Section A (1 Mark)
An aggressive asset allocation would contain larger proportions of __________ than a conservative allocation.
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)
Which of the following is not true about traditional defined benefit plans?
Section A (1 Mark)
Deduction u/s 80U in case of permanent physical disability (including blindness) allowed to:
Section A (1 Mark)
Convertible bond arbitrage is to event driven as _________ is to corporate restructuring.
Section A (1 Mark)
________ refers to the activity of the real estate market as it reacts to the force of supply and demand.
Section A (1 Mark)
A ____________________ tax system takes the same percentage of each person's income, regardless of whether the income is high, medium, or low.
Section B (2 Mark)
On 1st February 2009, Mr. Dutt took a personal loan of Rs. 1,00,000 for a period of 3 years at an 21% rate of interest .The loan is to be on monthly EMI on monthly reducing balance method.
What would be interest and principal amount to be paid in November 2011?
Section C (4 Mark)
A stock ABC Ltd. is trading at Rs. 450. Mr. XYZ is bullish on the stock. But does not want to invest Rs. 450. He does a Long Combo. He sells a Put option with a strike price Rs. 400 at a premium of Rs. 1.00 and buys a Call Option with a strike price of Rs. 500 at a premium of Rs. 2.
What would be the Net Payoff of the Strategy?
• If ABC Ltd closes at 625
• If ABC Ltd closes at 328
Section C (4 Mark)
Mr. A bought XYZ Ltd. For Rs. 3850 and simultaneously sells a call option at an strike price of Rs. 4000. Which means Mr. A does not think that the price of XYZ Ltd. will rise above Rs. 4000. However, incase it rises above Rs. 4000, Mr. A does not mind getting exercised at that price and exiting the stock at Rs. 4000 (Target Sell Price = 3.90% return on the stock purchase price). Mr. A receives a premium of Rs. 80 for selling the call. Thus net outflow to Mr. A is (Rs. 3850 – Rs. 80) = Rs. 3770. He reduces the cost of buying the stock by this strategy.
What would be the Net Payoff of the Strategy?
• If XYZ closes at 3350
• If XYZ closes at 4800
Section C (4 Mark)
Nifty is at 3200. Mr. XYZ expects large volatility in the Nifty irrespective of which direction the movement is, upwards or downwards. Mr. XYZ buys 2 ATM Nifty Call Options with a strike price of Rs. 3200 at a premium of Rs. 97.90 each, sells 1 ITM Nifty Call Option with a strike price of Rs. 3100 at a premium of Rs. 141.55 and sells 1 OTM Nifty Call Option with a strike price of Rs. 3300 at a premium of Rs. 64.
What would be the Net Payoff of the Strategy?
• If Nifty closes at 2929
• If Nifty closes at 4325
Section C (4 Mark)
You are given the following set of data:
Historical Rate of Return
Determine the arithmetic average rates of return and standard deviation of returns of the NSE over the period given.
Section B (2 Mark)
You have Rs. 5 Lacs available to invest. The risk free rate as well as the borrowing rate is 8%. The return on the risky portfolio is 16%. If you wish to earn 22% return, you should:
Section A (1 Mark)
Which of the following is NOT one of the phases of the life-cycle theory of asset allocation?
Section B (2 Mark)
Rakhi purchased a piece of land on 25-4-1979 for Rs.80000. This land was sold by him on 23-12-2011 for Rs.1250000. The market value of the land as on 1-4-1981 was Rs.98000. Expenses on transfer were 1.5% of the sale price. Compute the capital gain for the assessment year 2012-13. [CII-12-13: 852,11-12: 785,10-11:711]
Section A (1 Mark)
The________________ deals with the double-edged enigma of why individuals like dividends (in developed country where dividends are taxable) and why this method of income distribution persists in light of quite burdensome double taxation.
Section B (2 Mark)
What are the two strategies that have the broadest mandate across financial, commodity, and futures markets?
Section C (4 Mark)
Paridhi has an investment portfolio of Rs.2,00,000; the initial portfolio mix is Rs.1,00,000 in stocks, Rs.60000 bonds and Rs.40000 in bank.
If market goes up by 10% and the value of bonds decreases by 10%, what should Paridhi do under the constant mix policy?
Section B (2 Mark)
Both __________ depend on electronic information that has been collected about customers, in place of human knowledge, to build and manage relationships.
Section C (4 Mark)
As a CWM you are required to calculate the tax liability of an individual whose Taxable income is:
• $ 142700 in US dollars and he is a US citizen (married Individual Filing Joint returns and Surviving Spouses)
• $ 67250 in SGD and he is a citizen of Singapore
Section A (1 Mark)
Short-term to medium-term loans repayable in two or more consecutive payments are known as:
Section A (1 Mark)
Under Nayak Committee Method the gross working capital is uniformly assumed to be a minimum of ________ of projected gross sales
Section B (2 Mark)
The tracking error of an optimized portfolio can be expressed in terms of the ____________ of the portfolio and thus reveal ____________.
Section A (1 Mark)
_______________ and _______________ mandates are two kinds of service level contracts
Section B (2 Mark)
Conventional theories presume that investors ____________ and behavioral finance presumes that they ____________.
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 of the following comes at the high end of product margin in the value added pyramid of wealth management?
Section B (2 Mark)
In case of a defined benefit plan where the benefit payable is based on the terminal salary, an increase in of 10% of the wages of the employees would increase the contribution to be made by the employer for the benefit by
Section A (1 Mark)
Monitoring and rebalancing a portfolio over time involves all of the following costs EXCEPT
Section B (2 Mark)
You purchased one XYZ March 50 call and sold one XYZ March 55 call. Your strategy is known as
Section C (4 Mark)
Suppose ABC Ltd. is trading at Rs 4500 in June. An investor, Mr. A, shorts Rs 4300 Put by selling a July Put for Rs. 24 while shorting an ABC Ltd. stock. The net credit received by Mr. A is Rs. 4500 + Rs. 24 = Rs. 4524.
What would be the Net Payoff of the Strategy?
• If ABC Ltd closes at 4053
• If ABC Ltd closes at 5025
Section B (2 Mark)
The Dow theory illustrates that the three forces that simultaneously affect stock prices are ____________.
Section B (2 Mark)
An investment opportunity having a market price of Rs. 100,000 is available. You could obtain a Rs. 75,000, 25-year mortgage loan requiring equal monthly payments with interest at 9.5 percent. The following operating results are expected during the first year.
What is the Overall capitalization rate?
Section B (2 Mark)
You purchase one ILM 70 call option for a premium of Rs6. Ignoring transaction costs, the break-even price of the position is
Section A (1 Mark)
Which of the following is classified as passive income in US?
Section A (1 Mark)
The price that the writer of a put option receives for the underlying asset if the option is exercised is called the
Section B (2 Mark)
There are three stocks, A, B, and C. You can either invest in these stocks or short sell them. There are three possible states of nature for economic growth in the upcoming year; economic growth may be strong, moderate, or weak. The returns for the upcoming year on stocks A, B, and C for each of these states of nature are given below:
If you invested in an equally weighted portfolio of stocks A and B, your portfolio return would be ___________ if economic growth were moderate.
Section A (1 Mark)
In reality, when risk and uncertainty or incomplete information about an alternative or high degree of complexity is introduced, people or organizations may be have somewhat different from rationality. This is called ___________.
Section A (1 Mark)
The fact that a consumer feels a strong moral and ethical responsibility to repay a loan on time refers to the ______________________ of that individual.
Section A (1 Mark)
The eligibility Criteria for Self Employed Professionals & Businessman for minimum annual income of the applicant in case of personal loan is:
Section B (2 Mark)
The estimated Net Operating Income of an office building is Rs. 12000 per year. An appraiser decide the appropriate capitalization rate is 12% comprised of 10% return on investment and 2% for depreciation, what is the estimated value of the building?
Section C (4 Mark)
Read the senario and answer to the question.
If Mr. Mehta is paying interest rate 12%p.a on his housing loan and 10% p.a. on car loans, in how many months would he pay off his housing loan and car loan?
Section C (4 Mark)
Read the senario and answer to the question.
Nimita wants to know if she were to meet with an accident and get permanent disability in the third year of her Term Insurance policy, what amount of the premium due in the fourth year would be payable by her if the premium being paid towards the policy is Rs. 15,000 with sum assured of Rs. 50 lakh?
Section A (1 Mark)
______________ is based on a particular (theoretical) lottery game that leads to a random variable with infinite expected value, i.e., infinite expected payoff, but would nevertheless be considered to be worth only a very small amount of money.
Section B (2 Mark)
Total income for assessment year 2012-13 of an individual including long-term capital gain of Rs. 60,000/- is Rs. 1,80,000/-. The tax on total income shall be: [CII-12-13: 852,11-12: 785,10-11:711]
Section C (4 Mark)
Read the senario and answer to the question.
Mr. Bhatia is interested to invest in a mutual fund SIP account and expecting which will grow by atleast 12% for Neena’s education need. Calculate how much he has to deposit per month?
Section C (4 Mark)
J&M had a return on equity of 31.5% in 1993, and paid out 37% of its earnings as dividends. The stock had a beta of 1.25. (The treasury bill rate is 6%.) The extraordinary growth is expected to last for ten years, after which the growth rate is expected to drop to 6% and the return on equity to 15% (the beta will move to 1).
Assuming the return on equity and dividend payout ratio continue at current levels for the high growth period, estimate the P/BV ratio for J&M.
Section C (4 Mark)
Read the senario and answer to the question.
Harish incurred Rs. 10 Lakh on the construction of his house five years ago which has depreciated today to Rs. 7 Lakh. The cost of construction over the period has gone up by 70%.The depreciated value of household items is Rs. 2.5 Lakh and their present cost of replacement is Rs. 4 Lakh. Harish wants to buy a Householders’ insurance policy in such a way that the house is insured on reinstatement basis and household goods on the basis of written down value. How much total insurance coverage should he take from the insurance company?
Section B (2 Mark)
Sunil insured the building of his house for a sum of Rs.500000 against fire insurance. One day the house is totally gutted in a devastating fire. The insurance surveyors certified that the building is a total loss with no salvage value and that the insurable value of the building just prior to the loss was Rs.1000000. The insurer will pay to Sunil:
Section A (1 Mark)
With the______________, the buyer gets no protection from encumbrances. This deed type has very specialized uses.
Section A (1 Mark)
______________ is a manifestation of mental accounting that can cause people to take on more risk as their wealth increases.
Section B (2 Mark)
If the currency of your country is appreciating, the result should be to ______ exports and to _______ imports.
Section C (4 Mark)
Read the senario and answer to the question.
Nimita purchased 500 shares of ABC Ltd., a listed company at Rs. 45 per share on Sep. 15,2002. The company offered to buy back its shares on June 15, 2009 which Nimita accepted at a price of Rs. 75 per share on Jul 1, 2009. What is the tax liability in the hands of Nimita for this transaction for Assessment Year 2010-11? Cost inflation indices are 2002-03: 447 and 2009-10 632. (Ignore Education Cess)
Section B (2 Mark)
If a portfolio manager has a good ability to forecast overall market but a poor ability to select undervalued securities, the following strategy would suit best to him.
Section C (4 Mark)
Sajan Mathews, aged 29 years (as on 2nd April, 2010), is working with a Multi National Company since December 2004. He has approached you, a CWM® for preparing his wealth plan. He is staying in his own house at Ahmedabad. His wife Jennifer, aged 31 years, is a fashion designer. She has earned a net profit of Rs. 4 lakh in FY 2008-09. They have a son, Mark of age 4 years (born on 12.02.2006), and a daughter, Stephanie (born on of 23.09.2009). Sajan is also supporting his parents staying in their own house at Surat to whom he sends Rs. 10,000 p.m. His monthly house hold expenses are Rs. 30000 p.m. (excludes his investments, payment of premia and EMIs). Sajan normally gets 5% increase in his gross salary year-on-year in the beginning of every financial year, apart from bonus. The effect for this year is yet to take place, though he has received a bonus of Rs. 3,31,680 for the year 2009-10. He has taken a family floater policy for health insurance involving an annual premium of Rs. 16268 and a total cover of Rs. 15 lakh.
Current Assets & Liabilities of the Family (As on 31st March, 2010 unless otherwise specified in foot notes)
____________
1.Purchased on 25th October, 2006, annual premium paid Rs. 14,798
2.Purchased on Mark’s 2nd birthday for a term of 15 years; annual premium Rs. 41,374
3.Subscribed on 01.09.2008 @ 10% p.a., with interest credited quarterly to his savings account; renewed at same rate for one year on 01.09.2009 without penal provision for premature withdrawal
4.Home loan of Rs. 17 lakh taken on 1st November, 2004 at a fixed interest of 7.5% p.a. for a 15 year term.
5.Car loan of Rs. 4.50 lakh taken on 1st April, 2008 at a fixed interest of 11.25% p.a. for a 4-year term.
Goals:
1.To provide for higher education of Mark and Stephanie. Initial expenses at their respective age of 18 years, Rs. 3 lakh (current cost), and subsequently Rs. 2 lakh p.a. for the next two years, and Rs. 3.5 lakh p.a. for the following 2 years.
2.Marriage expenses of Rs. 15 lakh (current cost) for each child at their respective age of 27 years.
3.Retirement corpus at the age of 58 years to sustain 70% of pre-retirement household expenses till his lifetime and 50% till stephanie’s expected life.
4.A Bigger house valued at Rs. 50 lakh today, a year from now.
5.To build a separate fund for vacation expenses of Rs. 2 lakh (at current cost) every year 10 years from now so that the corpus so built is self-sustaining till the marriage of Stephanie.
Assumptions:
Regarding long-term pre-tax returns on various asset classes:
Regarding economic factors:
Section A (1 Mark)
A loan where the borrower pays interest each period, and repays some or all of the principal of the loan over time is called a(n) _________ loan.
Section A (1 Mark)
An individual is said to be a resident in India in the previous year (in which the Feb month has 29 days) if he is in India in that year for a period of ______days or more.
Section A (1 Mark)
Tarun has Rs. 100000/- in a account and starts investing Rs. 7500/-per month at the beginning of the month. If the account pays 10% p.a interest compounded half yearly. What will be the accumulated amount in his account after 20 years.
Section C (4 Mark)
NCH Corporation, which markets cleaning chemicals, insecticides and other products, paid dividends of Rs2.00 per share in 1993 on earnings of Rs4.00 per share. The book value of equity per share was Rs40.00, and earnings are expected to grow 6% a year in the long term. The stock has a beta of 0.85, and sells for Rs60 per share. (The treasury bond rate is 7%.)
Based upon these inputs, estimate the price/book value ratio for NCH and How much would the return on equity have to increase to justify the price/book value ratio at which NCH sells for currently?
Section B (2 Mark)
Mahesh wants to sell a property for Rs. 30 lakhs. He is earning rent from tenant Rs. 3,60,000. He is spending following amounts annually on that property.
Based on the above information what should be the value of the property would be:
Section A (1 Mark)
_____________seek to explain people's preferences in relation to consumption and saving over the course of their life.
Section A (1 Mark)
One aspect of the tax considerations in asset allocation is that
Section C (4 Mark)
Suppose Nifty is at 4500 in May. An investor, Mr. A, executes a Short Strangle by selling a Rs. 4300 Nifty Put for a premium of Rs. 23 and a Rs. 4700 Nifty Call for Rs 43.
What would be the Net Payoff of the Strategy?
• If Nifty closes at 3735
• If Nifty closes at 5265
Section C (4 Mark)
A share pays nil dividend and its current market price is Rs.100. The possible selling prices at the end of a year and the probabilities are:
What is the expected rate of return at the end of the year?
Section B (2 Mark)
Fiscal policy generally has a _______ direct impact than monetary policy on the economy, and the formulation and implementation of fiscal policy is ______ than that of monetary policy.
Section C (4 Mark)
Vikas has an investment portfolio of Rs.100000, and a multiplier of 2. The initial portfolio mix is Rs. 50000 in stocks and Rs. 50000 in bonds. If stock market goes up by 20%, what should Vikas do under the constant mix policy?
Section B (2 Mark)
Which of the following is an inferential data (i.e. data which may not be correctly obtained by simply asking a direct question)?
Section A (1 Mark)
_______________ is defined as the total amount of taxes paid as a percentage of a person's income.
Section A (1 Mark)
Which of the following services are related to the field of Real Estate?
Section B (2 Mark)
For calculation of liability of payment of gratuity to an employee on leaving service, the wage to be taken into account is
Section A (1 Mark)
The risk that occurs when the index used for determination of interest earned on the CDO trust collateral is different from the index used to calculate the interest to be paid on the CDO trust is known as______________.
Section A (1 Mark)
Which of the following is allowed as deduction from net annual value of a property?
Section A (1 Mark)
_________________ is a method to evaluate a large volume of consumer loans quickly with minimum labor. This method is a statistical model which predicts whether the consumer will repay the loan or not.
Section A (1 Mark)
A general theoretical perspective in social psychology concerned with the issue of social perception. is known as_____________
Section A (1 Mark)
After originally investing Rs10,000 and selling your investment for Rs 12,000, you reinvest the total amount and tell yourself that you will not be concerned if you lose Rs 2,000 in this new investment. You are likely demonstrating which type of judgment error?
Section A (1 Mark)
The length of the insurance industry’s business cycle is shortened because of
Section A (1 Mark)
____________means that people resist inequitable outcomes; i.e., they are willing to give up some material payoff to move in the direction of more equitable outcomes.
Section A (1 Mark)
The core of the_________________ is that even though stocks appear to be an attractive asset – they have high average returns and a low covariance with consumption growth – investors appear very unwilling to hold them.
Section B (2 Mark)
How much interest is paid in total on a 3-year loan for Rs27 400? The interest rate is 8.6% compounded monthly and the payments are monthly?
Section B (2 Mark)
Customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance best describes by which of the following?
Section B (2 Mark)
In a wealth management Platform which of the following is/are the functions of Middle/Back Office – Advisor
Section C (4 Mark)
Read the senario and answer to the question.
Nimita had invested Rs. 3 lakh on 2nd May 2004 in an Equity MF when the NAV was Rs. 12.58 per unit she opted for divided payout option and received dividends paid by the scheme at 12% each on 18th Aug 2004, 20th Nov 2005, 15th Apr 2007 and on 16th Jun 2008, the dividend cum NAV per unit was Rs. 12.95, Rs. 13.05, Rs. 13.99, and Rs. 14.68 and the latest NAV of the fund is Rs. 16.68 per unit. Nimita wants to know the rate of return she got on this investment. The same is ________. (Please ignore charges and taxes if applicable)
Section A (1 Mark)
The effect on a bond portfolio’s value of a decrease in yield would be most accurately estimated by using:
Section A (1 Mark)
The concept of designing marketing communication programs that coordinate all promotional activities to provide a consistent message across all audiences is called
Section A (1 Mark)
Mansi has deposited Rs. 7,00,000/- in a bank today @ ROI of 10 % per annum compounded monthly. She wants to know that if she withdraws this money in monthly installments at the END of the month for 7 years, then how much will be the each installment amount?
Section C (4 Mark)
Mr. XYZ sells a Nifty Put option with a strike price of Rs. 4000 at a premium of Rs. 21.45 and buys a further OTM Nifty Put option with a strike price Rs. 3800 at a premium of Rs. 3.00 when the current Nifty is at 4191.10, with both options expiring on 31st July.
What would be the Net Payoff of the Strategy?
• If Nifty closes at 3287
• If Nifty closes at 4925
Section C (4 Mark)
In 2011-12, Lily (who is resident and ordinarily resident in the UK for the year) earns a gross salary from her UK employment of £45,000. PAYE (Pay as you Earn)of £7,600 is deducted from this income.
She owns a holiday home in France and receives rents of £2,250 for the year. This is the net figure after withholding tax of 25% has been deducted.
Her income tax payable for the year is:
Section A (1 Mark)
____________ may be responsible for the prevalence of active versus passive investments management.
Section A (1 Mark)
A(n) _____________ is an assurance that investors will be repaid in the event of the default of the underlying loans in a securitization. These can be internal or external to the securitization process and lower the risk of the securities.
Section B (2 Mark)
You have been asked to estimate the market value of an apartment complex that is producing annual net operating income of Rs44,500. Four highly similar and competitive apartment properties within two blocks of the subject property have sold in the past three months. All four offer essentially the same amenities and services as the subject. All were open-market transactions with similar terms of sale. All were financed with 30-year fixed-rate mortgages using 70 percent debt and 30 percent equity. The sale prices and estimated first-year net operating incomes were as follows:
What is the indicated value of the property using direct capitalization?
Section B (2 Mark)
Calculate the value at which an office building can be priced from the following information:
A similar building has 8% capitalization rates.
Section C (4 Mark)
You purchased a call option for Rs3.45 seventeen days ago. The call has a strike price of Rs45 and the stock is now trading for Rs51. If you exercise the call today, what will be your holding period return? If you do not exercise the call today and it expires, what will be your holding period return?
Section B (2 Mark)
Which of the following two outcomes is an example of Loss Aversion Bias:
Section C (4 Mark)
The assumptions concerning the shape of utility functions of investors differ between conventional theory and prospect theory. Conventional theory assumes that utility functions are __________ whereas prospect theory assumes that utility functions are __________.
Section C (4 Mark)
Suppose Gaurav, an investor, is looking to add to his portfolio and hears about a potential investment through a friend, Hitesh, at a local coffee shop. The conversation goes something like this:
GAURAV: Hi, Hitesh. My portfolio is really suffering right now. I could use a good long-term investment. Any ideas?
HITESH: Well, Gaurav, did you hear about the new IPO [initial public offering] pharmaceutical company called Pharma Growth (PG) that came out last week? PG is a hot new company that should be a great investment. Its president and CEO was a mover and shaker at an Internet company that did great during the tech boom, and she has Pharma Growth growing by leaps and bounds.
GAURAV: No, I didn’t hear about it. Tell me more.
HITESH: Well, the company markets a generic drug sold over the Internet for people with a stomach condition that millions of people have. PG offers online advice on digestion and stomach health, and several Wall Street firms have issued “buy” ratings on the stock.
GAURAV: Wow, sounds like a great investment!
HITESH: Well, I bought some. I think it could do great.
GAURAV: I’ll buy some, too.
Gaurav proceeds to pull out his cell phone, call his broker, and place an order for 100 shares of PG.
Which of the following biases have been exhibited by Gaurav?
Section C (4 Mark)
Mr. XYZ buys a Nifty Call with a Strike price Rs. 4100 at a premium of Rs. 170.45 and he sells a Nifty Call option with a strike price Rs. 4400 at a premium of Rs. 35.40.
What would be the Net Payoff of the Strategy?
• if Nifty closes at 4200
• if Nifty closes at 5447
Section C (4 Mark)
Read the senario and answer to the question.
Ms. Deepika is interested in investments in foreign markets. Her brother is working in one of reputed American company in India and that is offering him some shares under ESOP scheme. This company is not listed in India. It is listed in New York Stock Exchange. Ms. Deepika is asking her manager how this transaction will took place for her brother?
Section A (1 Mark)
In case of non-resident, who is carrying on shipping business, his Indian income shall be presumed to be:
Section C (4 Mark)
The required rate of return on an investment is 12%, you estimate that a firm X’s dividend will grow as follows:
For the subsequent years you expect the dividend to grow at the more modest rate of 7% annually. What is the maximum price that you should pay for this stock?
Section B (2 Mark)
Mr. Manish purchased a residential house for Rs.3 lakh on 1-4-1972. Its market value on 1-4-1981 was, however, Rs.12 lakh. He sells the house during the financial year 2011-12 for Rs.98 lakh. Calculate the taxable long term capital gain.[CII-12-13: 852,11-12: 785,10-11:711]
Section B (2 Mark)
In the year to 31 March 2012, a UK resident company made a UK trading profit of £800,000 and received net overseas income of £26,000 (net of 20% withholding tax). These were the company's only sources of income. The company also paid a qualifying charitable donation of £5,000.
For double tax relief purposes, the charitable donation will be allocated as a deduction from the company's overseas income. True or False?
Section A (1 Mark)
Mr.Gopal is working in a reputed company and earning Rs. 3,00,000/- p.a. and is now 48 years old. He has invested Rs. 3,00,000/- in an annuity which will pay him after 5 years a certain amount p.m. at the end of every month for 10 years. Rate of interest is 8% p.a. Calculate how much he will receive at the end of every month after 5 years?
Section A (1 Mark)
In whose total income, the income of a minor child is included –
Section B (2 Mark)
Mr. Gupta has got his stock insured against fire for Rs5,00,000/- ,during the year he lost the stock in his ware house for Rs. 4,00,000/-. The surveyor from insurance company gave his report that at the time of fire the stock in the ware house had value 6,00,000/-
Calculate what amount Mr. Gupta will receive from the insurance company.
Section B (2 Mark)
R acquired shares of G Ltd, on 15/12/1998 for Rs. 5 lakh which were sold on 15/5/2011 for Rs. 18.50 lakh. Expenses of transfer were Rs. 20,000/-. He invests Rs. 6 lakh in the bonds of NHAI on 16/10/2011. Compute the capital gain for the assessment year 2012-13.
Section B (2 Mark)
Mr. X gives Rs. 200000 to Mrs. X as gift. She invests in a proprietary concern and incurs a loss of Rs. 40000.
Section A (1 Mark)
_______________ and _______________ mandates are two kinds of service level contracts
Section A (1 Mark)
_________________ is the most important source of revenue for states in US.
Section B (2 Mark)
As per Double Taxation Avoidance Agreement, the Technical Fees in UAE is charged at:
Section A (1 Mark)
To ensure compliance under this method of lending, the current ratio of the concern should not be less that _________
Section A (1 Mark)
Which among the following is not an advantage of setting up a trust?
Section C (4 Mark)
A 14% semiannual-pay coupon bond has six years to maturity. The bond is currently trading at par. Using a 25 basis point change in yield, the effective duration of the bond is closest to:
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 C (4 Mark)
Read the senario and answer to the question.
What amount he would have piled up at the end of the 20 years if it earns 8.5% compounded interest and discontinues making deposits after 9th deposit?
Section B (2 Mark)
How much total principal is repaid between the 1st and 17th payment interval of a 4.5-year loan for Rs 4567 at an interest rate of 7.44% compounded monthly. The payments are also monthly.
Section A (1 Mark)
______________are bonds issued by governments that pledge their "full faith and credit," including tax revenues, to repayment in US.
Section A (1 Mark)
A ____________________ tax system places a relatively large tax burden on upper-income people and a relatively small tax burden on lower-income people.
Section C (4 Mark)
OHM Corporation, an environmental service provider, had revenues of Rs209 million in 1992 and reported losses of Rs3.1 million. It had earnings before interest and taxes of Rs12.5 million in 1992, and had debt outstanding of Rs109 million (in market value terms). There are 15.9 million shares outstanding, trading at Rs11 per share. The pre-tax interest rate on debt owed by the firm is 8.5%, and the stock has a beta of 1.15. The firm's EBIT is expected to increase 10% a year from 1993 to 1996, after which the growth rate is expected to drop to 4% in the long term. Capital expenditures will be offset by depreciation, and working capital needs are negligible. (The corporate tax rate is 40%, and the Risk free rate is 7%.)
Estimate the value of the firm.
Section C (4 Mark)
Azhar deposits Rs. 12,500 in an account that pays a ROI of 20% p.a compounded annually on 5th. Of March 2010. Calculate the date on which the balance in his account would be Rs.35,338/-
Section A (1 Mark)
----------- shifts the weights of securities in the portfolio to take advantage of areas that are expected to do relatively better than other areas.
Section C (4 Mark)
Yogesh Jain is a Chartered Accountant by profession and a very disciplined investor he has started investing from today in an account Rs. 1,00,000 every year (beginning of year) and plans to increase his contribution by 10% every year. If the ROI he gets is 15% per annum compounded half yearly calculate the corpus he would be able to accumulate in 25 years.
Section C (4 Mark)
Belstate reported net income of Rs221 million in 1993 on revenues of Rs8298 million. It paid out 31% of its earnings as dividends, a payout ratio that is expected to remain level from 1994 to 1998, during which period earnings growth is expected to be 13.5%. After 1998, earnings growth is expected to decline to 6%, and the dividend payout ratio is expected to increase to 60%. The beta is 1.15 and this figure is expected to remain unchanged. The treasury bill rate is 7%.
Estimate the price/sales ratio for Walgreens, assuming its profit margin remains unchanged at 1993 levels.
Section B (2 Mark)
A hedge fund manager purchases 10 convertible bonds with a par value of $1,000, a coupon of 7.5%, and a market price of $900. The conversion ratio for the bonds is 20. The conversion ratio is based on the current price of the underlying stock, $45, and the current price of the convertible bond. The delta, or hedge ratio, for the bonds is 0.4.
Therefore, to hedge the equity exposure in the convertible bond, the hedge fund manager must short the following shares of underlying stock:
Section B (2 Mark)
Which of the following statements is/are correct with respect to Mental Accounting?
Section B (2 Mark)
Calculate the value at which an office building can be priced from the following information:
A similar building has 8% capitalization rate.
Section C (4 Mark)
Dinex Ltd, a leader in the development and manufacture of electronic devices, reported earnings per share of Rs 2.02 in 2003, and paid no dividends. These earnings are expected to grow 14% a year for five years (2004 to 2008) and 7% a year after that. The firm reported depreciation of Rs 2 million in 2003 and capital spending of Rs 4.20 million, and had 7 million shares outstanding. The working capital is expected to remain at 50% of revenues, which were Rs 106 million in 2003, and are expected to grow 6% a year from 2004 to 2008 and 4% a year after that. The firm is expected to finance 10% of its capital expenditures and working capital needs with debt. Dinex Ltd had a beta of 1.20 in 2003, and this beta is expected to drop to 1.10 after 2008. The current risk free rate is 7%.
Estimate the value per share today, based upon the FCFE model.
Section A (1 Mark)
All of the following are assumptions made by technical analysts except:
Section A (1 Mark)
Which of the following is a challenge of making a consumer loan?
Section B (2 Mark)
If a portfolio manager has a good ability to forecast overall market but a poor ability to select undervalued securities, the following makes sense for him.
Section B (2 Mark)
How much total interest is paid between the 5th and 11th payments inclusive on a loan that has monthly payments for 2 years and an original principal of Rs47 500? The loan rate is 6.6% compounded quarterly.
Section C (4 Mark)
Mr. Sushobhan Adhikari, 56 years old, employee of Mega India Ltd, receives the following salary and perquisites from his employer during the previous year 2007–08.
A rent-free furnished house in Patna (rent of unfurnished house paid by employer- Rs. 84,000, rent of furniture Rs. 18,000, free services of a gardener (salary-Rs. 4,000), free services of cook (salary-Rs. 3,600), free services of watchman (salary-Rs. 900). He owns a small house at Patna.
Mr. Adhikari makes the following payments and investments during the year:
Mr. Adhikari comes to Mr. Gupta, CWM®, in September-2008 for developing a wealth plan to fulfill his financial goals. Mr. Adhikari will retire on 31st December, 2008 after completing 28 years of service. He is expecting a growth of Rs. 1,500 in his basic pay in the last year of his employment. The company is expecting a 5% growth every year in its turnover. His daughter Pallavi has completed her education and his main liability is the amount he may have to spend for her marriage. On his retirement he is expected to receive following amount:
He also has also informed to the planner following his other assets and investments:
He has given his Kolkata Flat on 12,500 p.m. rent. Municipal value of the property is Rs. 1,45,000, fair rent is Rs. 1,60,000 and standard rent is 1,40,000. Municipal tax paid by him are as follows:
In July, 2008 rent is increased from Rs. 11,500 to Rs. 12,500 pm with effect from 01/04/2007. Due to some dispute rent was not received in 2007–08 but all arrears of rent till date are paid on July 1, 2008. Maximum eligible amount of PPF contribution deposited in March, 2008.
His actual expenses before retirement are Rs. 23,500 per month.
Main goals of Mr. Adhikari:
●To provide for his daughter’s marriage
●Ensuring that his family is protected financially in the event of any mishap
●Minimize tax burden
●Establish an investment portfolio that gives high returns over long term
Assumptions:
●Mr. Adhikari needs to provide for himself and his family till he is 75.
●Inflation rate after retirement to be 4%
●Monthly expenses after retirement will be 15% less than before retirement
After detailed discussion, Mr. Gupta, CWM®, has suggested a revision in the portfolio as below to be implemented from October, 2008.
Section A (1 Mark)
A term that refers to the borrower's assets or net worth is called:
Section B (2 Mark)
A January month Nifty Futures contract will expire on the last _____ of January
Section B (2 Mark)
A bond has the following terms:
If you expect the bond to be called at the end of the year, what would be the maximum price you should pay for the bond if comparable yields are 7 percent?
Section B (2 Mark)
Lokesh purchased a flat on 1-4-1996 for Rs. 10,00,000/-. He sells the same flat on 1-10-2006 for Rs. 25,00,000/-.As a CWM® calculate the Indexed Cost of Acquisition on which capital gain would be calculated. (The CII of year 1995-96 is 281, for year 1996-97 is 305, for year 2005-06 is 497 and for year 2006-07 is 519).
Section A (1 Mark)
Loss of a closely held company cannot be carried and set off unless on the last day of the previous year in which the loss was incurred and as on the last day of the previous year in which such loss is set off, at least:
Section A (1 Mark)
____________ is defined as a dollar per thousand dollars of assessed value of property and is used to calculate a property owner's tax bill.
Section A (1 Mark)
The eligibility Criteria for Personal Loans Salaried Individuals for Maximum Age of Applicant at Loan Maturity in case of personal loan is:
Section A (1 Mark)
Which of the followings are the important features of Real estate Investment?
Section C (4 Mark)
Mr. XYZ is bearish about Nifty and expects it to fall. He sells a Call option with a strike price of Rs. 2600 at a premium of Rs. 154, when the current Nifty is at 2694. If the Nifty stays at 2600 or below, the Call option will not be exercised by the buyer of the Call and Mr. XYZ can retain the entire premium of Rs.154.
What would be the Net Payoff of the Strategy?
• If Nifty closes at 2900
• If Nifty closes at 2400
Section A (1 Mark)
A type of lease where there is no payment schedule and penalty for a set period of lines.
Section B (2 Mark)
Which of the following is closest to the forward price of a share price if
Dividend expected is 6%?
Section A (1 Mark)
Aditya’s father has given him general power of attorney what does this mean?
Section A (1 Mark)
The information in your credit report is primarily used by the credit bureau to compute your
Section B (2 Mark)
Dharampal has let out his house property at monthly rate of Rs. 12000. He has paid Rs.3500 as annual municipal tax. He wants to know the Net Annual value of his house at Bhuj for AY 2011-12. The Municipal value of the house is Rs. 90,000, Fair rent Rs. 1,40,000, Standard rent Rs. 1,20,000. The house was vacant for one month during the previous year 2010-11 and the rent has not changed since then.
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TESTED 26 Apr 2024
