Section A (1 Mark)
A firm has a higher asset turnover ratio than the industry average, which implies

A. The firm has a higher P/E ratio than other firms in the industry.

B. The firm is more likely to avoid insolvency in the short run than other firms in the industry.

C. The firm is more profitable than other firms in the industry.

D. The firm is utilizing assets more efficiently than other firms in the industry.

Section C (4 Mark)
A trader buys three-month put options on 1 unit of gold with a strike of Rs.17000/10 gms at a premium of Rs.70. Unit of trading is 1kg. On the day of expiration, the spot price of gold is Rs.16800/10 gms. What is his net payoff?

A. (+) 13,000

B. (+) 20,000

C. (-) 13,000

D. (-) 20,000

Section B (2 Mark)
A hired a bicycle from B. The written contract contained a clause which read “Nothing in this agreement shall render the owner liable for any personal injuries to the rider of the machine hired”. Owing to a defect in the brakes of the cycle, A met with an accident and got injured. Can A recover Damages?

A. No, since a disclaimer by the owner has already been intimated

B. Yes, because he is under the duty to take care of the bicycle

C. No, because it is the rider who has to take care of the brakes

D. Any of the above

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

A. is out of the money.

B. Is in the money.

C. Can be exercised profitably

D. A and C.

Section A (1 Mark)
While matching orders for equity trading in NSE, which one of the following gets precedence over all the others?

A. Time of the order

B. Price of the order

C. Size of the order

D. Both b and c

Section B (2 Mark)
If Second National Bank has more rate-sensitive liabilities then rate-sensitive assets, it can reduce interest rate risk with a swap that requires Second National to

A. Pay fixed rate while receiving floating rate.

B. Receive fixed rate while paying floating rate.

C. Both receive and pay fixed rate.

D. Both receive and pay floating rate.

Section B (2 Mark)
Mrs. Dikshit is a single, sixty-five year old with a modest lifestyle and no income beyond what her investment portfolio of Rs1,00,00,000 generates. Her primary investment goal is to not outlive her assets; she does not, under any circumstances, want to lose money because she recalls that her relatives lost money in the crash of 2000. Mrs. Dikshit exhibits these behavioral biases:

A. loss aversion and anchoring and adjustment

B. Representative bias

C. Framing bias

D. Availability bias

Section A (1 Mark)
The Eligibility Criteria for Personal Loans for Self Employed Professionals & Businessman in India states that the minimum age of the applicant should be:

A. 21

B. 25

C. 18

D. None of the Above

Section C (4 Mark)
You as a Chartered Wealth Manager are approached by a client who is depositing some amount in an account that pays a ROI of 12% p.a compounded monthly. She also has an option of investing in another account that pays ROI 12.76% p.a. compounded annually. She wants to know which of these is a better choice.

A. 12% p.a. compounded monthly is better

B. 12.76% p.a. compounded annually is better

C. 12.76% p.a. is better by .0775 %

D. 12% p.a. compounded monthly is better by .0775%

Section A (1 Mark)
A ____________________ tax system places a relatively large tax burden on upperincome people and a relatively small tax burden on lower-income people.

A. Proportional

B. Progressive

C. Regressive

D. All of the above

Section B (2 Mark)
Mr. X gives Rs. 200000 to Mrs. X as gift. She invests in a proprietary concern and incurs a loss of Rs. 40000

A. The loss shall be ignored while computing income of both Mr. and Mrs. X

B. The loss shall be borne by Mrs. X

C. The loss shall not be clubbed

D. This loss shall be clubbed in the hands of Mr. X

Section A (1 Mark)
A trough is ________.

A. A transition from an expansion in the business cycle to the start of a contraction

B. A transition from a contraction in the business cycle to the start of an expansion

C. A depression that lasts more than three years.

D. Only something used by farmers to feed pigs and not an investment term