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Section 1: 41 Questions (1 Mark each): 1) (A) Beta reflects the systematic risk of the portfolio. (B) Beta reflects the unsystematic risk of the portfolio. . A) (A) is correct. B) (B) is correct. C) Both (A) and (B) are incorrect. D) Both (A) and (B) are correct. 2) For maintaining flexible ratio of asset allocation, one should ________________. A) rebalance the debt/equity allocation very frequently B) keep fixed percentage of equity and debt investments at all times C) generally avoid portfolio rebalancing D) rebalance the debt/equity allocation periodically 3) (A) Constant proportion portfolio insurance policy (CPPI policy) is the worst policy if the stock market moves in only one direction, either up or down. (B) Constant proportion portfolio insurance policy (CPPI policy) is the best policy if the stock market moves in only one direction, either up or down. . A) (A) is correct. B) (B) is correct. C) Both (A) and (B) are correct. D) Both (A) and (B) are incorrect. 4) Principal vectors of an active portfolio strategy are: A) Market timing. B) Sector rotation. C) Security selection. D) All of the above. 5) What is the reliable source of pertinent information for the investor in Mutual fund scheme? A) Advice of distributor. B) AMFI website. C) Financial press. D) Offer Document.

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6) (A) HPR (Holding Period Return) = (Cash payments received during the period + Change in price) / Beginning Price. (B) HPR = (Cash payments received during the period + price at the end of the period / Beginning Price. A) (A) is correct. B) (B) is correct. C) Both (A) and (B) are correct. D) Both (A) and (B) are incorrect. 7) (A) For a Call option: Intrinsic Value = Spot price - Strike Price. Intrinsic value must be positive or zero. (B) For a Put Option: Intrinsic Value = Strike price - Spot Price. Intrinsic value must be positive or zero. A) (A) is correct. B) (B) is correct. C) Both (A) and (B) are correct. D) Both (A) and (B) are incorrect. 8) The modern portfolio theory suggests that the portfolio returns can be optimized by _________. A Laddering the bond portfolio. B Investing in diversified equity funds. C Moving closer to the efficient frontier in terms of the risk return equation. D Investing in treasury bills and equities. 9) If one is a fundamental analyst, he/she would follow which one of the following approaches? A Passive diversified portfolio approach B Quantitative Analysis (searching for undervalued securities) C Efficient market hypothesis-strong D Efficient market hypothesis-weak 10) Derivatives on gold related securities and government securities that are traded on the stock exchanges are regulated by _______. A SEBI B RBI C Department of Company Affairs D Company Law Board

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A Market price at expiry B Purchase price C Limited by the premium D Unlimited 14) MFs are allowed to participate in securities lending. however. E/P ratio measures___________ A Market price of a share B Growth ratio C Cost of debt D Opportunity Cost of capital Financial Planning Academy . 2 & 3. A False B True C Sometimes D Cannot say 15) The companies in which significant amount of shares are held by the parent who also exerts some influence in the activities is known as__________. she must wait several months till her Fixed Deposit matures. What type of option should she invest in to protect against the market value of the stock increasing before her money becomes available? A Buy a call option B Buy a put option C Write a put option D Sell a call option 13) The risk of the writer of an option is _______. 12) Priti wants to invest in XYZ Ltd's stock. A1 B2 C3 D 1. 1) Broker's commission 2) Dealer's gross income from a transaction 3) Larger for illiquid securities than for liquid ones. A Associated companies B Wholly owned subsidiaries C Partly owned subsidiaries D Unlimited companies 16) Reciprocal of P/E ratio.11) The bid-ask spread is________.

a domestic company. D) Both (i) & (ii) are correct. A Both interim and final dividend B Only the final dividend C Only the interim dividend D On neither the interim nor the final dividend 18) Interest rate on Post Office Savings Bank is payable__________.17) For the Previous Year 2006-07. depending upon the terms of issue. B) Only (ii) is correct.. D) None of the above. (ii) Dividend income received by investors from Mutual Funds is Tax free. C) Both (i) & (ii) are true. (i) at a conversion ratio that never changes (ii) within a limited number of years after the preferred stock is issued (iii) only after a specified number of years have elapsed since the preference share was initially issued A) (i) only B) (i). pays an interim dividend in October 2006 of 15% and a final dividend of 40%. The distribution tax is payable on _________. (i) market price of an underlying asset (ii) difference between the current share price and the strike price (iii) profit made on the Option A) Only (iii) is true. A) monthly B) quarterly C) half yearly D) Yearly 19) A convertible preference share. Financial Planning Academy . C) Both (i) & (ii) are incorrect. XYZ Ltd. (ii) & (iii) C) (i) & (ii) only D) (i) & (iii) only 20) (i) Income received by Mutual Fund is Tax free. may be converted into a common share at the option of the shareholder_________. B) Only (ii) is true. A) Only (i) is correct. 21) An Option premium is_______.

A) False. B) Treasury. A) T-bills pay no interest. S-X ).22) A proprietary company can be a subsidiary of a listed company. D) Min ( 0. X-S ). 1902 D) Companies Act. C) Cannot say. Financial Planning Academy . the intrinsic value of the Call Option is ______. C) Zero Coupon. 1956 25) If the current share price is S and the set exercise price is X. each having a 20 years maturity. A) 11/07/2005 B) 10/07/2005 C) 09/07/2005 D) 01/04/2006 27) Convertible debentures are valued on the basis of Market Value. D) Difference between Issue price and face value. B) This statement is true. D) BB-rated corporate. 1873 C) Small Savings & Misc. C) Possible price appreciation above their discounted price. It will mature on ________. 28) T-bills pay interest to their investors by __________. B) True. S-X ). A) Max ( 0. A) This statement is false. which one is the most volatile? . 24) Senior Citizens Savings Scheme is governed by which Act? A) Banking Regulation Act. C) Cannot say. A) Municipal. D) Sometimes. 26) A PPF account was opened on 10th July 1990. 23) Among the four bonds given below. B) Coupon interest. D) Sometimes. X-S ). 1949 B) Government Savings Bank Act. Savings Act. B) Max ( 0. C) Min ( 0.

B (1). dividend. 31) Any lead manager for an IPO of a company requires_______. A SEBI Category-2 Certificate with 2% fee of issue amount B SEBI Category-1 Certificate C SEBI Category-2 Certificate D SEBI Category-3 Certificate with 2. moderate risk taking person. 3) He can elect the Chairman of the Board of Directors. C Both (1) and (2) are true. return and diversification. 2) He can vote for the common shareholders. Before he decides to invest he has come to you to educate himself regarding investment risk. but (1) & (2) are false. (3) & (4) are true. 1) He can legally demand information from the company and gain access to its books. C They are highly positively correlated. but (3) and (4) are false.5% fee of issue amount 32) An equity shareholder has the following right_______. A1 B2 C3 D 1. 2 & 3 33) A Preference Shareholder enjoys priority over common stockholders in respect of_______. dividend. D They are negatively correlated. he is paid before the common shareholders. 3) He can vote for the preference shareholders. D None of the above Financial Planning Academy . 4) He can vote for dividend to be paid to the equity shareholders. 2) In the event of liquidation. A Both (3) & (4) are true. Akash wants to know which among the following investment avenues normally has highest number of compounding periods in a year. (2). 1) Dividends cannot be paid to common stockholders unless he receives the stated dividend. A PPF B Time Deposit C NSC D RBI Bonds 30) All stock market indexes are most accurately characterized by which of the following statements about the degree to which they co-vary together? A They are uncorrelated. B They are perfectly positively correlated.29) Akash is a self employed. He is 10 years away from retirement.

34) In the derivatives market. is expected to be zero (Perfect hedge assumed) D All of the above 35) Which of the statements given below is not correct with regard to futures transactions? A Cash flow management. B Leveraging exposure. hedgers. Bond prices are less sensitive to changes in interest rates when the bonds have_______.80 with the market. speculators and arbitrageurs trade. A) Stay the same B) Decrease C) Increase D) Increase then Decrease 39) If a new issue was offered to the public at 15 times earnings but the market was pricing similar shares at 19 times. B) Sharpe & Jensen. which of the following performance measures is the best measure of risks? A) Jensen. A who enters derivatives market in order to reduce a pre-existing risk B who enters derivatives market in anticipation of a need in the near future C whose net wealth change. Hedger is a trader _______. D Portfolio substitution. C Benefit from premium payments. 37) Bond prices are sensitive to the coupon rate of the bond and the maturity term of the bond. A) large coupons and short maturity B) large coupons and long maturity C) small coupons and short maturity D) small coupons and long maturity 38) In the calculation of the present value of shares. at the time the derivative contract expires. D) Treynor. 36) If an investment has a correlation coefficient of 0. A) an example of low gearing B) a situation where the investor cannot take a position C) an appalling proposition to the investor D) a bargain not to be missed Financial Planning Academy . this would be_______. increasing the growth factor (all other things being equal) will cause the value to________. C) Sharpe.

A) his share in the total liabilities of the company B) partially paid-up amount of the shares allotted to him C) fully paid-up value of the shares allotted to him D) only the secured debt of the company Financial Planning Academy . is liable for _______. 41) A share holder who has paid for the first call. which of the following term best describes the movement of stock prices? A) Statistical. C) Diverse. in a limited company. D) Predictable. B) Random.40) Under the efficient market hypothesis.

= 10 .Section 2: 30 Questions (2 Mark each): 1) A 28 year old bachelor earning well for his age goes to a CFPCM Certificant for financial advice. Security (B) has 18% return and 8% SD A conservative investor should prefer _______________________. Solution: It is based on Normal Distribution theory. A = . A) Security (A) since it has 95% chance of giving +ve return. ie Bell Theory. . Market Risk Premium = (R m – Rf).) Expected Return = Return on security . C) Security (A) has lower Standard Deviation.867 Financial Planning Academy . He tells the Financial Planner that he does not want to look beyond 2 years and all he wants is advise on how to maximize his returns.2*8 => Sec B = 2 % Therefore there is 95% chance Sec. given in P. The most appropriate action is likely to be: (A) Help him to invest in equity markets. 3) Find Beta of security X if expected market premium is 15%. (B) Assist him in investing in debt instruments of appropriate maturity. A) 0. B = 18 .900 C) 0. A) Only (C) B) Only (B) C) Both (A) & (C) D) Both (B) & (C) 2) Security (A) has 12% return and 7% Standard Deviation (SD).700 D) 0. B will get Positive Return.2 % Expected Return of Sec. Rx = 20 Rx = Rf + (R m – Rf) * β 20 = 7 + 15 * β β = 0. B) Security (B) since it has 95% chance of giving +ve return.834 B) 0.2*6 => Sec.2* SD Expected Return of Sec. A.867 Solution: Rf = 7. D) Security (A) has lower Variance of return. risk free return is 7% and expected return of security X is 20%? . (C) Explain to him the risks of equity and debt markets. Chandra book.

50 D) None of the above. Service tax etc. C 2.7. 6000 Solution: Strike price of purchased call option Strike price of sold call option Difference Initial Cash flow: Bought option Sold option Difference Maximum profit 2040 2100 60 -35 +15 -20 60-20=40 per unit i. However it is constantly falling @ 5% per annum. There is a Call Option in 2008.35 and sells a call option of 2100 at Rs. 4000 B) Rs. 6.5%.86%. The lot size of Infosys is 100. B 3%. 28.e 4000. The Yield to Call will be ________ than the Yield to Maturity. 5) A companys current dividend is Rs. If the discount rate is 15% what is the value of its share? A) Rs.100 Face Value trades at Rs. A Higher B Lower C Same D Cannot Say Financial Planning Academy . 23. A) Rs. STT. Solution: Use Gordon Constant Growth Model P.00 B) Rs.5 P.75 C) Rs.V = D1/(r – g) where D1 = D0(1 + g) = 6 * (1-0. 2500 D) Rs.05) = 5.4) Shanu buys a call option of Infosys 2040 at Rs. D -3% 7) A 6% 2014 GOI Bond of Rs.102 on 15/12/2004. What is the Maximum profit for Shanu? Ignore brokerage. A 3. 63.5 6) If the post tax rate of return on an investment is 8% and the inflation rate is 5% the real rate of return is _______.V = 28. r = 15. 2000 C) Rs.15. g = .

89% B) 11. 12 months C 10%. the value of the property is Rs.43% D 14.59% C 16. 90 lakh out of which Rs. A 13.8) A treasury bill of face value of Rs.3% B 15. 13.25% C) 6.500/. for any period D 20%. 80.25% D) 16. profit was Rs. A 9 B 10 C 11 D None of the above Solution: Rights issue: For every 2 shares we get 1 share.59% 9) If the Buying price of a property is Rs. The annual yield is _______. A 30%. 1. 20 lakh. 97. The expected ex-right market price would be Rs.000/.1) * (365/N) Annual Yield = (100000/97500 – 1) * (365/60) = 15. What is the earning yield? A) 8.08 = 25 lacs 10) A company offers a rights issue of one for two for Rs.is selling at Rs. _______.00. 6months 12) Assume a company has issued Ten lakh equity shares and its current market price is Rs. A 20 lakh B 22 lakh C 25 lakh D None of the above Solution = Present Value of Property = Net Income / Market Yield = 2 / 0. The current market price is Rs. Price for rights share = 7 Total price for 2 shares and rights share = 33 Ex-right Market price = 33/3 = 11 11) An MF scheme can borrow money up to ___% of its Asset Under Management for maximum ___ months. 7 each. 3 months B 30%. It is slated to mature in 60 days. __________. 50 lakh was distributed as dividend. Last years. Current Market Price for 2 shares = 2 * 13 = 26.67% Financial Planning Academy .today.27% Solution: Annual Yield = (Future Value/Present Value . Net income is Rs. 2 lakh and Market yield is 8%.

(D) Decrease the reserve requirement of member banks. (B) Increase the reserve requirement of member banks. What was the amount he had initially invested? A) Rs. 57.000 B) Rs.30 16) If Reserve Bank of India wants to lower the interest rates in the economy. 4. A) (A) & (B) only B) (A) & (D) only C) (B) & (C) only D) (A) only Financial Planning Academy . Current Market Price = 80 Earning Yield = Profit per share / Current Market Price = 9 / 80 = 11. 57.000 on maturity.1 -10 -20 Standard Deviation of the Portfolio for equal weightage of securities A & B is________ A) 10.527 C) Rs.16.3 0 15 0. (ii) Investment would have low risk.a where it was compounded annually for the first 4 years and quarterly for the last 1 year. 78.Solution: Profit per share = 90 lacs / 10 lacs = 9. Which of the statement is voilative with respect to CFP Code of Ethics? A) (i) Only B) (ii) Only C) Both (i) and (ii) D) None of the above 14) Mohan invested a sum for 5 years @ 8% p. Probability Security A (Returns in %) Security B (Returns in %) 0.720 D) Rs.25 -5 0 0. (C) Increase the discount rate.1 30 40 0.69 C) 12.88 D) 14.29 B) 11. He received Rs. it would consider which of the following option/s? (A) Purchase government securities. 85.25 % 13) While making an investment in a Debt fund for your client you make the following remarks : (i) Rate of return by the instrument in past is 8.5% and is expected to continue in future.25 20 25 0.203 15) Have a look at the data given below and answer the query appearing below .

200 at the end of the year. 21) Dividend received by the writer of a Call during the life span of an Option __________.80.6% B) 15. A) Support level.00% C) 12. expected market premium is 15% and Beta of security is 0. The sum total of volatility of A and B respectively. 32000 at the end of the year. A & B. 40000 now and Rs. C) Short interest. What is the expected rate of return of the security? .15. A) can be pocketed by the writer B) has to be given to the buyer of the option.00% D) 20. A) A and B have a correlation of 1 B) the portfolio is equally divided between A and B C) A and B have a correlation of Zero D) the return on the portfolio is equal to the sum of returns of A and B 18) Risk free rate of return is 8%. What would you prefer? A Take Rs.17) Consider a portfolio of two investments viz. represented by standard deviation of the two investments. only if he eventually exercises the option C) increases the premium value by an equivalent amount D) decreases the strike price 22) Mr. A) reduce stockholders equity B) increase liabilities C) decrease net income D) not affect total assets 20) Which of the following technical indicators measure the strength of the market by comparing the number of stocks that advance or decline in a particular trading day? . 25000 now and Rs.50000 to you and the interest is 12% pa compounded monthly. 50000 now Financial Planning Academy . 60000 after 1 year B Take Rs.8. this transaction will________. β = 0. A owes Rs. Rf = 8 Rx = Rf + (R m – Rf) * β = 8 + 15 * 0. B) Breadth of the market. C Take Rs.8 = 20 % 19) If a Corporation declares and pays dividend. D) Call-Put ratio. D Take Rs. will be equal to the volatility of the portfolio as a whole if _________. A) 13.00% Solution: Market Risk Premium = (R m – Rf) = 15 .

C To receive Rs 50000 today. 15. 250000 at the end of 14 years. β = 0.3% B 18. Which one of the following is the best investment opportunity for Manish? A To receive Rs. The compound annual growth rate is _____.8% C 75% D 15% 24) Manish estimates his opportunity cost on investments to be 12% compounded annually. The premium is Rs. 350. is Rs.7. D To receive Rs. 45000 in stocks at the beginning of the year.5 R m = 15 26) The August call option exercise price of HLL is Rs. The current share price is Rs. 40000 at the end of four years and Rs. Rp = 20 Rp = Rf + (R m – Rf) * β 20 = 5 + (R m – 5) * 1.45% 3 5. 200 and 4 years later you sell it for Rs. Hitesh Shah has a portfolio with 23 different equities. A Nil B5 C 10 D 15 27) Zarina invested Rs. 350.5%) (Assume risk free rate of 5%)? A 14% B 15% C 16. 4000 at the year end. 25) Mr. She received bonus shares worth Rs. _______. ignoring transaction costs. The portfolio increased by 20% and has a beta of 1. The intrinsic value of the call. Rf = 5. compute by what percent the market changed (round to nearest 0.4. The value of the portfolio at the end of the year was Rs.5% D 17% Solution: Market Risk Premium = (R m – Rf). Utilizing the Capital Asset Pricing Model. 360.23) You buy a growth-oriented non-dividend paying share for Rs.50. A 10.8. 120000 eight years later (at the end of the 12th year).2% Financial Planning Academy . Calculate the returns of the portfolio during the year? 1 8% 2 . 5000 at the beginning of each six-month period for nine years compounded semiannually. B To receive Rs.5% 4 . 47000.

37 B) Rs.06 * 10 = 0.000 units = 6000.2% Solution: Rx = Rf + (R m – Rf) * β = 8 + (14 – 8) * 0.000 units – DDT(for debt oriented mutual fund = 14.00 C) Rs. 41 C) Rs. Exercise price is Rs. Dividend per unit = 6% of Face Value = 0. Dividend receivable by investor = Dividend for 10.5 Financial Planning Academy . 35 30) The NAV of a debt oriented Mutual Fund is 22. The expected return of Security A with Beta of 0. You expect that the return on market would be 14%.28) Risk free return of Security A is 8%.60 B) Rs.653.000. 4. 38 D) Rs. 38. 40 and a 3 month call on XYZ share is traded at Rs.6 Dividend for 10. Calculate the dividend receivable by an individual investor if he holds 10. A) Rs. record date being 25th June 2006.250.25.158. 5.8% B) 15. Spot price is Rs. A) 17.7 = 12.00 Solution = NAV = 22. 6.4% C) 12.2 % 29) Consider that an investor writes a covered call on XYZ share.000 units.025%) = 6000 – 0. It has declared a dividend of 6%. What is the initial cash flow incurred at the time of investment? A) Rs.70 is ________. 5.14025 * 6000 = 6000 – 841.5 = 5158.50 D) Rs.2% D) 18.25 cum dividend. 3.

500 each. 145 Solution: 30% of value of debentures = 0.28.25%) = 9775.Section 3: 16 Questions (4 Mark each): 1) Sunil has purchased 100 convertible debentures of XYZ on 1/1/2001 at Rs. of shares received on exercise of option = 100 Cost of Acquisition of Shares = 15000 / 100 = 150 2) A Firm's Current Ratio is 1. A) Rs. Current Liability is Rs.3 * 100 * 500 = 15000 No. 150 B) Rs.00% C) 8.10%. Sunil exercised his option on 1/1/2007 and received 100 shares. 10000 with a mutual fund which charged him a load of 2. Compute the cost of acquisition off these shares. 2560 D) Rs. Ignoring other costs over 5 years. What would be the cost of goods sold for the firm? . A) Rs.49% + 1.FV = 14693. what annual returns would the fund have to produce to equal the value that the investment would have earned in 8% fixed deposit? A) 8.2.59% B) 9. PV = -10000* (1-2. 500 C) Rs.25%. N = 5.59% Solution: Step 1) Value of Investment with 8% FD: PV = 10000.49% Financial Planning Academy . 1600. Management and other fees charged is 1.28 Step 2) For this Accumulated amount FV = 14693. and Inventory Turnover Ratio is 8. I(Return) = 8. 1920 C) Rs. 50 each after 6 years. 2240 B) Rs. I = 8.4. 2750 Solution: Current Ratio = Current Assets / Current Liabilities Current Assets = 2240 Acid Test Ratio = Quick Assets / Current Liabilities Quick Assets = 1920 = Current Assets – Inventories Inventories = 320 Inventory Turnover Ratio = Cost of goods sold / Inventories Cost of goods sold = 8 * 320 = 2560 3) Balvinder placed Rs. N = 5.49% Annual return = 8. 155 D) Rs.1%(Annual charges) = 9. Acid Test Ratio is 1.00% D) 9. 30% of the value of debentures in convertible into one share of Rs.

and expectations of selected asset classes and rebalancing once or twice per year to keep the portfolio within the parameters of the desired strategic mix. economic forecasts. The rate of return is lower than the cost of capital 3. The correlation coefficient r between Security A and the market is 0.8 * 0. A 1 only is true B 2 only is true C Both 1 & 2 are true D Neither 1 nor 2 is true Financial Planning Academy . The discounted cash flows are lower than the investment outlay 2. 2.4) If the net present value of a series of discounted cash flows is less than zero. The return of investment is higher than the internal rate of return 4. 3 & 4 B 2 and 3 only C 1 and 4 only D 1 only 5) Security A has a standard deviation of 23% and the market has a standard deviation of 18%. 2) Tactical asset allocation involves evaluating asset classes or industries as to their value and selling undervalued classes and purchasing overvalued classes. What is the % of the change in Security A can be explained by changes in the market? A 80% B 50% C 36% D 64% Solution = % of change in Security A explained by change in market = Square of correlation coefficient = 0.80. The internal rate of return was the discount rate used 4 A 1.8 = 64 % 6) Which of the following statements is/are true regarding strategic and tactical asset allocation? 1) Strategic asset allocation involves selection of the correct asset allocation based on risk tolerance of the client. one could interpret that: 1.

The dividend for XYZ company is expected to be 100% greater next year. Reviewing her budget she determines she can afford to pay Rs.00% D) 6.00. the dividend is expected to grow annually at a rate of 8%. what is the maximum you would pay for the security? A) Rs. C D C.70 C) Rs. 142.51612.000 C) Rs.1 Market 12 15 1 Assume risk-free rate is 6%.000 D) Rs. C B A. 15. 8. A.000.00.50 B) Rs. PV = 4.50. A 8) Returns on a security held for 5 years by Praveen are: First year 7%.The rankings based on the Treynor Ratio (in the order of best to worst) is ___________. 137. B C B. 159. 2 last week.000 Solution: PMT = -15000. How much can she afford to borrow? Indicate the nearest amount.37% C) 8.3 B 14 18 0. The growth rate for the following year is expected to be 50%. 6. B. A) Rs.000 B) Rs. fifth year 10%. In the third year and thereafter.000 per month for three years towards the car. C. A A.50 10) Shashi wants to purchase a car which is costing Rs. Find the standard deviation of the security. The going rate of interest is 1% per month for 3 years. I = 1%. If your requirement is a retu rn of 12%.9 C 16 17 1. 5. 140. A) 8.50% B) 7. fourth year 6%.7) You are evaluating the following table for your customer: Fund Average Returns (%) Standard Deviation (%) Beta A 22 24 1. N = 3 * 12.50.50 D) Rs.57 (approx 450000) Financial Planning Academy . third year -9%.50. second year 3%.59% 9) The XYZ Company paid a dividend of Rs. 4. B. 8.

4.6 and r23 = 0.60.000 units of May expiring put options on XYZ with a strike price of Rs. will you buy the stock at today’s price? A Yes.40.04% C Nil D 25% Financial Planning Academy .000 in the May futures contract. It closes today at Rs. The Standard Deviation of those securities are SD1 = 6%. 1. Units sold = 2000 Proceeds from sale = 2000 * 110 = 220000 Net obligation from corporation = 124200 + 220000 = 344200 12) ABC Ltd.25% D 7% 14) The Portfolio consists of two securities. 3. 95. 100 and your required rate of return is 10%. C No.940 yesterday. 3.900 for a premium of Rs.4 Contract size = 3000 Net Obligation from corporation = 3000 * 41. SD2 = 9% and SD3= 10%.200. Raju has a short position of 3. 3. X and Y in the ratio of 70:30.77% B 8.5 & w3=0.000.58% C 8.800. If the stock is currently selling for Rs.3.44.4 = 124200 Premium for selling = 110 per unit. 3. what is the portfolio risk? A 13. 2 & 3. B) Receive Rs. Calculate the Standard Deviation of the portfolio returns? A 7. because the stock is undervalued based on the dividend growth model. because the stock is overvalued based on the dividend growth model. 13) A portfolio consists of 3 securities 1. C) Receive Rs. D) Pay Rs. because the stock is a bad investment based on a risk-return relationship. What is his net obligation to/from the clearing corporation today? . because the stock is a good buy based on a risk-return relationship. Given that i) Standard Deviation of X is 10% ii) Standard Deviation of Y is also 10% and covariance between them is 16%. The proportion of those securities are w1=0.898.800.6 Price Difference = 41.2.44. A) Pay Rs.11) The May futures contract on XYZ Ltd closed at Rs. r13 = 0. The correlation coefficient among these securities are r12 = 0. 3. 3.200. B No. He sells 2.13% B 6. w2=0. 6.75 that is growing at 8%. The spot closes at Rs.7. Solution: Closing price yesterday = 3940 Closing price today = 3898.’s stock has a current dividend of Rs. D Yes. 110 per unit.

000 in XYZ mutual fund on 1/1/2000. PV = -10000. 300 on 31/12/2000. Rs.5 years ago for Rs. If the bond matures today and the face value is Rs. B) 8.67%. He received cash dividends of Rs. 300. FV = 15000.40% B) 5.08% C) 11. 200 & Rs. He reinvested all the dividends received in the fund. 31/12/2001. 15. what is the average annual compound rate of return (calculated semi-annually) that the client realised on her investments? A) 10. 200. N = 4. 10.15) Mohan invested Rs.83%.34% D) 10.00%. He sold the fund on 1/1/2004. 1. 525.16% Financial Planning Academy . D) 10.67% 16) A client purchased a zero coupon bond 6. IRR = 10. What is the IRR if he sold the fund for Rs. C) 8.000. Rs.000? A) 8.53%. Solution : Since Dividends are reinvested. 31/12/2002 & 31/12/2003 respectively.

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