Section C (4 Mark)
A Portfolio manager is holding the following portfolio:



The risk free rate of return is 6% and the portfolio’s required rate of return is 12.5%. The manager would like to sell all of his holdings in stock A and use the proceeds to purchase more shares of stock D. What would be the portfolio’s required rate of return following this change?

A. 13.63%

B. 10.29%

C. 11.05%

D. 12.52%

Section A (1 Mark)
Fiscal termites are factors that threaten the integrity of tax systems, and most of which relate to the internationalization of tax. These are:

A. I, II and III

B. III and IV

C. I, II and IV

D. All of the above

Section B (2 Mark)
In a collateralized mortgage obligation (CMO) a tranche:

A. Promises a different return (coupon) to investors

B. A liquidity enhancement

C. Carries a different risk exposure

D. A and C above

Section B (2 Mark)
Risk to bondholders comes from

A. I and II

B. I and III

C. II and III

D. All of the above

Section B (2 Mark)
How much should you pay for a share of stock that offers a constant growth rate of 10%, requires a 16% rate of return, and is expected to sell for Rs50 one year from now?

A. Rs. 42.00

B. Rs. 45.00

C. Rs. 45.45

D. Rs. 47.00

Section A (1 Mark)
Which of the following is/are the challenges of Private Banking?

A. I, II and III

B. I,III and IV

C. I, II and IV

D. All of Them

Section A (1 Mark)
A(n)_______________ is a credit-rating agency that keeps records of borrowers' loan payment histories.

A. Credit Agreement

B. Credit Monitoring authority

C. Credit Bureau

D. Central Bank

Section A (1 Mark)
In …………………without delivery possession of the mortgaged property, there mortgager binds himself personally to pay the mortgage money

A. Usufructuary mortgage

B. Simple mortgage

C. English mortgage

D. Anomalous mortgage

Section B (2 Mark)
Amit has just received new information regarding his investment in PLC ltd. The new information appears to be in conflict with earlier forecast of what the stock price should be at this point. He is still willing to incorporate the new information into his forecast and to revise it accordingly.
Which behavioral heuristic is Amit displaying?

A. Confirmation Bias

B. Conservatism Bias

C. Anchoring and Adjustment

D. Framing Bias

Section C (4 Mark)
Consider the following information for three mutual funds:



Market Return 10%
Risk free return is 7%.
Calculate Jensen measure (%).

A. 1.70, 5.30, 3.40

B. 2.25, 3.78, 4.65

C. 4.35, 3.78, 2.53

D. 3.17, 4.58, 5.78

Section C (4 Mark)
Read the senario and answer to the question.
Calculate the Net Worth of Mr. Adhikari as on 31/03/2009.

A. Rs. 46,01,284

B. Rs. 47,80,688

C. Rs. 43,26,785

D. Rs. 46,83,785

Section B (2 Mark)
An investor is considering the purchase of a small office building and, as part of his analysis, form the following given data calculate the Net Operating Income (NOI).

A. Rs. 2,10,000

B. Rs. 1,97,500

C. Rs. 1,93,500

D. Rs. 1,83,750