FPWM WORKSHEET 1 1 An investors saves Rs.15575 in your bank which gives him 8% interest pa compounded annually.

How much money will he get after 10 years? 33,625.26

2 Mr. Gupta wants to have Rs.575000 after ten years for his daughter's education. The prevailing rate of inte be invested now to achieve his goal? 185,134.61

3 Mr. Shiv wants to have 8,00,000 after five years for buying a car. What is the amount he will need to inves he plans to invest in a balanced fund (where return can be estimated at 12 % to be on the conservative side Rs. 442,940.60

4 Mr. & Mrs. Shaw spends Rs.360000 per annum to meet annual living costs. They wish to maintain the sam after ten years. Their financial planner assumes inflation will be 7% p.a. for the first five years, and 9% p.a they will will need 75% of their present expenses. How much will they need pa after retirement to fund the 270000 378,688.97 -582,659.92 5 If the nominal rate of return is 24%, and the rate of inflation is 9%, find the real rate of return. 6 Mr. Gupta who is 30 years old spends R.2,00,000 p.a. to maintain his living standard. He will retire at the inflation is assumed to be 7% for the next thirty years. If he wants to maintain the same standard of living even after retirement, how much should he save every 7

Ulli Lohrmann and his wife, Suzanne Lohrmann, are planning for retirement and want to compare the performance of a few mutual funds they are considering for investment. They believe that a comparison o year period would be appropriate. They are given the following information about the Rhein Valley Supe that they are considering. Year 1 2 3 4 5 AUM at the beginning of the Net Return year 30 million 15% 45 million -5% 20 million 10% 25 million 15% 35 million 3% 8% 1.15 1.073173 0.95 1.1 1.15 1.03

1)Compute the arithmetic mean annual return 2)Compute the geometric mean annual return. How does it compare with the arithmetic mean annual retu 3)The Lohrmanns want to earn a minimum annual return of 5 percent. Is the money-weighted annual return greater than 5 percent?

Year Balance from previous year New investment by the investor (cash inflow for the mutual fund) Net balance at the beginning of year Investment gain (loss) Withdrawal by the investor (cash outflow for the mutual fund) at the end of the year Balance at the end of year Cash Flows (CFt)

1 0 30 30 4.5

2 34.5 10.5 45 2.25 0

3 20 3 20 2

4 22

5 28.75 6.25 35 1.05

25 3.75

0 34.5

22.75 20

0 22

0 28.75

36.05

8 Lisa earns a return of 6.2% for the last 100 days on stocks and Thomasearns a return of 5% for the last thre

ORKSHEET 1

ded annually. How

prevailing rate of interest is 12%.How much is needed to

t he will need to invest now, if as a moderate risk taker, n the conservative side) and returns are compounded quarterly?

sh to maintain the same standard of living after retirement five years, and 9% p.a. for the next five years. The family feels after retirement retirement to fund their present lifestyle?

Effective rate 0.13761 1,522,451.01 -19,510,553.53 5,582.48

d. He will retire at the age of 60 .

should he save every month if the rate of interest thorughout the period is 12% ?

d want to compare the past ve that a comparison over a fivehe Rhein Valley Superior Fund

etic mean annual return? -weighted annual

of 5% for the last three months on mutual funds. Compare the returns.

FV(r,nper,pmt,pv) (1+r)/(1+i)-1

8 Find the average three yearly returns and standard deviation of returns and average expense ratio, taking a rando Equity: Mid & Small Cap: Long-term Performance Fund Name 1-Y 3-Y Expense Return (%) Return (%) Ratio Axis Midcap 2.17 -2.45 BNP Paribas Midcap 5.54 19 2.5 Birla Sun Life Dividend Yield Plus -1.63 17.41 2.02 Birla Sun Life India Reforms -10.69 -2.5 Birla Sun Life Mid Cap -4.84 10.85 1.98 Birla Sun Life Pure Value -4.31 12.77 2.5 Birla Sun Life Small & Midcap -2.57 14.14 2.46 Canara Robeco Emerging Equities 2.97 19.99 2.5 DSPBR Micro Cap Reg -0.74 23.08 2.28 DSPBR Small and Mid Cap Reg -5.27 17.54 2 Edelweiss Select Midcap --2.48 Escorts Growth -10.73 5.15 2.5 Escorts High Yield Equity -9.74 8.99 2.5 Escorts Leading Sectors -6.4 4.71 2.5 Franklin India High Growth Companies -5.38 11.17 2.23 Franklin India Prima -1.43 15.19 2.18 Franklin India Smaller Companies -2.88 13.48 2.33 HDFC Mid-Cap Opportunities 1.34 22.19 1.91 HSBC Midcap Equity -6.07 5.11 2.47 HSBC Progressive Themes -6.24 -2 2.39 HSBC Small Cap -13.8 7.36 2.5 ICICI Prudential Discovery 2.72 22.33 1.92 ICICI Prudential Discovery Inst I 3.67 23.6 1 ICICI Prudential Midcap -4 12.23 2.33 ICICI Prudential Midcap Inst I -2.78 13.7 1 IDFC Premier Equity 3.65 19.04 1.88 IDFC Sterling Equity -0.25 18.61 2.02 ING Midcap -5.12 11.6 2.5 JM Core 11 -11.7 -7.13 2.5 JP Morgan India Smaller Companies -2.3 15.03 2.44 Kotak Emerging Equity 1.6 13.47 2.49 Kotak Mid-Cap -1.16 15.41 2.34 L&T Midcap -4.12 12.06 2.5 Mirae Asset Emerging Bluechip Regular 1.19 -2.47 Motilal Oswal MOSt Shares M100 ETF -5.27 -1 Principal Emerging Bluechip -1.29 12.05 2.34 Reliance Equity Opportunities 3.57 22.86 1.84 Reliance Equity Opportunities Inst 3.77 23.06 -Reliance Long Term Equity -1.31 11.96 2.03 Reliance Small Cap -3.1 -2.26 Religare Mid Cap -1.4 19.96 2.5 Religare Mid N Small Cap -1.67 22.32 2.5

SBI Magnum Emerging Businesses SBI Magnum Global SBI Magnum Midcap Sahara Mid-Cap Fund Sahara Star Value Sahara Wealth Plus Fixed Pricing Sahara Wealth Plus Variable Pricing Sundaram Equity Multiplier Sundaram S.M.I.L.E. Inst Sundaram S.M.I.L.E. Reg Sundaram Select Midcap Inst Sundaram Select Midcap Reg Tata Dividend Yield Tata Growth Taurus Discovery Taurus Ethical UTI Master Value UTI Mid Cap

11.53 -0.21 -3.93 -5.26 -2.68 --5.41 -4.61 -9.36 -2.87 --3.84 -4.69 --5.19 -0.55 -1.41 -3.64 -6.51 -7.47 -2.46

24.35 16.5 7.77 10.96 9.82 10.74 6.41 9.15 14.19 18.33 10.3 4.55 10.66 18.63 16.42

2.21 2.09 2.37 2.5 2.5 2.5 2.5 2.36 1.5 2.24 1.5 1.89 2.35 2.43 2.5 2.5 2.18 1.58

pense ratio, taking a random sample of twenty funds.

9 Find Holding period returns, mean and standard deviation Month End price Dec,1994 42.625 Jan,1995 47.25 Feb,1995 48 Mar,1995 42 Apr,1995 42.5 May,1995 43.375 Jun,1995 41.625 Jul,1995 42.375 Aug,1995 41.25 Sep,1995 38.75 Oct,1995 39.5 Nov,1995 43.5 Dec,1995 46 Jan,1996 50.875 Feb,1996 53.375 Mar,1996 53.5 Apr,1996 55.375 May,1996 55.5 Jun,1996 55.5 Jul,1996 58.625 Aug,1996 56.25 Sep,1996 57.375 Oct,1996 57.625 Nov,1996 60.125 Dec,1996 58.875