Section B (2 Mark)
A bank is about to make a Rs50 million project loan to develop a new oil field and is worried that the petroleum engineer's estimates of the yield on the field are incorrect. The bank wants to protect itself in case the developer cannot repay the loan. Which type of credit derivative contract would you most recommend for this situation?
Section B (2 Mark)
In 2011-12, George has property income of £8,000 and net bank interest of £4,000. He claims the personal allowance of £7,475. What is the income tax borne for the year?
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)
A property has 120 rooms and each room has a monthly rent of Rs.750. The occupancy rate throughout the year is 80% and maintenance expenses per year works out to be Rs.3,00,000. Capitalization rate is 12%. Calculate the value of the property.
Section B (2 Mark)
The current market price of a share of MOD stock is Rs15. If a put option on this stock has a strike price of Rs20, the put
Section B (2 Mark)
How much loan can be given from PPF account in the year 2006-07?
Section A (1 Mark)
By agreeing to service any assets that are packaged together in the securitization process a bank can:
Section A (1 Mark)
In order to remain competitive, non-core providers need to achieve the following:
Section B (2 Mark)
If two customers choose exactly the same package of certain service, but customer A calls for help weekly and customer B calls only twice a year, which is most valuable customer?
Section B (2 Mark)
Consider the multifactor model APT with two factors. Portfolio A has a beta of 0.75 on factor 1 and a beta of 1.25 on factor 2. The risk premiums on the factor 1 and factor 2 portfolios are 1% and 7%, respectively. The risk-free rate of return is 7%. The expected return on portfolio A is __________ if no arbitrage opportunities exist.
Section A (1 Mark)
In whose total income, the income of a minor child is included –
Section C (4 Mark)
Pizer Drugs, a large drugstore chain, had sales per share of Rs122 in 1993, on which it reported earnings per share of Rs2.45 and paid a dividend per share of Rs1.12. The company is expected to grow 6% in the long term, and has a beta of 0.90. The current Risk Free Rate is 7%.
Estimate the appropriate Price for Pizer Drug and what would the profit margin need to be to justify the price per share if the stock is currently trading for Rs34 per share, assuming the growth rate is estimated correctly,
TESTED 31 Jan 2025
