Section A (1 Mark)
Which one of the following definitions of hedge fund strategies is not correct?

A. A market neutral strategy aims to make a return regardless of how overall market prices move

B. Fixed income arbitrage makes a return by looking at similar fixed income instruments and working out which rise in price

C. Relative value exploits price differentials in identical financial instruments

D. Arbitrage takes advantage of pricing anomalies in the prices of the same or similar financial instruments

Section C (4 Mark)
You own 3 scripts with their market value at



Calculate the CAGR of portfolio.

A. 5%

B. 10.26%

C. 1.64%

D. 11.16%

Section C (4 Mark)
Read the senario and answer to the question.
Pallavi’s marriage is expected by the end of December, 2010 with an expected present cost of Rs. 24,00,000. He is expected to realize from his Tatanagar Flat 18, 00,000 by that time. Calculate what additional amount is required for his daughter’s marriage. With 8% pa. risk free rate compounding monthly what amount he has to save per month (BEGIN) in a debt fund?

A. Rs. 2,27,367 Rs. 7,663

B. Rs. 3,83,365 Rs. 9,815

C. Rs. 4,12,245 Rs. 8,615

D. Rs. 3,45,458 Rs. 11,363

Section C (4 Mark)
Mr. XYZ sells a Nifty Put option with a strike price of Rs. 4000 at a premium of Rs. 21.45 and buys a further OTM Nifty Put option with a strike price Rs. 3800 at a premium of Rs. 3.00 when the current Nifty is at 4191.10, with both options expiring on 31st July.
What would be the Net Payoff of the Strategy?

• If Nifty closes at 3980.55
• If Nifty closes at 4800

A. 145.95 and -75.05

B. 107.95 and -135.05

C. 149.95 and -81.55

D. -1 and 18.45

Section C (4 Mark)
Read the senario and answer to the question.
Mr. Saxena is planning to visit USA for the very first time in his carrier to promote software of his company and is expected to stay long. He wants to plan his journey in such a manner so that he can get maximum tax benefits in the FY 2007–08 from the residential status point of view. What is the latest date when he can afford to leave India & earn status of an NRI to get maximum tax benefits in assessment year 2008–09?

A. On 12-10-2007

B. On 28-09-2007

C. On 01-10-2007

D. On 22-09-2007

Section C (4 Mark)
Mr. XYZ is bullish about ABC Ltd stock. He buys ABC Ltd. at current market price of Rs. 4000 on 4th July. To protect against fall in the price of ABC Ltd. (his risk), he buys an ABC Ltd. Put option with a strike price Rs. 3900 (OTM) at a premium of Rs. 143.80 expiring on 31st July.
What would be the Net Payoff of the Strategy?

• If ABC Ltd closes at 3458
• If ABC Ltd closes at 4352

A. 185.25 and 250.35

B. -243.80 and 208.20

C. -158.25 and 154

D. 450 and 158

Section A (1 Mark)
__________refers to responding to a positive action with another positive action, rewarding kind actions.

A. In Equity Reversion

B. Money Illusion

C. Reciprocity

D. Escalation of Commitment

Section C (4 Mark)
Which of the following statements is/are correct?

A. I and II

B. I and III

C. III and IV

D. I, II and III

Section B (2 Mark)
Which of the following activities is/are a part of “Building the CRM project foundation phase “in CRM implementation?

A. I, II and III

B. I, III and IV

C. I, II and IV

D. All of the above

Section B (2 Mark)
Total income for assessment year 2007-08 of an individual including long-term capital gain of Rs. 60,000 is Rs. 1,40,000. The tax on total income shall be:

A. Rs. 8,800

B. Rs. 8,160

C. Rs. 7,000

D. Rs. 5,000

Section A (1 Mark)
Mr. Naresh is working in a reputed company and earning Rs. 5,00,000/- p.a. and is now 50 years old. He has invested Rs. 2,50,000/- in an annuity which will pay him after 5 years a certain amount p.a. at the end of every year for 10 years. Rate of interest is 8% p.a.
Calculate how much he will receive at the end of every year after 5 years?

A. 376231

B. 53927

C. 367332

D. 54743

Section A (1 Mark)
If the proposer does not disclose fully all the material facts at the time of Proposal the principle violated

A. Caveat emptor

B. Insurable interest

C. Utmost good faith

D. Sharing of risk