group f -fm- important points helpful to prepare for exam
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8/3/2019 Group F -FM- Important Points Helpful to Prepare for Exam
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Hi Everyone,
If you pursuing Group E then it would be useful to you or forward these points to other students you are pursuingGroup E you may know off.
Important Points of FM.
Now, i am intending to give most important points for Financial Management. I know that usually students
find lot of problem to clear group E but i would suggest you to after reading text book then please give
time to solve work book. I cleared FM as i gave good time for numerical part even i studied theory, if any
one will study theory properly then he\she may not find difficulty to clear these exam. Main thing is that
please give good time to old papers.
Chapter 1 (Introduction to financial mangement)
Page no. 2 Objective of Financial management, Page no. 3 Functions of the finance manager ( Please learn
all heading )
Page no. 7, sole proprietorship , partnership & companies.
page no. 8 minimum number of a person to form a company,maximum number of persons to form company,
minimum number of directors,maximum number of directors.
Page no. 9 Audit committee,Statutory Meeting, Quorum For a general meeting etc.
page no. 11 All bullet points.
Page no. 11-12 Industrial Licensing provisions and procedures., all points of page nil 12
page no. 13, Foreign exchange Management ACT ( you need to study only 5 lines)
page no. 14 monopolies and restrictive trade practices ACT
page no. 15 companies ACT,1956 ( You need to read & learn all 5 bullet points)
Chapter 2 ( Indian Financial System )
Page no.19: the saving function,liquidity function,payment function.
page no. 20 : Risk function, policy function, You need to learn all examples of Money market, call money
market & purpose ( Note : you need to learn all 3 bullet points which you can find in page no. 21)
Page no. 22 : CP
Page no. 24 : CD
page no. 25 MMMFs
page no. 27 : Functions and powers of SEBI ( you need to learn all bullet points )
page no. 28 : Types of ISSUE ( you need to learn all )
Page no. 31 : The order ( you need to learn all ) & last paragraph of page no. 31
Page no. 32 , you need to know about types of T-bills ( Only days related , only examples such as
14,28,91,182&364 days )
Note : their is big mistake in page no. of 39 . 362 days is wrong. 364 days should be instead of 362days
)
Page no. 41 : you need to learn formula T-Bill.
page no. 43 : All 3 sub heading of Intermediaries
page no. 44 : American Depository Receiptspage no. 45 Foreign Bonds
8/3/2019 Group F -FM- Important Points Helpful to Prepare for Exam
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page no. 46 : Euronotes
Page no. 50-51 : Participants
page no. 66 : Nidhis,venture capital funds etc.
Chapter 3 ( Time value of Money )
you need to learn all single line.
Chapter 4 ( Risk and return )
Page no. 90 : Probabilities and rates of return
page no. 93 : Sources of Risk.
page no. 94: all 4 bullet points.
page no.95-96: Non diversification or market risk factors and Diversification or specific risk factors.
page no. 98-99: CAPM, Assumptions , risk premium.
page no. 100 : SML
Chapter 5 : leverage
One of the easy chapter for me.
page no. 106 : all 4 bullets points
page no. 109 : all 4 bullets points.
page no. 113 : all 4 bullets points.
I created notes from old papers so it would better study this chapter line by line.
Chapter 6 : Valuation of Securities
Page no. 116 : concepts of value & valuation of bonds including all headings.
page no. 125 : Warrant price & Convertible debentures
page no. 133 : Comparing Expected and Actual P\E Ratios
Chapter 7 : Sources of Long - term Fianance
page no. 138 : Preference capitalpage no. 139 : Debenture capital & types of debentures
page no. 140 : SPNs
page no. 141 : Issues of securities
page no. 142-143, you need to learn formula of Ex- rights of a share and value of a right . Bought out
deals, private placement
page no. 144 : Deferred Credit
Chapter 8: cost of capital and capital structure T
page no. 151 : Realized yield approach
page no. 152-153 : CAPM, Bond yield plus risk premium approach , earning price ratio approach , cost of
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retained earning and cost of external equity
page no. 158 : A-E points
page no. 159 : Features of an optimal capital structures, assumptions
page no. 160-161 : Net income approach ( including graph ) , Net operating Approach ( including graph )
page no. 162-163 : Traditional Approach , Miller and modigliani approach
page no. 168 : Bankruptcy costs and agency costs.
Chapter 9 : Dividend Policy
page no. 171-172-175-178-182 : Traditional Position, walter model , Gordon's Dividend capitalization Model,
millar and modigliani model & Rational expectations Models.
About 2nd part (Paper II) of Financial Management.
Dear Friends, Now i am going to let you that i prepared 2 part by using text book & work book but i
created small notes from Old question papers.
Chapter 10: Working Capital management
Page no. 186 Description of current assets and current liabilities
page no. 206 under-trading and over trading
page no. 207 Ratio Analysis
Chapter 11 : Financing Current Assets
page no. 213 cost of trade credit.
page no. 216 Letter of credit , Hypothecation,Pledge
page no. 218 Factoring ( read everything including types of factoring
page no. 221 Tandon Committee
Chapter 12 : Inventory Management
Page no. 231 Liquidity Lags ( Learn every single point )
page no. 233 types of inventory
page no. 232 Shelf stock,purpose of inventoriespage no. 235 3 subsystem ( you will find these 3 subsystem above paragraph of EOQ & page no. 237
Economic order quantity including assumptions.
page no. 246 the production side
page no. 247 THE ABC system
page no. 250 Monitoring of stores and Spares and pricing of Inventories
Chapter 13 : Receivables Management
page no. 255 : Only title of cost of maintaining receivables
page no. 263 collection program ( learn all bullet points )
page no. 272 : Ageing Schedule
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chapter 14 : Cash Management
page no. 293 : Treasury and controller
page no. 294 : accounting and control
page no. 295 : Design of internal control
page no. 297 : The Daiwa Episode ( Good for knowledge point of view ) , Internal Auditpage no. 299 : Elements of Internal Audit
page no. 300 : Objectives of Audit Committee
Chapter 15 : Capital Expenditure Decisions
Page no. 318 : Aspects Of project appraisal ( Read everything page no. 318-319)
page no. 324 : Payback Period
page no. 325 : Accounting rate of Return
page no. 326: Net present Value
page no. 330 : annual capital charge
Chapter 16 : Inernational Project Appraisal
Page no. 335: Reasons for FDI
Chapter : 17 International Trade and Finance
Page no. 349 : Heckscher-ohlin Model,Imitation-gap theory
page no. 350 : International product Life Cycle Theory,trade barriers
page no. 352 :BOP
page no. 355 : Capital Account
page no. 357 : Imports of goods and services
page no. 362 : Currency board system
page no. 363: Hybrid Mechanism : Crawling Peg
page no. 370 : Types of Transactions
page no. 373 : PPP and the law of one price
page no. 383 : Various Internal Hedging Techniques
page no. 385 : Marketing Strategies ( Learn every single bullets properly )
Chapter 18 : Financial Risk Management
page no. 390 : Sources of Risk ( learn every thing which will come under this title )
page no. 399 : Motives Behind Using futures
page no. 402 : Types of Futures
page no. 408 : Black and Scholes Model
page no. 410 : Assumptions of Black and Scholes Model
page no. 415 : Parties In a Swap transaction
page no. 416 : Types of Interest rate Swaps ( Please learn everything )page no. 419 : Commodity Swaps
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I gave most important points of Financial Management so i hope, you may able to cover good scores from
Theory part. But please don’t forget that without reading through the Text book in total first you be able to
understand and follow the Important points highlighted.
APART FROM THIS YOU SHOULD PRACTICE THE WORKBOOK AND SOLVE THE PROBLEMS AS YOU
COMPLETE EACH CHAPTER AND REVISE THEM REGULARLY. ONLY PRACTICE CAN MAKE YOU GUYS
PERFECT AND YOU SHOULD BE CONFIDENTLY CLEAR THIS SUBJECT.
ONE MORE IMPORTANT ISSUE REFER TO ATLEAST JULU 08, OCT 08 & JAN 2009 PAST QUESTION
PAPERS AND REVISE THEM AS AND WHEN YOU READING THE TEXT BOOK. PLEASE GO THROUGH
PAST QUESTION PAPER I AFTER YOU ARE 60 OR 70% THROUGH OF THE FIRST HALF OF THE
BOOK. THE INDEX OF THE TEXT BOOK SHALL TELL YOU THE CHAPTERS FOR PAPER I AND PAPERII.
Best wishes and good luck,