BANK AND FINANCIAL INSTITUTIONS

18 June 2021

1. MUTUAL FUND CASE

Suppose we have data of Reksadana Indonesia – Indonesia Mutual Fund
Moth NAV – NAV – NAV – CSPI
Johson- Jack- Enstein.-
mutual mutual mutual fund
fund (%) (%)
fund (%)
12 (Dec)-2019 107,5 104.75 108.25 4550
1 (Jan – 2020) 109,0 107.50 105.50 4825
2 (Feb – 2020) 111,50 106.00 112.25 4900
3 (March – 109.25 110.50 117.50 4975
2020)
4 112.50 113.25 116.50 5050
5 114.50 109.50 118.50 5175
6 113.00 112.00 116.25 5150
7 115.50 115.5 114.75 5300
8 114.50 110.5 112.50 5500
9 117.25 109.5 110.00 5400
10 115.00 113.25 113.50 5350
11 118.25 115.75 116.00 5450
12 119,50 117.5 118.50 5600
Beta (β) 1.15 1.35 1.45

t-1 = previous time

Risk free rate – BI-Rate =6,5%
Rmt = (IHSGt – IHSGt-1)/ IHSGt-1
CSPI = composite stock price index = IHSG

a) Analyze the performance of Mutual Fund using Formula No.1-7,

page:531- 532 article in this website:
https://media.neliti.com/media/publications/197343-EN-performance-
evaluation-of-equity-mutual.pdf

b) Which mutual firm is the best?

Answer: using formula No.2 and No.3

If, Risk free Interest rate = 65%
a) Formula No.2 : Sharpe Ratio = (Mean of Mutual fund Return - Rusk
free interest rate)/Standar deviation of Mutual funds
* Jhoson,
Sharpe Ratio = (113.63 - 65%)/3,65 = 10,89
 *Jack
Sharpe Ratio = (111.19 - 65%)/3,84 = 10,13

*Estein
Sharpe Ratio = (113,84 - 65%)/4,03 = 9,88

Formula No.3 : Treyner Ratio = (Mean of mutual fund return - Risk

Interest rate)/ Beta mutual funds
*Jhoson
Treyner Ratio = (113,63 - 65%)/1,15 = 34,58%
*Jack
Treyner Ratio = (111,19 - 65%)/1,35 = 28,82%
*Estein
Treyner Ratio = (39,844)/1,45 = 27,47%

b) According to my analysis, the best Mutual Fund firms are those that are
able to maintain the highest consistent value, and this was achieved by
the Jhoson Mutual Fund firm with a value after being tested with
formula 2 of 10.89 and tested with formula 3, the Jhoson Mutual Fund
firm still outperformed with a value by 34.58%.

2. Use some article or journal (2-3 articles or journals), please describe how to
make decision making and evaluation a Venture Capital Investment.

Answer:
Making decisions and evaluating Venture Capital Investments, the first thing we really
need to know is to look at the existing management, someone who is used to investing
will understand what good and right management is, because without good and right
management, all things that what will be implemented will not be in accordance with
expectations, if it is also applied to venture capital investments, the main thing when
investors judge is management in making decisions, whether it is good or right. Then
the second thing is market size, showing that the business will target a large and
addressable market opportunity is important to attract the attention of VC investors.
For VCs, “big” usually means a market that can generate $1 billion or more in
revenue. In order to receive the huge returns they expect from their investments, VCs
generally want to ensure that their portfolio companies have the opportunity to
increase sales by hundreds of millions of dollars. The larger the market size, the more
likely it is to sell a trade, making the business even more attractive to VCs looking for
potential ways to exit their investment. Ideally, the business will grow fast enough for
them to occupy the first or second position in the market. Venture capitalists expect a
business plan to include a detailed market size analysis. Market size should be
presented from the “top down” and from the “bottom up.” That means providing third-
party estimates found in market research reports, but also feedback from potential
customers, indicating their willingness to buy and pay for a business's products. (To
learn about the motives that propel companies into the arms of the acquirer, read Why
Successful Business Owners Sell.) and third is Great Products with Competitive
Advantage Investors want to invest in great products and services with a long-lasting
competitive advantage. They are looking for solutions to real and burning problems
that have never been solved before by any other company in the market. They look for
products and services that customers can't do – because they're so much better or
because they're way cheaper than anything else on the market. VC seek a competitive
advantage in the marketplace. They want their portfolio companies to be able to
generate sales and profits before competitors enter the market and reduce profitability.
The fewer direct competitors operating in the space, the better. And don't forget, the
most important thing is Risk Assesmen. A VC's job is to take risks. So, of course, they
wanted to know what they were getting into when they took a stake in an early-stage
company. When they talk to a business founder or read a business plan, VCs want to
be clear about what the business has accomplished and what still needs to be done.
Could regulatory or legal issues arise? Is this the right product for today or 10 years
from now? Is there enough money in the fund to fully meet the opportunity? Is there
ultimately a way out of the investment and an opportunity to see a profit? How VCs
measure, evaluate and try to minimize risk can vary depending on the type of fund and
the individual making the investment decision. But at the end of the day, VCs are
trying to reduce risk while making huge returns on their investment. (To learn about
some ways to prepare for and manage risk, see Identifying and Managing Business
Risk. The rewards of spectacularly successful high-return investments can be
undermined by losing investments. So, before putting money into opportunities,
venture capitalists spend a lot of time to examine them and look for the key
ingredients for success. They want to know if management is up to the task, the size of
the market opportunity and whether the product has what it takes to make money. In
addition, they want to reduce the risk of the opportunity.
 a) Do you still have interest to joint this firm? Why
Answer:
I'm still interested, because I saw the small initial stage funds, but after 1 year
there was a change, even though 10 years later it went down, but seeing the
way the risk profile offered was convincing enough I was very interested.

b) Based on your article VC evaluation, describe your decision.

Answer :
Regarding my decision in determining the choice for venture capital
investment, then I will follow the criteria that I described earlier, because I am
very confident in assessing the aspect of good management, how to reach the
market, the risk profile offered is also supportive, and public trust is also very
important. , so by decision I am very interested and agree.

3. Evaluate progress of Ping An Fintech Firm, you may use 14th handout (Fintech) -
PingAn – Fintech Annual Report
https://group.pingan.com/resource/pingan/IR-Docs/2020/pingan-ar20-report.pdf

a) Evaluate the performance of Fintech Firm

Answer:
after I explored further how the performance of Ping An Firm, from the
aspect of good and correct management, on the investment side it was quite
good, the expenditure was controlled as well, and this was based on a good
management system, accompanied by good control of expenses and income.
and how they offer loans to customers. it's just that the level of net profit in
2020 is inconsistent or has decreased by 6308, this is the difference in net
profit attribute to shareholders in 2019 and 2020. while in other aspects it
experiences constant changes, although there are some that are changing
slowly.

b) Which one of four elements has best growth

Answer:
In my opinion, the element with the best growth comes from a good
management system, as can be seen in the assets that are constantly
changing every year. and other elements as well, In terms of financial value,
this Mutual Fund firm has been able to show a significant increase, plus a
relatively small risk profile, and the interest of various customers to make
transactions from year to year.

c) If you are an investor, do you have intention to buy their stock

Answer:
Well of course I will really intend, considering the growth in all aspects of
the determinants has been very good, and I think this is worth
recommending
 4. This is financial data of a XYZ Bank. Evaluate this data, what is going on ? In
other words do you trust this bank is OK ?

Answer:
● Total comprehensive income for the year is $20.550 seen in 2020 on total
comprehensive.
● If we analyze and look at the level of comparison of each existing account, we
will get the difference in increase and comparison from 2019 and 2020, for
example from the 2019 and 2020 revenue accounts, Interest revenue has a
difference of 5000 from 2019, and this shows that in In 2020 Interest revenue has
increased by 5000, plus Interest expense has a comparison of 2784 and Net
Interest Revenue itself, it has a difference of 802, or in 2020, Net Interest
Revenue has increased by 802. and for total non Interest revenue itself has an
increase of 600 in 2020 and its total Operating Expense has an increase of 550,
and for the current year's total comprehensive, it has increased by 4200. This
shows us that this company is in good condition.