 :

T , 1/(1 ) , . B , .W ,

. W . T ( )


19/45

S P M

B T F C IIM A P

$1 PVIF( , ). F ,

( ) .

:


20/45

S P M

B T F C IIM A P


21/45

S P M

B T F C IIM A P


22/45

S P M

B T F C IIM A P


23/45

S P M

B T F C IIM A P

Definition (Credits: Economist Conference, Wikipedia,BanknetIndia)

(Investopedia, HowStuffWorks)

T ( M&A) , , ,

.

M ,

, . I , , ,

'

Types of Acquisitions

T , , O , ,

.

T . T

, . A

" ", " " " " ,

Classification

H .

Mergers & Acquisitions a quick read


24/45

S P M

B T F C IIM A P

V , , .

C

Basis of Financial Valuation

A ' A

P/E.

D , ' EPS . T P/E P/E.

T E B I T D A (EBITDA) S ' D C F

T , , . T ,

. H

C R T :

o P E R (P/E R ) W ,

L P/E ' P/E

o E V S R (EV/S ) W , , ,

R C I , . T '

D C F (DCF) A M&A, '


25/45

S P M

B T F C IIM A P

F ( + / )

(WACC)

Financing of Acquisitions

M . V

M&A : C

o P . S

( ) .

o A A

EPS . B .

Fo F ,

A ,

Ho A ,

Major Global Trends M&A drivers

G C I A : C 48.7 1999 2000 71.4

G , ,

P E I P G R : P ' 6 24 (1996 2006). I

PE $160 2000 $650


26/45

S P M

B T F C IIM A P

D M A H F B : T A (46.5 ), E (29.5 ). B

2006, C ' I ' 20.4

Recent M&A Findings

P E I W P L : O , PE " " . O

, ,

,

H A P D N N D V : B 199 21.7 , ,

. P ( )

B I ' N B : D $1 $1 . A

I D ' A P B F : H ' M&A T 2002 .

M&A O C S V : A 58.3 2006 , 1.2

1.8

C I K : C

, ,

The Indian M&A Story

I M&A 2007 &A

( M&A,


27/45

S P M

B T F C IIM A P

, ).

Y V H E , I , US$11.1

M&A I .

Recent Mergers & Acquisitions

Company Merged with/Acquired Reason/Benefits

Polaris Merged with OrbiTech Acquired IPR of OrbiTech's range of Orbi Bankingproduct suite.

Wipro Acquired Spectramind Aimed at expanding in the BPO space,the acquisition

gave Wipro an opportunity to run a profitable BPObusiness.

Wipro Acquired global energy practice ofAmerican Management Systems

It acquired skilled professionals and a strong customerbase in the area of energy consultancy.

Wipro Acquired the R&D divisions ofEricsson

It acquired specialised expertise and people in telecomR&D.

Wipro GE Medical Systems (India) It acquired IP from the medical systems company,which in turn gave it a platform to expand its offeringsin the Indian and Asia Pacific healthcare IT market.

vMoksha Challenger Systems & X media Primarily aimed at expanding its customer base. Thecompany also leveraged on the expertise of thecompanies in the BFSI space.

Mphasis Acquired China-based Navionsoftware

Expanded its presence in the Japanese and the Chinesemarkets. It also plans to use it as a redundancy centrefor its Indian operations.

Mascot Systems Acquired US-based eJiva andHyderabad-based Aqua Regia

Expanded in size and leveraged on technical expertiseof the acquired companies. Acquisitions have helpedthe company in offering multiple services andexpanding its customer base considerably.

Conclusion

I ' M&A , . I

, ' .

"I , M&A ," A R , B

G , K C A , J K M . "T

M&A."


28/45

S P M

B T F C IIM A P

Definition (Credits: Fundamental Capital, Wikipedia)

P O . S

. T .P IPO, , . U

( ) .

Evolution of the concept behind PE

T

. T 1980 1990 ,

.

Private Equity Today

T , ,

. T

. T , , ,

C , , ,

. T

Private Equity - basics


29/45

S P M

B T F C IIM A P

T $1 F C , LLC B B P

Investing size funds.

A V E :o 205 $1

2003. F 1984 1996, 45

o A , 2003, $540 E ). T $20

, $50 , $100

o B , $50 ,

$2 $10 .

W ,

, , $50 . T

, 220,000 US $50 , 26,000 (US C B )

T

.

Evolution of the concept behind PE

T , . T .

B T H I G , 25% 20T 15%

, ( .


30/45

S P M

B T F C IIM A P

, .

, , ( ) .

.

M

, ( ) .

T . T .

T . T .

F . I I $100 $90, $10.

T , .

F

I I $1 1 , I E , I , ( ) , ( )

E 1 .

F , .

Derivatives and Risk Management


31/45

S P M

B T F C IIM A P

F .

W / ( ) ?

I , I , .

E : S M $100 , 5% $115 .

B $5 , $10 .

T , .

I , I , I .

E : S M $100 , 5% $100 .

I , , , $105 $100 = $5

A $105,

I .

.

.

S $100.

W $110?


32/45

S P M

B T F C IIM A P

W $90? T 0, .

.

M A , E

M ,

T ( ) ( ) , M ( K ,0)

W ? I I .

T ( ) ( , 0) .

T


33/45

S P M

B T F C IIM A P

T ( ) ( ) K ( 0).

T ( , 0).

T ( ) ( ) .

.

T

. T .

T .

T .

V O

T V .

T B .

A ,

T

.

T S D

A M C , .


34/45

S P M

B T F C IIM A P

T B S . T B S E O .

P NN PP NP P

P P

P C P

T .

C (K, ) P ( K , ) = PV ( F0, K )C (K, ) P (K, ) K

, PV (F0, ) .


35/45

S P M

B T F C IIM A P

T !

M R .

C R .

L R ,

F ( ),

O R , , ( ).

S R , .

H .

T .

H . A .

F , ,

.

T

D L .

I R S , R C F .


36/45

S P M

B T F C IIM A P

P R , .

I .

F R , .


37/45

S P M

B T F C IIM A P

Few Elementary Trading Strategies Involving Options

A (C P ), . O

, , ,

:

F C C .

C ( )

.

I (S ) .

I , . S , .

I , . B . T

. S .

Elementary Trading Strategies Involving Options


38/45

S P M

B T F C IIM A P

T . A C C , P P P . T

. (I C P , , P P

P P .

N .

:

A C . O P

. S . T S . B

C P . A . E ,

, . T


39/45

S P M

B T F C IIM A P

T .

J , . I

. B , . T

.

S :

S : , . A

.

S : , .

A .

:

S . T

.


40/45

S P M

B T F C IIM A P

J ,

B , ( .

A . I , , .

T , , . Y . B (

. T ( ) . B

:


41/45

S P M

B T F C IIM A P

O , ? Y

. T . T .

F :

B S : T . T

. H . I

B S .

B S : A . I T , B .

:


42/45

S P M

B T F C IIM A P

A . A

, . T . A

, ;

. T .


43/45

S P M

B T F C IIM A P

HR Questions

1. I Y

2. W C M ?

3. D ?

4. W ?

5. W ?

6. W ?

7. W IBD M B ?8. W ' ?

9. W F 1 ?

10. W MBA? W ? W IBD?

11. W ?

12. W ?

13. W IBD ? W ?

Quantitative Questions

1. W NPV?

2. W IRR?

3. H ?

4. H ?

5. W ?

6. W / ? D .

7. W F F ? W F ?

8. W ?

9. I , ,

Interview Questions


44/45

S P M

B T F C IIM A P

?

10. W ,

11. G : 8L , 5L , 3L . H 4L?

12. W

?

13. W , R . 1 ?

14. W ?

15. E , , .

16. H IIM A?

17. P . P . T

. V .

18. H ?

19. I 80 20. T 8%

20%. W ?

20. W ?

21. W 1 ?

22. W 1 64?

23. W 1000?

24. W 64?

25. W 1064?

26. S . W >=150?

27. 10 . W

?

28. I , I

. I I ' , I

W ?

29. C X 100 . H ?

30. D IPO ?


45/45

S P M

31. Y 100 X @ 7% 5 . Y 4

7.5% 10 60 @ 8.5% 3

?

32. C ?

33. D '

34. H ?

35. W CAPM?

36. H ?

37. W WACC? W ?

38. W I

W ?

39. W P/E ?

?

40. W ?

41. I ,

42. G X1 X2 X X = X1 + X2.

43. I 1 2

E(X). W ?

44. W ? W

/ ? G 3

.

45. I I $100 I $80,

?

46. T J USD. J 4%

. 10%. Y US 6 , J

beta - fachcha summers starter kit

Documents