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a) 7.55%
b) 8.19% 8.41%
c) 8.41%
d) 8.76%
2. What is the effective rate of interest for 10% compounded monthly, quarterly and semi-annually?
3. A paper company invests Rs.4m to clear a tract of land and plant some young pine trees. The trees will matu
years, at which time the forest will have a market value of Rs.8m. What is the expected rate of return for the p
company's investment?
a) 7.89% 7.18%
b) 7%
c) 7.18%
d) 7.1
4. You have taken a loan of Rs. 1,00,000 for three years. The interest rate is 10% compounded monthly. What i
a) 3,226 ₹ -3,226.72
b) 3200
c) 3104
5. You started investing in a Monthly SIP Rs.5000 @14%pa. What amount you will get after 10 years?
a) 12,46,461
b) 12,32,926 ₹ 1,295,344.56
c) 13,10,456
d) 12,95,344
6. You invest Rs. 50,000 in a commercial real estate property and expect to clear Rs. 180,000 (after selling expe
closing costs etc.) when you sell it 8 years. What is your expected rate of return on this property?
a) 17.63% 17.36%
b) 18.36%
c) 17.36%
d) 17.01%
7.a bill that is designed to reduce the nation's budget deficit passes both houses of legislature. Lok sabha tells u
the bill will reduce the deficit by Rs. 500 billion over 10 years. What it does not tell us is the timing of the reduc
a) Rs. 311 Bn
b) Rs. 337 Bn
c) Rs. 335 Bn
d) Rs. 334 Bn
You have three projects (A, B and C) for which you forecast the following cash inflows:8
Each of the projects has been evaluated by one of your company's trainees. They have given you the following
Which asset is the most valuable? Assume 8% rate of return
a) Asset A
b) Asset B
c) Asset C
d) All
9. Mr. Jones purchased a 2 year bond bearing a 12% coupon rate. He purchased the bond at par (Rs. 1,000). If r
to 9% what will be the new price of the bond?
a) 1,053 ₹ -1,052.77
b) 1,136
c) 1,193
d) 900
10. If the post tax return on a security is 5.50%, the real pre-tax return would amount to _______% if the incom
rate is 10% and the inflation rate is 3%.
a) 4.56% 5.14%
b) 5.14%
c) 5.98%
d) 6.57%
12. David will receive Rs. 50,00,000 from a Trust fund in twenty years. His annual return of is 10% p.a. Find the
value of the fund.
a) 740,000 ₹ -743,218.14
b) 743,000
c) 746,000
d) 749,000
13. Josephine needs Rs. 2,00,000 in 5 years' time to pay for the down payment of her house
What is the amount that she should deposit now, in case she is in a position to earn 10% p.a. compounded mo
a) 115,557 ₹ -121,557.72
b) 121,557
c) 124,557
d) 118,557
14.A few years ago, Minesh started investing in mutual funds with an initial investment of Rs. 30,000. The inve
now worth Rs. 55,500. Assuming the annual rate of return on investment is 6% p.a. compounded quarterly, ho
quarter minesh has been investing?
a) 36 41.31921
b) 41
c) 46
d) 51
15. Ashima wants to give her duaghter Rs. 12,000 at the end of each yearfor the next four years. Assuming her
deposits that amount in an account earning 8% p.a. interest, how much will she get at the beginning of the nin
a) 73,566 ₹ 54,073.34
b) 79,415 ₹ 73,566.19
c) 79,451
d) 73,112
16. Bipin has won a scholarship worth Rs. 30,000 now, for his 4-years university course. Assuming an annual int
rate of 10% when investing the scholarship amount, what is the amount from this scholarship that he gets at th
beginning of each year of his course?
a) 8,464 ₹ 8,603.75
b) 8,964
c) 9,464
d) 8,603
18. If Mohan has saved Rs. 5,000 each month end for past 6 years, what is the annual interest rate that he has
from the account if the balance is now Rs. 10,00,000, assuming monthly compounding?
a) 20% 3% 30%
b) 25%
c) 30%
d) 40%
19. Robert expects to receive an annual payment of Rs. 2,50,000 from an inheritence fund at the beginning of t
for 8 years. What is the current worth of this fund assuming the fund is invested earning an annual rate of retu
8.25% and the first payment will only be made five years from now?
a) 1,028,013
b) 1,036,413
c) 1,048,073
d) 1,049,027
20. A bondholder buys a bond maturing in two years for Rs. 120 and earns Rs. 15 per annum as interest. His YT
_______%.
21. Akbar expects to pay out the following in next few years:
If Akbar desires to be able to pay out these amounts how much should he have now, assuming an annual rate o
a) 75908
b) 78905
c) 79058
d) 80868
22.Geeta invests Rs. 2,000 at the beginning of each month for 48 months. Her rate of return is 8% p.a. The inve
value at the end of the said period will amount to Rs.___________.
23. Neeta wants to accumulate Rs. 1,50,000 in three years time for a one month trip to the USA. Assuming she
an 8% annual return on her investments, compounded quarterly, how much must she invest today in order to
her goal?
24. A bank deposit of Rs. 25,000 will earn an interest of Rs.________ at the end of one year, if it earns 10% p.a
compounded every month.
24. A bank deposit of Rs. 25,000 will earn an interest of Rs.________ at the end of one year, if it earns 10% p.a
compounded every month.
25. A bond pays a coupon of 10% annually with interest paid semiannually. The bond has a duration of three ye
Yield on the bond is 12%. Find its current price assuming Face Value of 1000
a) 1,000.83
b) 1,050.43 n 6
c) 950.83 r 12% 6%
d) 986.36 fv 1000
pmt 10% 50
₹ -950.83
s paying you interest @ what is effective rate of return
the effective rate of return on an innvestment
mi-annually?
fter 10 years?
55
60
65
70
75
₹ 311.22 ₹ 311.22
6 7
- - ₹ 3,993
- - ₹ 3,756
2,000 2,000 ₹ 3,788
ouse
% p.a. compounded monthly?
₹ 26.21
und at the beginning of the year value at 5th year ₹ -1,540,537.49 value at year 0
g an annual rate of return of ₹ 1,036,412.75
pmt 250000 I used 4 years 1st it was wrong - I should go from 5 to 0 y
type 1
n 8
r 8.25%
pv ?
nnum as interest. His YTM is
₹ 75,908
2a $110.47 $10.47
$110.38 $10.38
$110.25 $10.25
3c 7.18%
4a ($3,226.72)
5b $1,232,925.504
6c PV -50000
FV 180000
PMT 0
RaTE 17.36%
NPER 8
7a $311.22
25
30
35
40
45
55
60
65
70
75
8a a b c
$3,992.71 $3,756.06 $3,788.49
1000 0 0
1000 0 0
1000 1700 0
1000 1700 0
1000 1700 2000
2000
2000
9a ($1,052.77)
10 b pre tax return 6.111111111111
11 b PMT -40000
NPER 40
RATE 5.140%
FV 5000000
PV 0
12 b PV ($743,218.14)
FV 5000000
RATE 0.1
NPER 20
13 b nper 60
rate 0.008333333333
pmt 0
fv 200000
pv ($121,557.72)
14 b pv -30000
fv 55500
nper 41.31920549
pmt 0
rate 0.015
15 a $54,073.34
($73,566.19)
16 d PMT ($8,603.75)
NPER 4
FV 0
PV 30000
RATE 0.1
Type 1
17 d $95,954.65 4704.650724812
18 c PMT -5000
NPER 72
RATE 3% 0.3044926759
FV 1000000 30.45
19 b FV 250000
NPER 8
rate 8.25%
($1,540,537.49)
$1,036,412.75
20 b 4.34%
21 a RATE 9%
NPV $75,908.14
22 a PMT -2000
Monthly effective rate 0.00643403011 1 24000 1920
NPER 48 2 24000 1920
PV 0 3
Type 1 4
FV $112,777.95
23 d FV 150000
NPER 12
RATE 0.02
PV ($118,273.98)
24 b NPER 12
PMT 0
FV $27,617.83 $2,617.83
PV -25000
RTE 0.008333333333
25 c 6.00% 12%/2
PMT 50
NPER 6
FV 1000
PV ($950.83)
25920
25920
103680