Section C (4 Mark)
Company A is financed with 90 percent debt, whereas Company B, which has the same amount of total assets, is financed entirely with equity. Both companies have a marginal tax rate of 35 percent. Which of the following statements is most correct?
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 A (1 Mark)
Equifax Credit Report Contain
Section A (1 Mark)
Which of following is not an exclusion under a health policy?
Section A (1 Mark)
Which of the following might be used as a factor in an APT factor model?
Section A (1 Mark)
Cash Flow is a tool that is more useful for
Section A (1 Mark)
Which one of the following statements is incorrect?
Section A (1 Mark)
Income from which trust is added to the beneficiary’s taxable income?
Section C (4 Mark)
Which of the following statements is/are correct?
Section B (2 Mark)
Consider the single factor APT. Portfolio A has a beta of 0.2 and an expected return of 13%. Portfolio B has a beta of 0.4 and an expected return of 15%. The risk-free rate of return is 10%. If you wanted to take advantage of an arbitrage opportunity, you should take a short position in portfolio _________ and a long position in portfolio _________.
Section B (2 Mark)
Which of the following are the objectives of National Housing Bank in Indian Real Estate Market?
Section A (1 Mark)
An Agreement between the tenant and the landlord for the right to use the property for a specified period of time is known as ____________.
Section B (2 Mark)
The breakdown of commodity future returns over the past 30 days for 2 upcoming oil future contracts is given below:
What is the roll return for the period 15th September to 15th October for the contracts maturing in November and February?
Section A (1 Mark)
What amount needs to be invested today at 10 % per annum, so that it pays Rs. 1 lac per annum for 5 years, starting from 6th year to 10thyear. First payment starts at BEGIN of 6thyear.?
Section A (1 Mark)
Which of the following statement is/are true?
Section C (4 Mark)
Tom dies in January of the current year and leaves his wife Jeanne a $50,000 insurance policy. Jeanne elects to receive the proceeds at $10,000 per year plus interest, for five years. In the current year, she receives $12,000 ($10,000 plus $2,000 interest).
How much must Jeanne include in her gross income?
Section C (4 Mark)
Read the senario and answer to the question.
One commonly used method of calculating the total retirement fund necessary on the first day of retirement is to use the present value of an annuity due. The Pandeys’ anticipate that their annual retirement income will need to increase each year at the rate of inflation. Based on the following assumption, calculate the total amount needed to be in place when Shanker and Parvati retire (Round to the nearest Rs. 1000)
Section C (4 Mark)
You know the following concerning a common stock:
If you want to earn 10 percent, should you buy this stock? What is the maximum price you should be willing to pay for the stock?
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 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)
________________ is the most important source of revenue for local governments in US
Section A (1 Mark)
All the following real estate investors will acquire an income property except those who invest in
Section B (2 Mark)
Reliable ltd. has current earnings per share of Rs. 5. Assume a dividend – payout ratio of 50 percent. Earnings grow at a rate of 9 percent per year. If the required rate of return is 14 percent, what is its current value?
Section A (1 Mark)
According to Prospect Theory, investors are more concerned with changes in wealth than in returns. Prospect Theory suggests that investors:
Section A (1 Mark)
Which of the following is true regarding credit card loans?
Section A (1 Mark)
A good wealth management plan must include an analysis of all of the following EXCEPT
Section C (4 Mark)
Read the senario and answer to the question.
Mr. Bhatia owns a Maruti Wagonr with a monthly EMI of Rs. 6,312. The above loan will be completely repaid by August 2008. Mr. Bhatia planning to purchase a new car worth of Rs. 15 lakh. For this he has to take a full value loan of the car with 9% interest for 5 years. But his present car is in good condition and life of this car is approximately another 5 years repairs and maintenance cost are minimum. If he postpones his car purchasing plan now and deposit the same EMI outflow required for new car into an SIP with a minimum 15% yield for the next five years, then calculate the fund he can accumulate?
Section A (1 Mark)
A financial contract that obligates one party to exchange a set of payments it owns for another set of payments owned by another party is called a
Section A (1 Mark)
First step in developing a Wealth Management Plan is
Section A (1 Mark)
Mr. Murli is 55 years old at present. He has invested some amount in an annuity which will pay him begining of the 5th year Rs. 30,000/- p.a. at the beginning of every year for 10 years. Rate of interest is 7% p.a. Calculate how much amount he has invested now?
Section B (2 Mark)
Why tilting your portfolio towards growth stocks, may theoretically amplify its performance?
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 A (1 Mark)
With regard to hedge funds, ‘2 and 20’ is best explained as:
Section A (1 Mark)
____________is the reasonably probable and legal use of vacant land or an improved property that is physically possible, legally permissible, appropriately supported, financially feasible, and that results in the highest value.
Section A (1 Mark)
How many types of power of attorney are there?
Section B (2 Mark)
The arbitrage pricing theory (APT) and the CAPM both assume all except which of the following?
Section B (2 Mark)
Ram born in 1950 has a life expectancy at birth of 65 years. Sita his wife born in 1955 has a life expectancy at birth of 70 years. Assuming that the life expectancies have not changed. Ram is planning to buy an annuity to be paid to him or his wife till anyone of them is alive. Assuming Ram will retire on attaining age 58 i.e. in 2008, what should be the time period of the annuity?
Section C (4 Mark)
Which of the following would you consider the best indicator of an undervalued firm?
Section A (1 Mark)
Gift received is not taxable in hands of
Section B (2 Mark)
Jaipur Golden Railroad reported net income of Rs770 million in 1993, after interest expenses of Rs. 320 million. (The corporate tax rate was 36%.) It reported depreciation of Rs.960 million in that year, and capital spending was Rs1.2 billion. The firm also had Rs. 4 billion in debt outstanding on the books, rated AA (carrying a yield to maturity of 8%), trading at par (up from Rs3.8 billion at the end of 1992). The beta of the stock is 1.05, and there were 200 million shares outstanding (trading at Rs 60 per share), with a book value of Rs5 billion. Jaipur Golden paid 40% of its earnings as dividends and working capital requirements are negligible. (The treasury Bill rate is 7%.)
Estimate the free cash flow to the firm in 1993.
Section B (2 Mark)
An asset may be purchased for Rs 10,00,000. It is expected to generate Rs 10,000 annual income for 10 years after which it is expected to sell for Rs. 1,20,000. What is the rate of return expected from this investment?
Section B (2 Mark)
Mr. Aggarwal is working in a reputed company and earning Rs. 4,50,000/- p.a. and is now 55 years old. He has invested Rs. 2,00,000/- in an annuity which will pay him after 5 years a certain amount p.a. at the beginning of every year for 10 years. Rate of interest is 8% p.a. Calculate how much he will receive at the beginning of every year after 5 years?
Section A (1 Mark)
A(n)______________________ loan is a short- or medium-term loan repayable in two or more consecutive payments, usually monthly or quarterly.
Section A (1 Mark)
According to Michael Porter, there are five determinants of competition. An example of _____ is when new entrants to an industry our pressure on prices and profits.
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)
Which of the following statements with respect to International Taxation Structure is/are correct?
Section A (1 Mark)
As per presumptive income scheme under section 44AE, the presumed income shall be:
Section B (2 Mark)
Behavioral finance argues that ____________.
Section A (1 Mark)
How can complaints provide the firm with great value?
Section C (4 Mark)
Mr. Vinay, aged 36 years is working in a company, at a managerial level, and has an income of Rs. 40,000 p.m. comprising of Basic salary and DA as on 31/03/2008. His other allowances amount to Rs. 18,000 p.m. He would retire at the age of 60 years. His wife Reena, aged 32 years, is working in a High School and has a post-tax income of Rs. 2,76,000 per annum. Mr. and Mrs. Vinay have two daughter Deepika, aged 10 years and Rekha, aged 5 years.
Mr. Vinay’s father died of heart attack, 5 months back, at the age of 72 years, leaving a house (Value as on date Rs. 30 lakh) in which Vinay is staying at present and other assets worth Rs. 20 lakh (shares of large cap companies worth Rs. 10 lakh, Fixed deposit in post office of Rs. 5 lakh and Bank FD of Rs. 5 lakh) in Vinay’s mother’s name. His mother 63 years old is disabled and fully dependent on Vinay, he being the only child of his parents. Vinay has to keep an attendant for his mother, round the clock.
The Assets of the Couple are:
1.Cash in HandRs. 18,000
2.Bank balanceRs. 40,000 (Vinay) Rs. 25,000 (Reena)
3.JewelleryRs. 400000 (Reena)
4.Money Market Mutual FundRs. 3,00,000 (Vinay)
5.Shares
?ICICI Bank 200 shares bought at Rs. 1000 per share,
?Infosys 150 shares bought at Rs. 1700 per share
?Reliance Communication 350 shares bought at Rs. 350 share.
6.Debt oriented mutual FundsRs. 2,00,000
7.PPFRs. 5,00,000 (Vinay), Rs. 4,00,000 (Reena)
8.House in the joint name of Vinay and Reena with 50% ownership of each. This house has two floors and is let out for Rs. 9,000 pm for each of the floors. Present value of this house is Rs. 60,00,000.
Vinay and Reena had taken a housing loan of Rs. 15,00,000 each. Of this Rs. 10,00,000 is pending on each name. They are presently paying an EMI of Rs. 20,000 each, Rate of interest being 10.75% p.a.
The Retirement Benefits of Vinay after 15 years hence, are expected to be as follows:
Vinay has taken a term insurance of Rs. 30 lakh for 20 years, which is expiring 5 years from now. He has no other insurance. Vinay’s monthly household/ living expenses are Rs. 50,000. This excludes EMI on loans but includes all other expenses including expenses on his mother’s care.
Vinay expects Deepika to get married 12 years hence for which likely expenditures in today’s term is 15 lakh.
Vinay’s salary is likely to grow at 7% pa and Reena’s salary is likely to grow at 6% p.a. Risk free rate of interest is 8% pa and inflation is 6% p.a. Long term growth on Equity/Equity based MF is taken as 15% p.a.
