Section B (2 Mark)
An investor is considering the purchase of a small office building and, as part of his analysis, form the following given data calculate the Net Operating Income (NOI).
Section C (4 Mark)
OMG Petro Ltd produces and markets crude oil. The following are selected numbers from the financial statements for 1992 and 1993 (in millions).
The firm had capital expenditures of Rs950 million in 1992 and Rs1 billion in 1993. The working capital in 1991 was Rs190 million, and the total debt outstanding in 1991 was Rs5.75 billion. There were 305 million shares outstanding, trading at Rs21 per share.
Estimate the cash flows to equity in 1992 and 1993(in Rs Millions)
Section C (4 Mark)
Assume the following;
With this agreement, every 6 months, the transfer of funds takes place between fixed rate payer and floating rate payer.
What would Net Cash flows after 6-months from the initiation date?
Section A (1 Mark)
A business angel is best described in which one of the following statements?
Section B (2 Mark)
How much should one deposit today in a bank account paying interest compounded quarterly if you wish to have Rs. 10000 at the end of 3 months, if the bank pays 5% annually?
Section C (4 Mark)
Read the senario and answer to the question.
Calculate the Net Worth of Mr. Adhikari as on 31/03/2009.
Section A (1 Mark)
Which of the following is a special human trait that we need to sharpen and use very often in CRM?
Section A (1 Mark)
Which one of the above statements is/are not a important needs of clients in the context of relationship management:
Section A (1 Mark)
A good example of closed-end credit is:
Section C (4 Mark)
Zenith Finance is a big financial firm which owns several mutual funds. The funds are managed individually by portfolio managers but it has an investment committee that oversees all of the funds. This committee is responsible for evaluating the performance of the funds relative to the appropriate benchmark and relative to stated investment objectives of each individual fund. During a recent investment committee meeting, the poor performance of its Equity Funds were discussed. In particular, the inability of the portfolio managers to outperform their benchmarks was highlighted. The net conclusion of the committee was to review the performance of the manager responsible for each fund and dismiss those managers whose performance had lagged substantially behind the appropriate benchmark.
The fund with the worst relative performance is the Zenith Large Cap Fund which invests in large cap stocks. A review of the operations of the fund found the following:
• The turnover of the fund was almost double that of other similar style mutual funds
• The fund’s portfolio manager solicited input from her entire staff prior to making any decision to sell an existing holding
• The beta of the Zenith Large Cap Fund’s portfolio was 65% higher than the beta of other similar style mutual funds
• The portfolio manager refuses to increase the Capital Goods sector weighting because of past losses the fund incurred in the sector
• The portfolio manager sold all the fund’s Oil Marketing Companies stocks as the price per barrel of oil rose above $105. He expects oil prices to fall back to the $80 to $85 per barrel
• No stock is considered for purchase in the Large Cap Fund unless the portfolio manager has 10 years of financial information on that company.
A committee member made the following 2 comments:
Comment 1: “One reason for the poor performance of Large Cap Mutual Fund is that the portfolio lacks recognizable companies. I believe that good companies make good investments
Comment 2: “The portfolio manager of the Large Cap Fund refuses to acknowledge his mistakes. He seems to sell stocks that appreciate, but she holds stocks that have declined in value
The two behavioral biases exhibited respectively in the above 2 comments from the committee are:
Section A (1 Mark)
Guarantees covering security deposit/earnest money/advance payment/ mobilization advance etc. would come under__________________ category
Section C (4 Mark)
Consider the following information for three mutual funds
Risk free return is 7%. Calculate Treynor measure?
Section A (1 Mark)
_____________allow investors to increase diversification in direct real estate holdings by investing in groups of real estate projects.
Section B (2 Mark)
Major phases of budgeting process are:
Section A (1 Mark)
Hybrid plans are
Section A (1 Mark)
Investments that are difficult to convert to cash are said to have _________
Section C (4 Mark)
Saurabh decided to invest Rs.1,00,000/- in a portfolio of equities and debt mutual funds. He invests Rs. 60,000/– in equities, and 40,000/– in debt mutual fund.
A year later, Saurabh’s portfolio worth reached to Rs. 1,35,000/– (90,000/– equity, 45,000/– debt mutual fund). During the year Rs. 2,500/– cash dividends was received on the equity and Rs. 1,000/– dividend was received on debt mutual fund. Find out Saurabh’s return on equity fund & debt mutual fund for the year?
Section B (2 Mark)
The two aspects of Regret bias are_____________ and _____________.
Section A (1 Mark)
In …………………without delivery possession of the mortgaged property, there mortgager binds himself personally to pay the mortgage money
Section A (1 Mark)
An activity is presumed to be a profit-making activity rather than a hobby if the
Section A (1 Mark)
Which of the following is a risk of using credit derivatives?
Section C (4 Mark)
Mr. Rajesh Rawat deposits Rs. 15,000 per month at the end of the month for 6.50 years in an account that pays a ROI of 8.80% per annum compounded quarterly. What will be the amount in the account after 6.50 years?
Section B (2 Mark)
Gold trades at Rs.16000 per 10 gms in the spot market. Three-month gold futures trade at Rs.16150. One unit of trading is 1kg and the delivery unit for the gold futures contract on the NCDEX is 1 kg. A speculator who expects gold prices to rise in the near future buys 1 unit of gold futures. Two months later gold futures trade at Rs.15900 per 10 gms. He makes a profit/loss of ______________.
Section B (2 Mark)
PPF is a
Section B (2 Mark)
As per Double Taxation Avoidance Agreement, the Royalties in UAE is charged at:
Section B (2 Mark)
Consider the single-factor APT. Stocks A and B have expected returns of 15% and 18%, respectively. The risk-free rate of return is 6%. Stock B has a beta of 1.0. If arbitrage opportunities are ruled out, stock A has a beta of __________.
Section A (1 Mark)
With the______________, the buyer gets no protection from encumbrances. This deed type has very specialized uses.
Section B (2 Mark)
A dealer sold one January Nifty futures contract for Rs.250,000 on 15th January. Each Nifty futures contract is for delivery of 50 Nifties. On 25th January, the index closed at 5100. How much profit/loss did he make ?
Section C (4 Mark)
You have collected the following information regarding Companies C and D:
The two companies have the same total assets.
The two companies have the same operating income (EBIT).
The two companies have the same tax rate.
Company C has a higher debt ratio and a higher interest expense than Company D.
Company C has a lower profit margin than Company D.
Based on this information, which of the following statements is most correct?
Section B (2 Mark)
The ____________ provides an unequivocal statement on the expected return-beta relationship for all assets, whereas the _____________ implies that this relationship holds for all but perhaps a small number of securities.
Section A (1 Mark)
A market timing approach that increases the proportion of funds in stocks when the stock market is expected to be rising, and increases cash when the stock market is expected to be falling is a:
Section A (1 Mark)
__________ is a tangible company asset that can (and should) be inventoried and managed.
Section B (2 Mark)
The favorable difference received by buyer/holder on the exercise/expiry date, between the final settlement price as and the strike price, will be recognized as ___________
Section B (2 Mark)
Mansi needs Rs. 25,000/-, 5 years from now. She would like to make equal payments at the Begin of each year from now onwards into an account that yields annual ROI @ 7 % per annum. What should be her annual payments?
Section C (4 Mark)
Read the senario and answer to the question.
What would be the taxable amount on gratuity received by Jogen, if he would retired from an organization where employees are not covered under Gratuity Act?
Section C (4 Mark)
Medicon is one the world's largest manufacturer of implantable biomedical devices, reported earnings per share in 1993 of Rs3.95, and paid dividends per share of Rs0.68. Its earnings are expected to grow 16% from 1994 to 1998, but the growth rate is expected to decline each year after that to a stable growth rate of 6% in 2003. The payout ratio is expected to remain unchanged from 1994 to 1998, after which it will increase each year to reach 60% in steady state. The stock is expected to have a beta of 1.25 from 1994 to 1998, after which the beta will decline each year to reach 1.00 by the time the firm becomes stable. (The Risk Free rate is 6.25%.)
Estimate the value per share, using the three-stage dividend discount model.
Section C (4 Mark)
Read the senario and answer to the question.
Calculate the retirement corpus required by Raman to generate his post-retirement expenses.
Section A (1 Mark)
Deduction under section 80QQB is allowed to an author of a book of literary or artistic or scientific nature who is resident in India to the extent of:
Section A (1 Mark)
If the intrinsic value of a stock is greater than market value, which of the following is a reasonable conclusion?
Section C (4 Mark)
Read the senario and answer to the question.
Mrs. Deepika’s brother is impressed with Manav Fashion Ltd. an online clothing firm that focuses on the 18–22 age bracket. Their prices are much lower than their competitors, and the quality is high. Reading about the firm on its web site and in various financial newspapers, her brother has learned that the company plans to expand its clothing lines. The prevailing price of its share is 70 per share. Manav Fashion Ltd. has had recent annual earnings of Rs. 5 per share. Only three other companies have very similar business to Manav Fashion Ltd. and have stock that is traded and there PE ratios are as follows:
Her brother asked Mrs. Deepika to guide him in investing the Manav Fashion Ltd. Getting the query from her brother Mrs. Deepika asks your advice on this matter. As a Chartered Wealth Manager what will be your advice?
Section C (4 Mark)
Read the senario and answer to the question.
Mr. Adhikari bought agricultural land in Patna in 94-95 for 1.75 lakh. That land was vacant for last so many years. But due to establishing a “Commercial Processing Zone” the Bihar Government has issued a notice for compulsorily acquirement on 12/08/2003. In 2006 government has fixed compensation for Rs. 6.50 lakhs and acquired it on 09/01/2006. Rs. 2 lakh was received by Mr. Adhikari on 07/03/2006. Mr. Adhikari and others were not satisfied with the compensation and file a suit in the court.
Balance compensation paid by Bihar Government on 08/10/2008. The compensation is enhanced by another 1.50 lakhs by the Bihar Government which paid by the Government on 11/12/2008.Compute Capital Gain tax in the hands of Mr. Adhikari for the assessment year 2009–10.
Section A (1 Mark)
H Ltd, a UK resident company, owns 100% of the share capital of two other UK companies and 80% of the share capital of T SA, a company resident in Italy.H Ltd has three associated companies.
Section A (1 Mark)
The following is capital receipt:
Section B (2 Mark)
Profitability Index is
Section A (1 Mark)
For any given stock, which of the following must be true?
Section B (2 Mark)
What is the expected percentage price change for a bond with an effective duration of nine in response to an increase in yield of 30 basis points?
Section B (2 Mark)
Shiva Industries Ltd. earns Rs. 2 per share and distributes 40% of its earnings as cash dividends. Its dividends grew annually at 7%. What will be the stock’s price if the required rate is 10%?
Section A (1 Mark)
The two primary tools of a technical analyst are:
Section A (1 Mark)
Vineet invests Rs. 5000/- per month at the beginning of the month for 10 years in Recurring Deposit account that pays 8.5% p.a interest compounded quarterly. What will be the accumulated amount in his account.
Section C (4 Mark)
Consider the multifactor APT. There are two independent economic factors, F1 and F2. The risk-free rate of return is 6%. The following information is available about two well-diversified portfolios:
Assuming no arbitrage opportunities exist, the risk premium on the factor F1 portfolio should be __________.
