LUBIN SCHOOL OF BUSINESS
Pace University
FIN 680D/INC 670C/FIN 360A
India as a Market-oriented Economy: Present and Future

 Fall 2006

Undergraduate Final Exam

Answer any four of the following questions.  Use no more than one page for each one.

  1. Dreze and Sen make the startling point that literacy rates in India are no better than sub-Saharan Africa (p. 32).  In what ways does India differ from sub-Saharan Africa in terms of literacy? 
  2. To what extent does the corporate sector in India use the securities markets to raise funds?
  3. Why should a country have a freely convertible currency?  Are there any reasons why there might be a difference between keeping the currency freely convertible for consumer transactions, but restricted for capital movements? 
  4. According to Aubrey Giffen’s report to our class, K Sera Sera Productions Ltd., Mukta Arts, Adlab Films Ltd. and Pritish Nandy Communications Ltd. are a few of the firms in the film industry that are now listed on the Bombay Stock Exchange.  Why are there not more films financed on the stock market?
  5. Discuss the heterogeneity across the Indian states from the point of view of education.  (You can choose a subject, other than education, if you desire.)
  6. The major driver for growth post-1991, in India, has been in services, as opposed to manufacturing.  What are the reasons for this?
  7. The Reserve Bank of India just moved to tighten money supply by increasing the cash reserve ratio (CRR). CRR is the money various banks have to keep with the RBI in the form of cash and deposits.   Soon after, the Bombay Stock Exchange’s Sensex Index dropped about 400 points.  Explain the connection. 
  8. What sectors in the financial services industry have grown in recent years?  Why?