Section C (4 Mark)
Read the senario and answer to the question.
Jogen commuted his 40% of pension in April, 2008 with Rs. 2,15,000.What would be the taxable amount on commuted pension received by Jogen, if he would retire from a private organization?

A. Rs. 1,07,500

B. Rs. 35,833

C. Rs. 1,70,167

D. Rs. Nil

Section B (2 Mark)
A bank is concerned about excess volatility in its cash flows from some recent business loans it has made. Many of these loans have a fixed rate of interest and the bank's economics department has forecast a sharp increase in interest rates. The bank wants more stable cash flows. Which type of credit derivative contract would you most recommend for this situation?

A. Credit linked note

B. Credit option

C. Credit risk option

D. Total return swap

Section A (1 Mark)
Securities with betas less than 1 should have:

A. Expected returns higher than the market.

B. Required returns higher than the market return.

C. Required returns lower than the market return.

D. No systematic risk.

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.

A. Rs. 23,95,500

B. Rs. 23,00,000

C. Rs. 24,13,500

D. Rs. 22,12,000

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?

A. 173.9%, -100%

B. 73.9%, -100%

C. 57.5%, -173.9%

D. 73.9%, -57.5%

Section A (1 Mark)
If a testator makes a will ‘to induce another person to make him comply with his (testators) wish’ but does not have any testamentary operation or intention, then this will is called as

A. Concurrent will

B. Sham will

C. Disguise will

D. Duplicate will

Section A (1 Mark)
Mr. Vikas is now 50 years old. He has invested some amount in an annuity which will pay him from the END. of 5th year Rs. 35,000/- p.a. at the end of every year for 10 years. Rate of interest is 7% p.a. Calculate how much he has invested now?

A. 185270.07

B. 175270.07

C. 175870.07

D. 135270.07

Section A (1 Mark)
How many states operate lotteries to generate revenue in US?

A. 39

B. 40

C. 48

D. All 50 states operate lotteries to generate revenue.

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.

A. 6597345.23

B. 5593465.19

C. 5923472.45

D. 6623456.23

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?

A. Rs 1567 and 2162 respectively

B. Rs 191 and 3576 respectively

C. Rs 313 and 3450 respectively

D. Rs 372 and 3295 respectively

Section A (1 Mark)
Multi period hedging is ________

A. A way to manage qualitative risk over time

B. A way to manage market risk over time

C. A way to manage sentimental risk over time

D. None of the above

Section A (1 Mark)
Which of the following measures is lowest for a currently callable bond?

A. Macaulay duration

B. Effective duration

C. Modified duration

D. None of the Above