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0801 FM (CFA550)_NoRestriction

0801 FM (CFA550)_NoRestriction

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Published by anuj1212
Financial Markets
Financial Markets

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Published by: anuj1212 on Nov 21, 2010
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11/21/2010

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1
Question Paper
Financial Markets (CFA550): January 2008
 
 
Answer all 76 questions.
 
Marks are indicated against each question.
 
Total Marks : 1001.
The required amount of successful bids by a primary dealer who participated in the bidding forT-Bills is Rs.600 crore. The commitment to aggregative bidding would be(a) Rs.1,200 crore(b) Rs.1,500 crore(c) Rs.1,600 crore(d) Rs.1,800 crore(e) Rs.2,000 crore.
(1mark)
<Answer>
2.
Which of the following statements is/are
true
with respect to Public Deposits?I. A company for meeting its short-term requirements of funds, may accept or renew deposits for less than 3months.II. Any unsecured loan brought in by promoters in pursuance to any stipulation by financial institutions isconsidered as public deposit.III. Any deposit repayable on demand or on notice can be accepted by a company.IV. The maximum maturity period for the deposits cannot exceed 60 months.(a) Only (I) above(b) Only (III) above(c) Both (I) and (IV) above(d) Both (II) and (III) above(e) (I), (III) and (IV) above.
(1mark)
<Answer>
3.
An investor invested in the deposit of a company at an interest rate of 10% p.a. for a period of 3 years. On theexpiry of 2
nd
year, he demands premature withdrawal of his deposit. The interest rate for 2-year maturity depositis 8.5% p.a. The interest rate payable to him on the said deposit would be(a) 6.50% p.a.(b) 7.50% p.a.(c) 8.00% p.a(d) 9.00% p.a.(e) 10.00% p.a.
(1mark)
<Answer>
4.
Which of the following statements is/are
not true
with respect to Government dated securities?I. These securities are issued at discount.II. These securities provide higher liquidity.III. These instruments facilitate implementation of the fiscal policy of the government.(a) Only (I) above(b) Only (III) above(c) Both (I) and (II) above(d) Both (II) and (III) above(e) All (I), (II) and (III) above.
(1mark)
<Answer>
5.
Which of the following statements is/are
true
with respect to call rates?I. In the money market call rates are quoted on the annualized basis.II. The rate of interest on call money is calculated on daily basis.III. Low call rates indicate tightness of liquidity in the financial system.IV. Call rate is influenced by forces of supply of and demand for funds.(a) Only (II) above(b) Only (IV) above(c) Both (I) and (II) above(d) (I), (II) and (IV) above(e) All (I), (II), (III) and (IV) above.
(1mark)
<Answer>
 
 2
6.
A 364-Day T-bill with face value of Rs.100 is trading in the market at annual yield of 7.34%. The purchase priceof T-bill is(a) Rs.92.23(b) Rs.92.64(c) Rs.92.85(d) Rs.93.18(e) Rs.93.56.
(1mark)
<Answer>
7.
Carbon Ltd. issued 1000 commercial papers maturing after10 months having the face value of Rs.1,00,000 atRs.98,500 each. The stamp duty payable by the company on such issue is(a) Rs. 50,000(b) Rs.1,00,000(c) Rs.1,50,000(d) Rs.2,00,000(e) Rs.5,00,000.
(1mark)
<Answer>
8.
Catholic Ltd. has accepted the public deposits of Rs.1,56,65,000 payable at the end of 27 months. It has theaggregate paid up capital and free reserves of Rs.10,00,00,000. The maximum amount of brokerage payable forsoliciting the above deposits is(a) Rs.1,56,650(b) Rs.2,34,975(c) Rs.3,13,300(d) Rs.3,91,625(e) Rs.2,56,650.
(1mark)
<Answer>
9.
Which of the following is
not
the characteristic of a perfect market?(a) All the players in the market have all the information relating to the security(b) The flow of funds between the markets should be restricted by the Government regulations(c) The market price of security reflects all the available information(d) Transparency in the trading mechanism and shorter settlement periods are critical for lowtransaction cost(e) All players in the market are price takers.
(1mark)
<Answer>
10.
Which of the following is
false
with respect to the effects of Open Market Operations (OMO) conducted by theRBI?(a) The open market purchase of gilts will ease the liquidity of banks(b) If the interest rate structure is to be moved upwards, the prices of securities in the OMO can be setat higher levels thereby signaling an upward movements in interest rates(c) The effort to cool the interest rate volatility through OMO may some times lead to aninterest differential loss to the RBI(d) If the PLR is reduced, the CP rate may also come down(e) Cut in repo rates will result in increase in the call rates and also other term money rates.
(1mark)
<Answer>
11.
Mr. Shah has deposited Rs.2,00,000 with Wicro Ltd. for two years at the rate of 12% p.a. If he wants towithdraw the entire amount at the beginning of 12
th
month, the amount that will be refunded by the company toMr. Shah as per Rule 8(1) of the Companies (Acceptance of Deposits) Rules, 1975, is(a) Rs.2,24,000(b) Rs.2,22,333(c) Rs.2,20,000(d) Rs.2,18,333(e) Rs.2,00,000.
(1mark)
<Answer>
 
 
3
12.
Following is the list of various depositors and their deposits with the Lord Bank:Name of depositorAmount of Deposits (Rs.)Prashant 1,70,500Prashant 1,24,000Srinivas 1,00,500Nandgopal 95,000Kalyan 82,000Kalyan 90,000The half-yearly insurance premium payable by the Lord Bank to insure this deposits as per DICGC guideline is(a) Rs.141.75(b) Rs.200.50(c) Rs.246.50(d) Rs.283.50(e) Rs.298.50.
(2marks)
<Answer>
13.
Money Market Mutual Fund is a special category of Mutual Fund,(a) Which provides higher returns to an investor as compared to debt funds(b) Which provides an investor the choice to invest for medium-term(c) Where safety level of the investment is high(d) Where liquidity is inadequate(e) Which invests mainly in unrated paper to generate high returns.
(1mark)
<Answer>
14.
Which of the following CDs carries both fixed and floating interest rates?(a) Asian Dollar CD(b) Installment CD(c) Jumbo CD(d) Thrift CD(e) Yankee CD.
(1mark)
<Answer>
15.
Which of the following statements is/are
true
with respect to an Asset Backed Commercial Paper?I. The paper sells at a high risk premium.II. Sometimes, an outside surety is also involved in the transaction.III. An organization with low credit rating or no credit rating can also access finance through this paper.(a) Only (I) above(b) Only (II) above(c) Only (III) above(d) Both (I) and (III) above(e) Both (II) and (III) above.
(1mark)
<Answer>
16.
Consider the following data pertaining to J.M. Mutual Fund (Income plan):Particulars Rs. in croreValue of investments 4,169.04Receivables 325.76Accrued income 95.48Other current assets 1,146.46Liabilities 977.12Accrued expenses 225.84Number of units outstandingEntry Load320 crore2.5%Mr. Prasad wants to purchase units of this scheme. The per unit price he has to pay is(a) Rs.14.20(b) Rs.14.53(c) Rs.14.91(d) Rs.15.25(e) Rs.18.27.
(2marks)
<Answer>

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