Duration 2 hours 60 Marks
Note: Q1 is compulsory.
Q1) (A) Choose the right answer with reasons 10 Marks
(1)A market which deals in securities that have been already issued by companies is called as
(a) Primary Market
(b) Money Market
(c ) Secondary Markets
(d) Forward Market
(2) Which of the following is a money market security?
(a) Debentures
(b) Mutual Funds
(c ) Commercial Paper
(d) Gold and Silver
(3)The fundamental analysis (investment) approach has been associated with ____________
(a) Uncertainties
(b) Certainties
(c) Ratios
(d) Balance Sheet
(4) The object of portfolio is to reduce_______________ diversification
(a) Return
(b) Risk
(c) Uncertainty
(d) Percentage
(5) Trading in electronic form is known as ____________ trading
(a) Online
(b) Scriptless
(c ) Budla
(d) Margin
Q1) (B) True or False 5 Marks
-
Investment decisions which are not carefully thought out are costly
-
Risk is less when return is high and it is more when return is low
-
A financial service is any kind of service offered by a financial service provider
-
Debentures and Bonds are debt instruments
-
Every investment has some risk
Q2) (A) Mr. Rajesh, a Fund Manager produced the following returns for the last 5 yrs. Rates of return on Sensex are also given for comparison: 8 Marks
|
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08 |
|
|
Mr. Rajesh |
6% |
48% |
-15% |
7% |
11% |
|
Sensex |
12% |
40% |
-6% |
20% |
3% |
Calculate the average return and standard deviation of Mr. Rajesh’s Mutual Fund. Did he do better or worse than Sensex by these measures?
Q2) (B) Compare the expected return and Risk of an investment in the following security. 7 Marks
|
Economic Condition |
Probability (p) |
Return on Investment (%) |
|
Boom |
0.275 |
+40% |
|
Stagnation |
0.450 |
+20% |
|
Depression |
0.275 |
-10% |
Or
Q2) (A) What is credit Rating? What is its need? 8 Marks
(B) Short Notes: 7 Marks
(i) Primary Market
(ii) Elements of investment
Q3) (A) Triveni Industries Ltd. gives you the following information for the year ended 31st March 2008: 10 Marks
|
Profit before interest and taxes |
Rs. 16,50,000 |
|
Tax Rate |
30% |
|
Proposed Equity Dividend |
25% |
|
Capital Employed |
|
|
10% Preference Share Capital |
Rs. 15,00,000 |
|
80000 Equity Shares of Rs. 10 each |
Rs. 8,00,000 |
|
15% Debentures of Rs 100 each |
Rs. 7,00,000 |
|
Reserve and Surplus |
Rs. 12,00,000 |
|
Current Market Price per Equity Share |
Rs. 50 |
You are required to calculate:
-
Earning Per Share
-
Price Earning Ratio
-
Dividend Payout Ratio
-
Dividend Yield
-
Book Value per share and state whether it is worth investing in the Equity Shares of the Company
Q3) (B) 5 Marks
A GOI bond of Rs. 1000 each has a coupon rate of 8 % per annum and maturity period Is 20 yrs. If the current market price is Rs. 1050, find YTM
Or
Q3) (A) What is Fundamental Analysis? 8 Marks
How is it different from technical Analysis?
(B) Types of Risk 7 Marks
Q4) (A) The Capital of T Ltd. is as under: 8 Marks
|
80,000 Equity shares of Rs. 10 each |
Rs. 8,00,000 |
|
30,000 9% Preference shares of Rs. 10 each |
Rs. 3,00,000 |
|
Total |
Rs. 11,00,000 |
The Following information has been obtained from the books of the company:
|
Profit after tax (at 60%) |
Rs. 2,70,000 |
|
Depreciation |
Rs. 60,000 |
|
Equity Dividend Paid |
20% |
Market Price of equity shares is Rs 40 per share. Calculate the following ratios and state whether it is profitable for investment
-
Dividend per share
-
Dividend yield ratio
-
Earning per share
-
Earning yield ratio
-
Price earning ratio
-
Dividend cover separately for preference and equity
Q4) (B) 7 Marks
Face Value = Rs 1000
Interest Rate = 8% p.a
Maturity Period = 6 yrs
Market Price = Rs 750
YTM if Interest payment is made semi-annually
Or
Q4) (A) What are tax saving investments? What are their benefits? 8 Marks
(B) What is difference between investor & speculator? 7 Marks
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