MUTUAL FUNDS

OVERVIEW OF MUTUAL FUND

•A Mutual Fund is a trust that pools the savings of a number of

investors who share a common financial goal. The money thus

collected is then invested in capital market instruments such as

shares, debentures and other securities.

•The income earned through these investments and the capital

appreciation realized is shared by its unit holders in proportion

to the number of units owned by them. Thus a Mutual Fund is

the most suitable investment for the common man as it offers an

opportunity to invest in a diversified, professionally managed

basket of securities at a relatively low cost.

Definition
• According to the mutual Fund Fact Book (Published by the
Investment Company Institute of the U.S.)
“ A mutual Fund ia a Financial Services Organisation that
receives money from shareholders, invests it, earns return on
it, attempts to make it grow and agrees to pay the
shareholder cash on demand for the current value of his
investment”.
According to SEBI Regulations, 1993,
“Mutual fund is a fund established in the form of a trust
by a sponsor, to raise monies by the trustees through the sale
of units to the public, under one or more schemes, for
investing in securities in accordance with these regulations”.
 History of Mutual Fund

• First Phase – 1964-87 -Unit Trust of India (UTI) was established on 1963
by an Act of Parliament. . The first scheme launched by UTI was Unit
Scheme 1964. At the end of 1988 UTI had Rs.6, 700 crores of assets under
management.
• Second Phase – 1987-1993 (Entry of Public Sector Funds) -SBI Mutual
Fund was the first non- UTI Mutual Fund established in June 1987
followed by Canara bank Mutual Fund (Dec 87), Punjab National Bank
Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India
(Jun 90), Bank of Baroda Mutual Fund (Oct 92
Cont….

• Third Phase – 1993-2003 (Entry of Private Sector Funds)

Kothari Pioneer (now merged with Franklin Templeton)
was the first private sector mutual fund registered in July
1993. As at the end of January 2003, there were 33
mutual funds with total assets of Rs. 1, 21,805 crores.
• Fourth Phase – since February 2003 -In February
2003, following the repeal of the Unit Trust of India Act
1963 UTI was bifurcated into two separate entities.
Cont….
• One is the Specified Undertaking of the Unit Trust of India with
assets under management of Rs.29, 835 crores as at the end of
January 2003, representing broadly, the assets of US 64
scheme, assured return and certain other schemes. The Specified
Undertaking of Unit Trust of India, functioning under an
administrator and under the rules framed by Government of India
and does not come under the purview of the Mutual Fund
Regulations
• The second is the UTI Mutual Fund Ltd, sponsored by
SBI, PNB, BOB and LIC. It is registered with SEBI and functions
under the Mutual Fund Regulations
MUTUAL FUND OPERATION FLOW
CHART

Investors
Given back to
Pool their money in

Return Fund

That generates Which is invested in

Securities
 TYPES OF MUTUAL FUNDS
 No matter what type of investor you are, there is bound
to be a mutual fund that fits your style.
It's important to understand that each mutual fund has
different risks and rewards. In general, the higher the
potential return, the higher the risk of loss. Although
some funds are less risky than others, all funds have
some level of risk - it's never possible to diversify away
all risk. This is a fact for all investments.
Each fund has a predetermined investment objective
that tailors the fund's assets, regions of investments and
investment strategies. At the fundamental level, mutual
funds can be classified on three parameters:
1) On the basis of structure.
2) On the basis of investment objective.
3) On the basis of special schemes.
 TYPES OF MUTUAL FUNDS
Type of
Mutual Fund
Schemes

Special
Investment
Structure Schemes
Objective

Open Ended  Tax saving

Income Schemes
Funds
Funds
Close Index
Growth Funds
Ended Schemes
Funds
Interval Sectoral
scheme Balanced Funds
Schemes
Money Market
Funds
 ON THE BASIS OF STRUCTURE
 Open ended Schemes
 Closed ended Schemes.

 Interval Schemes
 OPEN ENDED SCHEMES
 Open ended Schemes are schemes which offers
unit for sale without specifying any duration for
redemption.
 They sell and repurchase schemes on a continuous
basis.
 The main feature of such kind of scheme is liquidity

 No listing in stock exchange

 Sale and purchase based on NAV of the units

 CLOSED ENDED SCHEMES
 These are the schemes in which redemption period
is specified.
 Once the units are sold by mutual funds, then any
transaction takes place in secondary market only i.e
stock exchange.
 Price is determined by forces of market.

 Corpus normally does not change throughout the

year
 Liquidity is available to investors at the time of
redemption.
 INTERVAL SCHEMES
 It is a kind of close ended scheme with a peculiar
feature that every for a specific period it is made
open.
 Prior to and after such interval the scheme operates
as closed ended schemes.
 During the said period, mutual fund is ready to buy
and sell the units directly from or to the investor
 ON THE BASIS OF GROWTH OBJECTIVE

 Income funds
 Growth funds

 Balanced Funds

 Money Market funds

 INCOME FUNDS

 Funds that invest in medium to long-term debt

instruments issued by private companies, banks,
financial institutions, governments and other entities
belonging to various sectors (like infrastructure
companies etc.) are known as Debt / Income Funds
 To maximize the current income is the objective of the
scheme.
 Investment made in low risk securities
 Income earned by units is distributed to unit holders
periodically.
 GROWTH FUND
 The aim of growth funds is to provide capital
appreciation over the medium to long- term. Such
schemes normally invest a major part of their
corpus in equities. Such funds have comparatively
high risks
 They do not offer regular income
 BALANCED FUND
 These funds provide both growth and regular
income as these schemes invest in debt and equity.
 The NAV of these schemes is less volatile as
compared pure equity funds.
 MONEY MARKET FUNDS
 Money market / liquid funds invest in short-term
(maturing within one year) interest bearing debt
instruments. These securities are highly liquid and
provide safety of investment, thus making money
market / liquid funds the safest investment option
when compared with other mutual fund types.
ON THE BASIS OF SPECIAL SCHEMES
 Tax saving Schemes
 Index Schemes

 Sectoral Schemes.
 TAX SAVING SCHEMES
 These schemes provide tax incentives to individual
tax payer under section 80C of Income Tax Act.
 This helps individual to reduce his tax liability
 These funds will have minimum lock in period of
three years
 INDEX SCHEMES
 In this schemes, the funds collected by mutual
funds are invested in shares forming the Stock
Exchange Index.
 Example- Nifty Index Scheme of UTI Mutual Fund
and Sensex Index Scheme of Tata Mutual Fund.
 SECTOR SCHEMES
•Sector funds are those mutual funds which
invest in a particular sector of the market, e.g.
FMCG, banking, information technology etc.
Sector Schemes invest only in the industries
specified in the offer document.
• Sector funds are riskier than equity diversified
funds since they invest in shares belonging to
a particular sector which gives them fewer
diversification opportunities
 OTHER SCHEMES
 Gilt Security Schemes
 Funds of Funds

 Domestic Funds

 Offshore Schemes.
The below table summarizes the funds based on their
nature of risk

Nature of risk Categories of funds

Low risk Money market funds G-Sec funds

Income funds Short term plans

Moderate risk Balanced funds

Index funds Growth funds Sector

High risk funds
 Advantages of investing in a Mutual Fund
• Affordability
A mutual fund invests in a portfolio of assets, i.e. bonds, shares,
etc. depending upon the investment objective of the scheme. An investor
can buy in to a portfolio of equities, which would otherwise be
extremely expensive. Each unit holder thus gets an exposure to such
portfolios with an investment as modest as Rs.5000/-.
• Diversification
We must spread our investment across different securities
(stocks, bonds, money market instruments, real estate, fixed deposits etc.)
and different sectors (auto, textile, information technology etc.).
• Variety
Mutual funds offer a tremendous variety of schemes.
• Professional Management
Qualified investment professionals who seek to maximize returns and
minimize risk monitor investor's money.
•Transparency

Being under a regulatory framework, mutual funds have to

disclose their holdings, investment pattern and all the information
that can be considered as material, before all investors. SEBI acts
as a watchdog and safeguards investors’ interests

• Liquidity

A distinct advantage of a mutual fund over other investments is

that there is always a market for its unit/ shares. It's easy to
get one’s money out of a mutual fund. Redemptions can be made
by filling a form attached with the account statement of an
investor.
 Risk associated with Mutual Fund

• Professional Management- Some funds don’t perform in the market, as

their management is not dynamic enough to explore the available opportunity in
the market.
• Costs – The biggest source of AMC income is generally from the entry & exit
load which they charge from investors, at the time of purchase. The mutual fund
industries are thus charging extra cost under layers of jargon.
• Dilution - Because funds have small holdings across different companies, high
returns from a few investments often don't make much difference on the overall
return.
• Taxes - when making decisions about your money, fund managers don't consider
your personal tax situation. For example, when a fund manager sells a security, a
capital-gain tax is triggered, which affects how profitable the individual is from the
sale.
Asset Under Management (AUM)

AUMis a term used by financial services

companies in the mutual fund, hedge fund,
and money management, investment
management, wealth management, and private
banking businesses to gauge how much
money they are managing. Many financial
services companies use this as a measure of
success and comparison against their
competitors.
 How to choose a fund for Investing ?
• Expense Ratio: Denotes the annual expenses of the
funds, including the management fee and administrative cost.
Lower expense ratio is better.
• Sharpe Ratio: An indicator of whether an investment's return
is due to smart investing decisions or a result of excess risk.
Higher Sharpe Ratio is better
• Alpha Ratio: Measures risk relative to the market or
benchmark index. For investors, the more positive an alpha is,
the better it is.
• R-squared: Measures the percentage of an investment's
movement that are attributable to movements in its
benchmark index. A mutual fund should have a balance in
R-square and ideally it should not be more than 90
and less than 80.
Various Mutual Funds in India

 State Bank of India mutual fund

 ICICI prudential mutual fund
 TATA mutual fund
 HDFC mutual fund
 Birla sun life mutual fund
 Reliance mutual fund
 Kotak Mahindra mutual fund etc..
 DEPOSITORY
A depository is an organisation which
holds securities of investors in
electronic form at the request of the
investors through registered
depository participants

A depository is a facility such as a building, office or warehouse

where something is deposited for storage or safeguarding. It can
refer to an organization, bank or an institution that holds and
assists in the trading of securities. The term can also refer to a
depository institution that accepts currency deposits from
customers.
• What is Depository? 
An organization where the securities of an
investor are held in electronic form at the
request of the investor and which carries out the
securities transactions by book entry through
the medium of a depository participant.
•  What is a Depository System?
A system whereby transfer of securities takes
place by means of book entry on the ledgers of
the Depository without physical movement of
scripts.
Contd…..
• The term Depository means a place where a deposit of money,
securities, property etc is deposited for safekeeping under the
terms of depository agreement .
• A depository is an organisation, which assists in the allotment
and transfer of securities and securities lending.
• The shares here are held in the form of electronic accounts i.e
dematerialised form and the depository system revolves
around the concept of paper-less or scrip-less trading.
•  It holds the securities of the investors in the form of electronic
book entries avoiding risks associated with paper
• It is not mandatory and is left to the investor to decide
• Depositories carry out its operations through various
functionaries called business partners
 FOLLOWING PROBLEMS RESULTED IN
FORMATION OF DEPOSITORY
Before introduction of Depository system, the problems faced by
investors and corporate in handling large volume of paper were
as follows:
• Bad deliveries
• Fake certificates
• Loss of certificates in transit
• Mutilation of certificates
• Delays in transfer
• Long settlement cycles
• Mismatch of signatures
• Delay in refund and remission of dividend etc
FEATURES OF DEPOSITORY SYSTEM 

• In the depository system, securities are held in

depository accounts, which is more or less similar to
holding funds in bank accounts.
• Transfer of ownership of securities is done through
simple account transfers.
• This method does away with all the risks and hassles
normally associated with paperwork.
• Consequently, the cost of transacting in a depository
environment is considerably lower as compared to
transacting in certificates.
National Securities Depository Limited (NSDL)
Central Depository Services India Ltd (CDSL) 
 National Securities Depository Limited (NSDL) is an Indian central securities depository based
in Mumbai. It was established on 8 November 1996 as the first electronic securities depository
in India with national coverage based on a suggestion by a national institution responsible for
the economic development of India 

 Central Depository Services (India) Ltd (CDSL), is the second Indian central securities
depository based in Mumbai. Its main function is the holding securities either in certificated or
uncertificated (dematerialized) form, to enable book entry transfer of securities

One of the main function of the Depository is to transfer the ownership of shares from one
investor`s account to another investor`s account whenever the trade takes place. It helps in
reducing the paper work involved in trade, expedites the transfer and reduces the risk
associated with physical shares such as damaged, theft, interceptions and subsequent misuse of
the certificates or fake securities.
National Securities Depository Limited (NSDL)
Central Depository Services India Ltd (CDSL) 

Functions / Services
Enables the surrender and withdrawal of securities to and from
the depository
Maintains investors holdings in the electronic form
Transfer of securities
Receipt of allotment in public offerings of companies
Pledging / hypothecation of de –materialized securities
Receipt of non cash corporate benefits like bonus rights, bonus
rights etc in electronic form
Parties involved in Depository System:

Depository: facilitates the smooth flow of trading and ensure

the investor`s about their investment in securities

Depository Participant(DP): provides the service of opening a

demat account to the investor.

Investor: individual invested in securities.

Stock Exchanges : Secondary Market

Clearing House: Handling clearing operations for respective
stock exchanges
 Objectives of Depository
System

 Reduce time for transfer of securities

 Avoid risk of settlement
 Enhance liquidity & efficiency
Reduce cost of transaction
 Create a system for central handling of all securities
 Benefits of Depository System
 Elimination of bad deliveries
Elimination of all risk associated with physical certificates
No stamp duty
Immediate transfer and registration of securities
Faster settlement cycle
Faster disbursement of non cash corporate benefits like rights, bonus etc
Reduction in brokers’ cost
Reduction in paper work
Periodic status of report
Elimination of problems related to transmission of demat shares
Elimination of problems related to change of address of investor
 Elimination of problems related to selling securities on behalf of a minor
Ease in portfolio monitoring
 Factoring
– Factoring is a financial transaction and a type of debtor
finance in which a business sells its account
receivable (i.e., invoices) to a third party (called a factor) at
a discount
– A business will sometimes factor its receivable assets to meet
its present and immediate cash needs
– A factor is a 
financial intermediary that purchases receivables from a
company
A factor is essentially a funding source that agrees to pay the
company the value of the invoice less a discount for commission
and fees
The factor advances most of the invoiced amount to the
company immediately and the balance upon receipt of funds
from the invoiced party
 Factoring
– Factoring is a financial option for the management of
receivables
– In simple definition it is the conversion of credit sales into
cash
– In factoring, a financial institution (factor) buys the accounts
receivable of a company (Client) and pays up to 80%(rarely
up to 90%) of the amount immediately on agreement
– Factoring company pays the remaining amount (Balance
20%-finance cost-operating cost) to the client when the
customer pays the debt
– Collection of debt from the customer is done either by the
factor or the client depending upon the type of factoring
 SERVICES OFFERED BY A FACTOR
– Follow-up and collection of Receivables from Clients

– Purchase of Receivables with or without recourse

(Credit Financing)

– Help in getting information and credit line on customers

– credit protection

– Sorting out disputes, if any, due to his relationship with Buyer &
Seller
PROCESS INVOLVED IN FACTORING
 PROCESS INVOLVED IN FACTORING
– A credit sale with a customer

– Client sells the customer’s account to the Factor and notifies the
customer

– Factor makes part payment (advance) against account purchased,

after adjusting for commission and interest on the advance

– Factor maintains the customer’s account and follows up for payment

– Customer remits the amount due to the Factor

– Factor makes the final payment to the Client when the account is
collected or on the guaranteed payment date
TYPES OF FACTORING
 Recourse Factoring

 Non-recourse Factoring

 Maturity Factoring

 Cross-border Factoring
 RECOURSE FACTORING
 Up to 75% to 85% of the Invoice Receivable is factored.
 Interest is charged from the date of advance to the date of
collection.
 Factor purchases Receivables on the condition that loss
arising on account of non-recovery will be borne by the Client.
 Credit Risk is with the Client.
 Factor does not participate in the credit sanction process.
 In India, factoring is done with recourse.
NON-RECOURSE FACTORING
 Factor purchases Receivables on the
condition that the Factor has no recourse
to the Client, if the debt turns out to be
non-recoverable.
 Credit risk is with the Factor.
 Higher commission is charged.
 Factor participates in credit sanction
process and approves credit limit given
by the Client to the Customer.
 In USA/UK, factoring is commonly done
without recourse
 MATURITY FACTORING
Factor does not make entire amount in advance payment
to the Client.
Pays on guaranteed payment date or on collection of
Receivables.
Guaranteed payment date is usually fixed taking into
account previous collection experience of the Client.
Nominal Commission is charged.
No risk to Factor.
 CROSS - BORDER FACTORING
It is similar to domestic factoring except that there are
four parties, viz.,
a) Exporter
b) Export Factor
c) Import Factor
d) Importer

It is also called two-factor system of factoring

 CROSS - BORDER FACTORING
 Exporter (Client) enters into factoring
arrangement with Export Factor in his
country and assigns to him export
receivables.
 Export Factor enters into arrangement
with Import Factor and has
arrangement for credit evaluation &
collection of payment for an agreed fee.
 Notation is made on the invoice that
importer has to make payment to the
Import Factor.
 Import Factor collects payment and
remits to Export Factor who passes on
the proceeds to the Exporter after
adjusting his advance, if any.
 Where foreign currency is involved,
Factor covers exchange risk also.
Advance Factoring
• Some portion of receivables paid to clients in
advance and rest will be paid after maturity.
• Client has to pay interest for the advance
payment made by the factor.
• Rate of payment is fixed based on the period
of receivables.
Bank Participation Factoring
• Here bank will pay some portion of factor
reserve in the form of factor finance.
• Bank will pay only certain portion of money
which cannot be borne by the factor.
• This will reduce the burden of factor and helps
clients to get quick and sufficient finance.
Full Factoring
• It will provide entire services provided by the
factor including financing, collection, credit
protection, administration.
• It is also called as old line factoring
 Notified and Undisclosed Factoring

• If assignment of factoring service is informed

to the customer then it is called as Notified
Factoring.
• On the other hand if assignment of factoring is
not informed to the customer then it is a kind
of Undisclosed Factoring, In this case however
customer needs to make payment to the
changed address of debtors.
 FORFEITING :
• “Forfeit” is derived from French word ‘A Forfeit’ which means
surrender of rights.

• Forfeiting is a mechanism by which the right for export

receivables of an exporter (Client) is purchased by a Financial
Intermediary (Forfeiter) without recourse to him.

• It is different from International Factoring in as much as it deals

with receivables relating to deferred payment exports, while
Factoring deals with short term receivables.
 FORFEITING
• Exporter under Forfeiting surrenders his right for claiming
payment for services rendered or goods supplied to
Importer in favor of Forfeiter.
• Bank (Forfeiter) assumes default risk possessed by the
Importer.
• Credit Sale gets converted as Cash Sale.
• Forfeiting is arrangement without recourse to the Exporter
(seller)
• Operated on fixed rate basis (discount)
• Finance available up to 100% of value (unlike in Factoring)
• Introduced in the country in 1992.
CHARACTERISTICS OF FORFEITING
• Converts Deferred Payment Exports into cash transactions,
providing liquidity and cash flow to Exporter
• Absolves Exporter from Cross-border political or conversion
risk associated with Export Receivables
• Finance available up to 100% (as against 75-80% under
conventional credit) without recourse
• Acts as additional source of funding and hence does not
have impact on Exporter’s borrowing limits. It does not
reflect as debt in Exporter’s Balance Sheet
• Provides Fixed Rate Finance and hence risk of interest rate
fluctuation does not arise
CHARACTERISTICS OF FORFEITING
• Exporter is freed from credit administration
• Provides long term credit unlike other forms of bank credit
• Saves on cost as ECGC Cover is eliminated
• Simple Documentation as finance is available against bills
• Forfeit financer is responsible for each of the Exporter’s
trade transactions. Hence, no need to commit all of his
business or significant part of business
• Forfeit transactions are confidential.
FORFEITING MECHANISM
ESSENTIAL REQUISITES OF FORFEITING
TRANSACTIONS

• Exporter to extend credit to Customers for periods above 6

months
• Exporter to raise Bill of Exchange covering deferred
receivables from 6 months to 5 years
• Repayment of debts will have to be guaranteed by another
Bank, unless the Exporter is a Government Agency or a
Multi National Company
• Co-acceptance acts as the yard stick for the Forfeiter to
credit quality and marketability of instruments accepted.
COSTS INVOLVED IN FORFEITING
• Commitment Fee:- Payable to Forfeiter by Exporter in
consideration of forfeiting services
• Commission:- Ranges from 0.5% to 1.5% per annum
• Discount Fee:- Discount rate based on LIBOR for the period
concerned
• Documentation Fee:- where elaborate legal formalities are
involved
• Service Charges:- payable to Exim Bank
 FACTORING vs. FORFEITING
` FACTORING FORFEITING
1. Coverage Domestic and foreign Only foreign

2. Scrutiny Service of Sales Transaction Individual Sale Transaction

3. Extent of Finance Up to 80% Up to 100%

4. Recourse With or Without Recourse Without Recourse

5. Sales Administration Done Not Done

6. Term / Maturity Short Term Medium or Long Term

7. Cost Borne by seller (Seller) Borne by overseas buyer

8. Goods deals with Trade receivable on ordinary Trade receivables on capital

goods goods
9.Negotiable instrument No dealing with negotiable Evidenced by bills of exchange,
instruments promissory note or letter of
credit
 SECURITIZATION
• Securitization is a process by which financial
assets such as loan receivables, mortgage
backed receivables, credit card balances, hire
purchase debtors, lease receivables, trade
debtors, etc., are transformed into securities.
• It is different from factoring as it involves
transfer of debt into marketable securities.
• It is basically conversion of existing or future
cash in- flows of any person into tradable
security, which then , may be sold in the
market.
• Sarfaesi Act 2002 -
Securitization is the process through which an issuer creates a financial
instrument by combining other financial assets and then marketing different tiers of
the repackaged instruments to investors, and this process can encompass any type
of financial asset and promotes liquidity in the marketplace.

In securitization, the company holding the loans, also known as the originator,
gathers the data on the assets it would like to remove from its associated balance
sheets. These assets are then grouped together by factors such as time remaining on
the loan, the level of risk, the amount of remaining principle, and others.
 Parties Involved in Securitization
Transaction
• Originator (Bank)
• Special Purpose Vehicle
• Investors
• Obligator (Customer)
• Agent or Trustee
• Rating Agency
• Ancillary Service Provider
 Obligator Service
(Customers) Provider

Special
Originator purpose Investor
Investor
(Banks) Vehicle (SPV)

Credit Rating

CRA

Merchant Banker
 Types of Securitisable Assets
• Mortgage Backed Securities :
 Total Mortgages are pooled together and
passes through securities holders.
 It will be usually of same loan type in case of
amortization level, payment, interest rate.
 Finance will be provided on the same
denomination or over the property as it is not
a depreciable property like any other asset.
• Asset Backed Securities :
 Bonds created from the consumer debt.
 May be of home loan, balance on a credit card
or auto loan.
 These assets may be sold to a trust which
issues securities based on the assets.
 It is availed by bank, auto finance company or
consumer finance company.
• Collateralized Debt Securities :
 Pooling of Non mortgage assets of banks or
financial institutions.
 Consists of loans or debt instruments of
companies.
 Investors bear the credit risk of the collateral.
 It offers securities based on different
maturities and of different types of credit risk.
Key Benefits of Securitization

Typically cheaper financing than traditional

funding

Diversification of funding

Non-recourse to the originator/seller of the

receivables

Early monetization of assets

Control of obligor exposure

 Terms Used in Securitization

Bond - A debt financial investment in which an investor lends money to an entity
such as corporate ,companies, government that borrows the funds for a specified
period at a specified interest rate.

Investment Bank (IB)- An Investment bank is a financial intermediary which

helps companies, agencies and government for raising money by issuing and
selling securities in the primary market.

Junk Bond - A high-yield or low investment graded bond. They are fixed-
income financial instruments that have rating of ‘BB’ or lower by Credit
rating agencies.
Mortgage Backed Security (MBS)- It is a type of asset-backed security that is
secured by a pool of mortgage. These securities are grouped in one of the top two
ratings as determined by credit rating agencies, like S & P, and usually pay periodic
payments that are similar to interest payments.

Collateralized Debt Obligation (CDO) - Collateralized Debt Obligation involves

the pooling of debt to hedge risk and raise returns. When a lot of debt for example
home mortgages is pooled together and split into different tranches or slices, and
also each slice is assigned a different payment priority and interest rate as per
their grading by credit rating agencies. This overall process is known as
securitization.

Yield- It is the income or return on an investment.

 Questions from P.Y. Question Papers
Year
Sl.No Questions Marks
1 What is mutual fund ? Explain the types of 7 2019/20,2012
mutual funds.
2 What is Depository ? 3 2019/20,2017/18,
2017, 2016

3 Explain the objectives of Depository system.    

4 What are the benefits of depositories ? Who 10 or 7 2017/18,

2016/17,
are the parties involved ? 2016,2011

5 Write a note on NSDL and CDSL. 10 or 7 2018/19,2017/18,

2017,2015/16
6 What is Factoring ? 3 2017/18,2016

7 Explain the types of Factoring,. 7 or 10 2019/20,2018/19,

2014/15,2013/14

8 Explain factoring mechanism. 10 2016

9 What is Forfeiting ? 3 2019/20,2017

Contd…..
10 Compare and contrast factoring and forfeiting. 7 or 2018/19,2017
10 /18,2017,201
6
11 What is Securitization ? 3 2017/18,2014
/15,2012
12 What is Securitization of Debt ? Explain its 10 2018/19
types.
13 Explain the benefits of Securitization. 7 or 2019/20,2017
10 /18,2016,
2013/14
14 Explain securitization mechanism or process. 10 2015/16,2012
, 2011
15 Name any two factoring agencies in India 3 2018/19
16 Explain the advantages of NSDL 10 2017
17 Who is a depository participant ? 3 2015/16
18 Write a note on Factoring and Forfeiting. 10 2015/16
19 Explain the functions of NSDL. 3 2019/20,2014
/15,2013/14