FINANCIAL SERVICE
IMPORTANT QUESTIONS
UNIT 4
Section A (3marks)
1.What is factoring?
Factoring is a specialized activity whereby a firm converts it’s
receivable into cash by selling them to a factoring organization. The
factor assumes the risk of collection and is the event of non-payment
by customers or debtors vears the risk of bad debt losses.
2.What are the services of factoring?
• Purchases call (accounts receivable debts).
• Administers the sales ledger.
• Collects the debts.
• Assumes the losses which may arise from bad debts.
• Provides relevant advisory services.
3.What is maturity factoring?
Under this type the factor does not make any advance or pre
payment. He pays the sellers either on the guaranteed date or on
the date of collection from the customer. This is opposed to
advance factoring.
4.Define consume finance.
, The loans which a bank or any other financial institutions
provides to an individual i..e a customer for the purchase of
consumer durables are termed as consumer finance.
5.What do you mean by venture capital?
Venture capital is a form of equality financing specially
designed for funding high risk and high reward projects. It plays an
important role in financing high technology projects.
6.What are the forms of venture capital?
• Various stages of business development.
• Development of idea.
• Implementation of idea.
• Commercial production.
• Established stage.
7.Write about seed capital.
Seed capital-also called seed money or seed financing-is
referred to as such because it is money raised by a business in its
infancy or early stages. … The primary goal at this point is to attract
more financing. This means catching the interest of venture capitalists
and/or banks.
8.Define mutual funds.
• 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.
9.Write down the rating symbols normally assigned by CRISIL.
CRISIL'S RATING SYMBOLS:
• AAA - highest safety.
• AA - high safety.
• A - safety.
• BBB - moderate safety.
• BB - inadequate safety.
• B - high risk.
• C - substantial risk.
• D - default.
10.Give short notes on debit cards.
In case of debit cards at the time of its use the transaction caused
us transferred direct to the users Bank and amount deducted from the
amount of card holder. They reduce the volume of paper particularly
check. While using debits cards funds are transferred through
electronic funds transfer at point of sale which is the most well known
method of electronic payment system.
11.What is AMC?
Asset Management Company ( AMC) are firms pooling funds
from various individual and institutional investors and investing in
various securities. The company invests the funds in capital assets
such as stock, real estate, bonds, and so on.
IMPORTANT QUESTIONS
UNIT 4
Section A (3marks)
1.What is factoring?
Factoring is a specialized activity whereby a firm converts it’s
receivable into cash by selling them to a factoring organization. The
factor assumes the risk of collection and is the event of non-payment
by customers or debtors vears the risk of bad debt losses.
2.What are the services of factoring?
• Purchases call (accounts receivable debts).
• Administers the sales ledger.
• Collects the debts.
• Assumes the losses which may arise from bad debts.
• Provides relevant advisory services.
3.What is maturity factoring?
Under this type the factor does not make any advance or pre
payment. He pays the sellers either on the guaranteed date or on
the date of collection from the customer. This is opposed to
advance factoring.
4.Define consume finance.
, The loans which a bank or any other financial institutions
provides to an individual i..e a customer for the purchase of
consumer durables are termed as consumer finance.
5.What do you mean by venture capital?
Venture capital is a form of equality financing specially
designed for funding high risk and high reward projects. It plays an
important role in financing high technology projects.
6.What are the forms of venture capital?
• Various stages of business development.
• Development of idea.
• Implementation of idea.
• Commercial production.
• Established stage.
7.Write about seed capital.
Seed capital-also called seed money or seed financing-is
referred to as such because it is money raised by a business in its
infancy or early stages. … The primary goal at this point is to attract
more financing. This means catching the interest of venture capitalists
and/or banks.
8.Define mutual funds.
• 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.
9.Write down the rating symbols normally assigned by CRISIL.
CRISIL'S RATING SYMBOLS:
• AAA - highest safety.
• AA - high safety.
• A - safety.
• BBB - moderate safety.
• BB - inadequate safety.
• B - high risk.
• C - substantial risk.
• D - default.
10.Give short notes on debit cards.
In case of debit cards at the time of its use the transaction caused
us transferred direct to the users Bank and amount deducted from the
amount of card holder. They reduce the volume of paper particularly
check. While using debits cards funds are transferred through
electronic funds transfer at point of sale which is the most well known
method of electronic payment system.
11.What is AMC?
Asset Management Company ( AMC) are firms pooling funds
from various individual and institutional investors and investing in
various securities. The company invests the funds in capital assets
such as stock, real estate, bonds, and so on.
