Fusionen Meister-FinvesT

1. Which one of these is not a credit rating agency?

A.SMERA

B. CARE

C. CIBIL

D. FITCH

2. Which one of these best describes a bear hug letter?

A. A letter from the target to the acquirer outlining all of the positive effects that would result from
an acquisition between the two companies and threatening a hostile takeover.

B. A letter from the target to the acquirer outlining all of the negative effects that would result from
an acquisition between the two companies.

C. A letter from the acquirer to the target outlining all of the positive effects that would result from
an acquisition between the two companies and threatening a hostile takeover.

D. A letter from the acquirer to the target outlining all of the negative effects that would result from
an acquisition between the two companies.

3. In what ways can restricted stock/RSUs be handled when a company is being acquired?

A. The unvested grant can be cashed out

B. The grants can be converted into restricted stock/RSUs in the buyer with a new number of
shares/units but the same vesting schedule

C. The vesting can be accelerated to occur at the time of the deal’s closing

D. Any of the above

4. A man invented a financial instrument that is considered to be one of the instruments that were
brought during the 2008 banking crisis. Name the firm with which the man was associated with,
when the said security was invented?

A. Saloman Brothers

B. Morgan Stanley

C. J.P. Morgan

D. Goldman Sachs
5. Ron entered into a "forward contract," to buy 1500 shares of Hi-Lo Corp. stock, at a price of
$5.12 per share—in exactly 6 months. Now, the six month period has passed. Hi-Lo Corp.'s stock
is trading at $7.31 per share. What are the consequences for Ron?

A.Ron loses $3285

B.Ron gains $7680

C. Ron loses $7680

D. Ron gains $3285

E. Ron makes $3300

6. Majnu has some excess funds to invest for one month. She can choose a U.S. time deposit (in
U.S. dollars) or a Canadian time deposit (in Canadian dollars). Assume that both deposits have
one-month maturity and both have no default risk. The Canadian time deposit has a current
interest rate of 0.20% per month. The spot exchange rate is 1.2280 U.S. dollar/Canadian dollar.
The 1-month forward exchange rate is 1.2300 U.S. dollar/Canadian dollar. Assuming domestic
and foreign markets are in equilibrium, the "interest rate parity theorem" indicates that the one-
month U.S. time deposit rate should be:

A.0.037%

B. 0.363%

C. 0.302%

D.0.21%

E. 0.29%

7. Denzong Corporation’s common shares trade at Rs. 72.8/share and its estimated price-to-
earning (P/E) ratio is 53. It borrows funds to repurchase shares at its after tax cost of debt of
4.37%, its EPS will be:

A. Decrease

B.Increase

C. Cannot be determined

D. Remains the same

8. What is the value of the tax shield if the value of the firm is $5 million, its value if unlevered
would be $4.78 million, and the present value of bankruptcy and agency costs is $360,000?

A.$0

B. $140,000

C. $220,000

D. $360,000

E. $580,000
 9. A put option exists on the stock of T-bar Corporation. The exercise price is $45. Right now the
put option can be purchased for $1. T-bar stock is currently selling for $50 per share. What is the
intrinsic value of the put option?

A.$1

B. $4

C. $0

D. $6

E. $5

10. Company X, acquired Company Y, an all-in-one aggregator app for a reported $40 million to
expand its own services. Company Y is:

A. Mobikwik

B. Tapzo

C. PhonePe

D. PayTm Mall

E. None of the above

11.___________ can be defined as a system which intends to control the cost of each unit
through prior determination of what should be the cost and then its comparison with actual
cost.
A. Standard costing
B. Absorption costing
C. Marginal costing
D. None of the above
12. Money market is divided into how many types?
A. 2
B. 5
C. 3
D. 4
13. Indian Commodity Exchange has included ____ and _____ in its list of traded
commodities.
A. asafoetida and pepper
B. cardamom and asafoetida
C. pepper and cardamom
D. cinnamon and asafoetida
.
14. A recent report by State Bank Of India’s research wing mentioned that Indian
Government might have to cut its capital expenditure in Q4 of current fiscal year by a
massive ₹700 billion primarily because of.
A. Shortfall due to cut in excise duties on petrol and diesel
B. Increased subsidy bill on agriculture
C. Shortfall in GST collection
D. Relief funds given for disaster and natural calamities
15. Treasury yield curve plots Treasury interest rates relative to which one of the following?
A. market rates
B. the risk-free rate
C. inflation
D. maturity
16. Atlas Corp. wants to raise $4 million via a rights offering. The company currently has
450,000 shares of common stock outstanding that sell for $40 per share. Its underwriter has
set a subscription price of $26 per share and will charge the company a 7 percent spread.
Assume that you currently own 7,200 shares of stock in the company and decide not to
participate in the rights offering. How much can you get for selling all of your rights?
A. $24,911
B. $27,095
C. $25,363
D. $26,414
17. When a database eliminates companies that cease to exist because of a merger or
bankruptcy, this can result in
A. Look-ahead bias
B. Back-testing bias
C. Survivorship bias
D. None of the above
18. An analyst has been given the following exchange rates and interest rates. Interest rate:
US: 5% Canada: 7% Currency exchange rates: Spot exchange rate (USD per CAD) – 0.72; 1
year futures rate (USD per CAD) -0.70 The profitable arbitrage
A. Sell the futures at the futures price of $0.7065
B. Sell the futures at the futures price of $0.7337
C. Buy the futures at the futures price of $0.70
D. None of the above
19. A 5 year $ 1000 par Treasury bond pays a 6% annual coupon. The risk free rate is 5%,
and the annual yield on the bond is 6%. The bond just made a coupon payment. The price of
a 30 month futures contract on this bond is closest to
A. $1003.69
B. $979.58
C. $1,049.32
D. 1125.89
20. Arun runs a hedge fund that mitigates risk by taking long & short positions to reduce the
systematic risk. Satya runs another hedge fund which makes profits from large levered long
or short positions in currency & IR Derivatives. These funds are:
A. Arun- Market Neutral Fund, Satya-Global Macro Fund
B. Arun- Long/short Fund, Satya-Global Macro Fund
C. Arun- Long/short Fund, Satya-Event Driven Fund
D. Arun- - Market Neutral Fund, Satya-Event Driven Fund
21. That one single variable that is considered to be very critical when one's aim is to
estimate the possible gains and success of an active portfolio is
A. Alpha/systematic risk
B. Gamma/systematic risk
C. Alpha/nonsystematic risk
D. Gamma/nonsystematic risk
22. The CAL is a straight line from the risk-free asset through the:
A. global maximum-return portfolio
B. optimal risky portfolio
C. global minimum-variance portfolio
D. None of these
23. According to the CAPM:
A. an investor who is risk averse should hold at least some of the risk-free asset in his
portfolio
B. a stock with high risk, measured as standard deviation of returns, will have high expected
returns in equilibrium
C. all investors who take on risk will hold the same risky-asset portfolio
D. none of these
24. What capital is the money that a company has received from the sale of its shares, and
represents money that is not borrowed?
A. Net worth
B. Owner's equity
C. Owner's capital
D. Paid-up Capital
25. What among the following compares the value of a dollar today to the value of that
same dollar in the future, taking inflation and returns into account?
A. NPV
B.IRR
C. ARR
D. Payback