1.What do you mean by the term ' Insider trading'. How does the same affect an organization ?

Give examples.
Ans: Insider trading is the buying or selling of a publicly traded company's stock by someone who
has non-public, material information about that stock. Insider trading can be illegal or legal
depending on when the insider makes the trade.
Insider trading is the trading of a public company's stock or other securities such as bonds or stock
options based on material nonpublic information about the company. A person who becomes
aware of non-public information and trades on that basis may be guilty of a crime.

A common misconception is that all insider trading is illegal, but there are actually two methods
by which insider trading can occur, that is:
 Legal and
 Illegal.

Legal Insider Trading

Insiders are legally permitted to buy and sell shares of the firm and any subsidiaries that
employ them. However, these transactions must be properly registered with the Securities and
Exchange Commission (SEC) and are done with advance filings. You can find details of this type
of insider trading on the SEC's EDGAR database.

Legal insider trading happens often, such as when a CEO buys back shares of their company, or
when other employees purchase stock in the company in which they work. Oftentimes, a CEO
purchasing shares can influence the price movement of the stock they own. A good example is
whenever Warren Buffett purchases or sells shares in the companies under the Berkshire Hathaway
umbrella.

Illegal Insider Trading

The more infamous form of insider trading is the illegal use of non-public material information for
profit. It's important to remember this can be done by anyone including company executives, their
friends, and relatives, or just a regular person on the street, as long as the information is not publicly
known.

For example, suppose the CEO of a publicly-traded firm inadvertently discloses their company's
quarterly earnings while getting a haircut. If the hairdresser takes this information and trades on it,
that is considered illegal insider trading, and the SEC may take action.

The SEC is able to monitor illegal insider trading by looking at the trading volumes of any
particular stock. Volumes commonly increase after material news is issued to the public, but when
no such information is provided and volumes rise dramatically, this can act as a warning flag. The
SEC then investigates to determine precisely who is responsible for the unusual trading and
whether or not it was illegal.

Examples:
Martha Stewart was infamously convicted of insider trading in 2003. ImClone Systems, a
biopharmaceutical company that Stewart owned stock in, was on the verge of having the Food and
Drug Administration (FDA) reject its experimental cancer treatment, Erbitux. Stewart's broker
informed her that ImClone Systems' CEO, Samuel Waksal, sold all of his shares in the company
on the bad news. On the tip, Stewart sold her shares in ImClone Systems and avoided a loss, as the
stock dropped 16% once the news became public. She was eventually found guilty of insider
trading and served five months in prison, in addition to house arrest and probation.

The investors on the other side of Martha Stewart's trade might not have bought her stock if they
had known ImClone Systems' CEO was selling his position and why he was selling his position.
The courts found that Stewart benefited at the expense of other investors.

Another example of insider trading involves Michael Milken, known as the Junk Bond King
throughout the 1980s. Milken was famous for trading junk bonds and helped develop the market
for below-investment-grade debt during his tenure at the now-defunct investment bank Drexel
Burnham Lambert. Milken was accused of using nonpublic information related to junk bond deals
that were being orchestrated by investors and companies to take over other companies. He was
accused of using such information to purchase stock in the takeover targets and benefiting from
the rise in their stock prices on the takeover announcements.
If the investors selling their stock to Milken had known that bond deals were being arranged to
finance the purchase of the companies that they partially owned, they likely would have held onto
their shares to benefit from the appreciation. Instead, the information was nonpublic and only
people in Milken's position could benefit. Milken eventually pled guilty to securities fraud, paid a
$600 million fine, was banned from the securities industry for life, and served two years in prison.

2. Money spent on marketing and advertising is often considered as waste of funds. How true is
that ? Please illustrate with examples.
Ans: Money spent on marketing and advertising is often considered as waste of funds because
when marketing a new company, or even a new product, one of the first things that comes to mind
is whether it’s worth it to advertise. And more importantly, how do you choose to advertise? The
answer to that question depends on how, when, where, to whom and what you’re advertising.

Examples:
A great example of this can be seen between Samsung and Apple. In 2013, Apple outsold Samsung
by 100 per cent, even though Samsung spent much more on advertising.
Apple saw little need to spend a lot of money on advertising, because they knew they had a product
their customers would want to buy. Their consumers value the company’s unique approach to
software and hardware as a unified experience.
you can save money on advertising, you must create a strong brand image, which is a byproduct
of a strong philosophy.
There is one time when advertising is absolutely a waste of money, and that’s when the
advertisement completely fails. And sadly, there are a few that really stand out.

Sometimes no advertising is needed as there are companies out there paying for advertising and
failing, there are also those out there not paying a single dime on advertising – yet are wildly
successful

Advertising, like all marketing initiatives can be extremely effective, but can also potentially be a
waste of money. In order to determine if advertising is right for you, you need to ask yourself if
you have a brand strong enough to compensate for the lack of public messaging. If not, advertising
might still need to be done – but must be done in the best way to bolster your brand.

Globally, advertising has become a waste on money. In the past, the evolution of advertising has
mitigated the advancement of technology.

Advertising spend in India is likely to rise by 11.4 per cent to Rs 697 billion in 2019, driven by
key events such as the ongoing cricket world cup and the recent general elections, according to a
report.

For a new product or one that’s not yet distinctive in the minds of consumers, advertising can have
substantial value.

For mature brands, advertising often amounts to an expensive arms race. A brand may have high
awareness but if it’s not reinforced by a positive experience with the product and the company,
then resources will be better spent improving that experience.
Another example of poor advertising happened with Esurance. The company released a new
billboard that stated, “Cover your home in a click.” While on the surface this is a totally innocuous
statement, when the statement was read from a distance, it looked mildly obscene because some
of the letters started to blur together. Of course, this led people to Photoshop the billboard to more
clearly say the obscene word – we’re all adults here, I think we can all assume what the obscenity
was – and posted it to Twitter where it exploded in popularity.

3. What do you understand by the term break even point in business? Do a case study on indigo
airlines and tell us about it's inception , break even and the success story. What factors have been
instrumental in making indigo one of the finest air line operators in India.
Ans: The break-even point (BEP) is the point at which total cost and total revenue are equal. There
is no net loss or gain, and one has broken even, though opportunity costs have been paid and capital
has received the risk-adjusted, expected return.

Case Study on Indigo airlines:

IndiGo was founded in 2006 as a private company by Rahul Bhatia of InterGlobe Enterprises and
Rakesh Gangwal, a United States-based NRI. InterGlobe had a 51.12% stake in IndiGo and
47.88% was held by Gangwal's Virginia-based company Caelum Investments.
In January 2011, after completing five years of operations, the airline got permission to launch
international flights.
In January 2013, IndiGo was the second-fastest-growing low-cost carrier in Asia behind
Indonesian airline Lion Air.
Selling and leasing back planes helps its balance sheet.
IndiGo uses six-year sale and leaseback agreements, so the airline is constantly replacing its
aircraft. This prevents the need for overall checks and major repairs, which
meansIndiGo understands how to work the margins.
new Airbus A320, IndiGo quietly passed an invisible benchmark—it became India’s second
biggest low-cost carrier by fleet size.

IndiGo is operated by Interglobe Enterprises Ltd and not much is known about the airline’s
finances other than the fact that Rakesh Gangwal, a former CEO of US Airways Group, and
Interglobe, the biggest player in India’s travel industry, are the primary investors, with both
holding equal voting power on the board.
In 2013, IndiGo not only became the most profitable airline in India, but also became the
largest airline in India in terms of market share as well. Soon, they also surpassed several
competitors to become the second largest and fastest growing low-cost carrier in Asia just behind
Indonesian airline Lion Air.

Today, IndiGo has a fleet strength of over 200 aircraft, operates over 1300 daily flights, employs
25,000 people, and has 126 offices located in 60 cities around the globe.

When the government reopened its aviation doors to private participation post 1992 (with many
riders of course), there was a deluge of entrepreneurs who jumped in to launch air services. But
most of them either wanted to make quick bucks (wrongly believing that aviation was a gold mine)
or were receiving finances from shady sources.

One didn’t see ethical or intelligent or committed entrepreneurs taking the plunge. No wonder,
most of them had a very short run, their ventures nose-diving quickly. But unlike many airlines
that came up, one has not heard serious stories of any unethical or wrong doings by IndiGo.

4. What do you mean by cyber security ? Why is it so pivotal in today's era . What all steps can
make sure that our data / information is safe online ? How can the safety or security be negotiated?
Give examples.
Ans: Cyber security refers to the body of technologies, processes, and practices designed to protect
networks, devices, programs, and data from attack, damage, or unauthorized access. Cyber security
may also be referred to as information technology security.
Cyber security or information technology security are the techniques of protecting computers,
networks, programs and data from unauthorized access or attacks that are aimed for
exploitation. security includes activities to protect the usability, reliability, integrity and safety of
the network.
Cybersecurity is pivotal in today’s era, because it encompasses everything that pertains to
protecting our sensitive data, personally identifiable information (PII), protected health
information (PHI), personal information, intellectual property, data, and governmental and
industry information systems from theft and damage attempted by criminals and adversaries.

Cybersecurity risk is increasing, driven by global connectivity and usage of cloud services, like
Amazon Web Services, to store sensitive data and personal information. Widespread poor
configuration of cloud services paired with increasingly sophisticated cyber criminals means the
risk that your organization suffers from a successful cyber attack or data breach is on the rise.
Gone are the days of simple firewalls and antivirus software being your sole security measures.
Business leaders can no longer leave information security to cybersecurity professionals.

Cyber threats can come from any level of your organization. You must educate your staff about
simple social engineering scams like phishing and more sophisticated cybersecurity attacks
like ransomware (think WannaCry) or other malware designed to steal intellectual property or
personal data.

GDPR and other laws mean that cybersecurity is no longer something businesses of any size can
ignore. Security incidents regularly affect businesses of all sizes and often make the front page
causing irreversible reputational damage to the companies involved.

The steps to make sure that information is safe will be:

 Educate all levels of your organization about the risks of social engineering and common
social engineering scams like phishing emails and typo squatting.
 Invest in tools that limit information loss, monitor your third-party risk and fourth-party
vendor risk and continuously scan for data exposure and leak credentials.
 Use technology to reduce costs like automatically sending out vendor assessment
questionnaires as part of an overall cyber security risk assessment strategy.
 Encryption of data.
 Data back up.
 Anti malware protection is must.
 Making old computers hard drive unreadable.
 Installation of operating system updates.
 Practicing the principle of least privilege.
 Use "passphrases" rather than "passwords."

The safety and security can be negotiated by the following:

Contact process: The contracts deal with issues of high risk, are often for long terms and their
content is both complex and specialist.
Managing the process is no simple task as the parties need to co-ordinate large teams and resolve
difficulties whilst also attempting to achieve milestones in a timely manner. Additionally,
negotiation can often be lengthy, testing the goodwill of both sides. The process of negotiating and
finalizing the contract itself deserves special attention along with key terms which often prove
difficult to negotiate, so this series will deal with both the process and those key terms. Although
there are no ‘shortcuts’ there are certain ways the process can be managed to ensure it is both
smooth and time efficient.
Examples:

eBay: Between February and March 2014, eBay was the victim of a breach of encrypted
passwords, which resulted in asking all of its 145 million users to reset their password. Attackers
used a small set of employee credentials to access this trove of user data. The stolen information
included encrypted passwords and other personal information, including names, e-mail addresses,
physical addresses, phone numbers and dates of birth. The breach was disclosed in May 2014, after
a month-long investigation by eBay.

Yahoo: Yahoo disclosed that a breach in August 2013 by a group of hackers had compromised 1
billion accounts. In this instance, security questions and answers were also compromised,
increasing the risk of identity theft. The breach was first reported by Yahoo on December 14, 2016,
and forced all affected users to change passwords, and to reenter any unencrypted security
questions and answers to make them encrypted in the future. However, by October of 2017, Yahoo
changed the estimate to 3 billion user accounts. An investigation revealed that users' passwords in
clear text, payment card data and bank information were not stolen. Nonetheless, this remains one
of the largest data breaches of this type in history.