Q1. Mr.

Vinay plans to send his son for higher studies abroad

for 10 years. He expects the cost of these studies to be Rs
15,00,000 . How much should he save annualy to have Rs
15,00,000 at the end of 12 years, if the intrest rate is 10%?
Q2- Suppose you buy a House for Rs 50,000,00 on credit to be
repaid in 5 annual instalments assuming 12% inetrest rate
compound annually, what is the equal annual instalment? Also
construct an amortization schedule?
Q3- The current rate of intrest on home loan offered by a
commercial bank BANKO is 10.5% per annum. Loan is
available for a maximum period of 20 years. ROHIT is planning
to buy a property that will cost him Rs 60 lakhs. Bank can
finance upto a maximum of 90% of the value of the property,
the remaining 10 % has to be paid upfront by the purchaser to
the builder before the loan is approved by the bank. As per the
terms of sale, the buyer of the property can get a cash discount
of 20% of the value of the property. Rohit can manage 10% of
the initial deposit to be made to the builder from his past
savings. He is not sure about the EMIs that he will have to pay
in case he takes the loan repayable in 12 years. You are
expected to advise Rohit. Calculate the EMIs and segregate the
EMIs for the first year into interest and principle components
for the purpose.
Q4- A Companys bonds have par value of Rs 1000, mature in 8
years, and carry a coupon rate of 10% payable semi-annually. If
the appropriate discount rate is 14%, what price should the
bond command in the market place?

Q5- The Vikram company has a perpetual bond that pays Rs
250 interest annually. The current yield on this type of bondis
12%. At what price will it sell? If the required yield rises to 14%,
what will be the new price?

Q6 Wipro company currently pays a dividend of Rs 10.00 per
share on its common stock. The Company expects to increase
the dividend as a 14 % annual rate for the three years and at a
12% rate for the next three years and then grow the dividend at
a 10% thereafter. You require a 12% return to invest in this
stock. What value should you place on a share of this stock?

Q7 The ANIL and SUNIL Corporation have the following
probabilitydistribution of returns for next year.
RETURNS
STATE PROBABILITY ANIL CORP SUNIL CORP
BOOM .1 16

22
RECESSION .2 -7 -4
NORMAL .4 12 11
RECOVERY .1 11 16
SLOW
GROWTH
.2 14 20

a) What is the expected return on portfolio made up 30% of
anil and 60% of sunil
b) Find out the standard deviation of each stock
c) What is the covariance and co-efficient of each stock
d) What is the portfolio return and and risk

Q8- Global financial meltdown has badly affected Indian stock.
Return and Probability of two stocks traded in BSE i.e. SBI and
ICICI bank shares are given below:
TCS WIPRO
RETURN PROBABILITY RETURN PROBABILITY
22% 0.05 12% 0.10
12 0.10 10 0.10
14 0.35 12 0.20
8 0.40 -5 0.40
-8 0.10 -10 0.20

You are required to calculate the expected return and standard
deviation of return of TCS and WIPRO. As a stock broker, which
security will you recommend to your client?