- Joined
- 2/11/09
- Messages
- 2
- Points
- 11
1) An investor invested in Security A & B. If the price at the beginning of the year was Rs.50 & Rs. 60 respectively; dividend received during the year is Rs.1.5 and Rs. 2.5 respectively; and the price at the end of the year is Rs. 56 and Rs. 58 respectively, then what is the rate of return earned on this investment, if his portfolio composition in the beginning of the year was 60% of A and 40% of B. (2 marks).
(Hint: Portfolio Return = Weighted Average Return of assets in portfolio).
A. 8.33
B. 15.0
C. 15.83
D. 9.33
2. A zero coupon bond trading today at Rs. 2500 promises to pay Rs. 100000 after 25 years. What is the annual rate is return you will earn by investing in this bond and holding till maturity. (2 marks)
(Hint: Calculate the annual interest rate which will help grow Rs. 2500 to Rs. 100000 in 25 years.)
A. 15.89
B. 16.89
C. 15.79
D. 15.69
3. A company announces bonus of Rs. 100000 per employee but due to current recessionary scenario company proposed following choices to its employees.
I. Take full Bonus amount Rs. 100000 in two installments Rs. 50000 after 6 months and Rs. 50000 after 1 year from now.
II. Take 75% of the Present Value of Rs. 100000 today.
What is the amount of payout if one opted for option II (prevailing interest rate is 8% per annum).
(Hint: Calculate Present value of Rs. 100000 receivable in two installments)
A. Rs. 70806.61
B. Rs. 68444.44
C. Rs. 69444.44
D. Rs. 75000.00
4. Surya is supposed to receive Rs. 100000 from Jitender after 1 years and Jitender promised to pay 8% interest on this loan (Rs. 100000 is including the interest amount).
Surya is also supposed to pay Rs. 150000 to Satyadip after 2 years and Surya agreed to pay 10% interest to Satyadip (Rs. 150000 is including the interest amount).
Finally Jitender is supposed to receive Rs. 125000 from Satyadip after 3 years and Satyadip agreed to pay 10% interest to Jitender (Rs. 125000 is including the interest amount).
If Surya, Jitender and Satyadip together agreed to settle their positions today. Which of the following is true? (3 marks)
(Hint: Calculate Present Value with signs (payable/receivable) of all cash flows for Surya, Satyadip and Jitender today and then do netting).
A. Surya receives 31374.35, Jitender pays 1321.76 and Satyadip pays 30052.59.
B. Surya pays 31374.35; Jitender pays 1321.76 and Satyadip receives 32696.11
C. Surya pays 31374.35; Jitender receives 1321.76 and Satyadip receives 30052.59
D. Satyadip pays 30052.59; Jitender receives 1321.76 and Satyadip receives 28730.83
5 An investor decided to deposit Rs. 10000 in a bank annually for 10 years. She made her first investment on 31st Dec, 2000, Second investment on 31st Dec, 2001, Third investment on 31st Dec 2002 and so on for 10 years. If the bank promises to pay 10% interest on first 3 deposits, 11% on next 5 deposits and 12% on last 2 deposits. What is the amount investor will get from bank if she withdraws her investment from bank on 1st January 2010. (3 marks).
A. 179870.10
B. 162435.30
C. 172541.30
D. 185264.50
(Hint: Portfolio Return = Weighted Average Return of assets in portfolio).
A. 8.33
B. 15.0
C. 15.83
D. 9.33
2. A zero coupon bond trading today at Rs. 2500 promises to pay Rs. 100000 after 25 years. What is the annual rate is return you will earn by investing in this bond and holding till maturity. (2 marks)
(Hint: Calculate the annual interest rate which will help grow Rs. 2500 to Rs. 100000 in 25 years.)
A. 15.89
B. 16.89
C. 15.79
D. 15.69
3. A company announces bonus of Rs. 100000 per employee but due to current recessionary scenario company proposed following choices to its employees.
I. Take full Bonus amount Rs. 100000 in two installments Rs. 50000 after 6 months and Rs. 50000 after 1 year from now.
II. Take 75% of the Present Value of Rs. 100000 today.
What is the amount of payout if one opted for option II (prevailing interest rate is 8% per annum).
(Hint: Calculate Present value of Rs. 100000 receivable in two installments)
A. Rs. 70806.61
B. Rs. 68444.44
C. Rs. 69444.44
D. Rs. 75000.00
4. Surya is supposed to receive Rs. 100000 from Jitender after 1 years and Jitender promised to pay 8% interest on this loan (Rs. 100000 is including the interest amount).
Surya is also supposed to pay Rs. 150000 to Satyadip after 2 years and Surya agreed to pay 10% interest to Satyadip (Rs. 150000 is including the interest amount).
Finally Jitender is supposed to receive Rs. 125000 from Satyadip after 3 years and Satyadip agreed to pay 10% interest to Jitender (Rs. 125000 is including the interest amount).
If Surya, Jitender and Satyadip together agreed to settle their positions today. Which of the following is true? (3 marks)
(Hint: Calculate Present Value with signs (payable/receivable) of all cash flows for Surya, Satyadip and Jitender today and then do netting).
A. Surya receives 31374.35, Jitender pays 1321.76 and Satyadip pays 30052.59.
B. Surya pays 31374.35; Jitender pays 1321.76 and Satyadip receives 32696.11
C. Surya pays 31374.35; Jitender receives 1321.76 and Satyadip receives 30052.59
D. Satyadip pays 30052.59; Jitender receives 1321.76 and Satyadip receives 28730.83
5 An investor decided to deposit Rs. 10000 in a bank annually for 10 years. She made her first investment on 31st Dec, 2000, Second investment on 31st Dec, 2001, Third investment on 31st Dec 2002 and so on for 10 years. If the bank promises to pay 10% interest on first 3 deposits, 11% on next 5 deposits and 12% on last 2 deposits. What is the amount investor will get from bank if she withdraws her investment from bank on 1st January 2010. (3 marks).
A. 179870.10
B. 162435.30
C. 172541.30
D. 185264.50
