December – 18 Syllabus 2016

1. M buys a call option contract for a premium of Rs. 200. The exercise price is RS. 25
and the current market price of the share is Rs. 22. If the share price after three
months reaches Rs. 30, what is the profit made by M on exercising the option? A
contract is for 100 shares. Ignore transaction charges.
a. Rs. 200
b. Rs. 300
c. Rs. 100
d. Rs. 600
2. You are a forex dealer in India. Rates of rupee and pound in the international market
are US $0.01386952 and US $1.3181401 respectively. What will be your direct quote
of £ (pound) to your customer.
a. Rs.54.6987
b. Rs.71.1408
c. Rs.95.0386
d. Rs.0.0105
3. ‘Bank rate’ published by the Reserve Bank refers to
a. the repo rate transacted by RBI.
b. the rate at which housing or other long term loans shall be sanctioned by
scheduled banks to their customers.
c. The rate at which RBI is willing to buy or rediscount bills of exchange or
other commercial paper.
d. the rate which RBI uses as cut-off for auction of Government securities.
4. An investor has invested in a mutual fund when the NAG was Rs. 15.50 per unit. After
90 days the NAV was Rs. 14.45 per unit. During the period the investor got a cash
dividend of Rs. 1.35 per unit and capital gain distribution of Re. 0.20. The annualized
return based on 360 days year count will be
a. 3.23%
b. 12.92%
c. 0.8075%
d. 16.45%
5. Initial investment of a project is Rs. 25 lakh. Expected annual cash flows are Rs. 6.5
lakh for 10 years Cost of capital is 15%. The annuity factor for 15% for 10 years is
5.019. The Profitability Index of the project will be
a. 1.305
b. 3.846
c. 0.26
d. 0.7663

1
6. Rate of inflation = 5.1%, β = 0.85, Risk premium = 2.295%, Market return = 12%. The
real rate of return will be
a. 4.2%
b. 11.70%
c. 6%
d. 5.95%
7. In a constant dividend model, the following estimates the difference between the
required rate of return and the growth rate :
a. Earnings Retention ratio
b. Leverage ratio
c. Dividend Pay-out ratio
d. Dividend yield ratio
8. Presently, a company’s share price is Rs. 120. After 6 months, the price will be either
Rs. 150 with a probability of 0.8 or Rs. 110 with a probability of 0.2. A call option exists
with an exercise price of Rs. 130. What will be the expected value of call option at
maturity date?
a. Rs. 20
b. Rs. 16
c. Rs. 12
d. Rs. 10
9. A stock is currently selling at Rs. 270. The call option to buy the stock at Rs. 265 costs
Rs. 12. What is the Time Value of the option ?
a. Rs. 5
b. Rs. 17
c. Rs. 7
d. None of (A), (B) or (C)
10. A Ltd., an export customer requested his banker B to purchase a bill for USD 80,000.
Calculate the rate to be quoted to A Ltd. if B wants a margin of 0.08%, given that
the inter bank rate is Rs./$ 71.50/10.
a. Rs. 71.1569
b. Rs. 71.0431
c. Rs.71.5572
d. Rs.71.4428

2
 December – 22 Syllabus 2016
1. The initial outlay for a equipment of RAGIN Ltd is ₹ 10,00,000. It is estimated that
this will generate cash in flows of ₹ 3,40,000 per annum for 4 years. The Vost of
Capital of the company is 5 per cent. (Ignore taxes).
By how much can the annual cash flows change before the company becomes
indifferent to the project?
[Given: PVIFA (5%, 4 years) = 3.546]
[Present calculate to nearest rupees]
a. ₹ 57,992
b. ₹ 60,125
c. ₹ 61,310
d. None of the above
2. MS PARNA is planning to construct a minimum risk portfolio by investing in the
shares of NAB Ltd., and SAN Ltd., The risk associated with the return of NAB Ltd.,
and SAN Ltd. Are 23% and 25% respectively. If the co-variance between the returns
of shares of both companies is 0 (Zero), the proportion of funds to be invested in
the shares of NAB Ltd. Will be:
a. 45.84%
b. 54.16%
c. 66.67%
d. None of the above
3. The closing price of the stock of TORRENT LTD. On consecutive trading days are as
under:
Days Closing pricing (₹)
1 125.45
2 135.25
3 132.75
4 142.75
5 145.25
The Relative Strength of the stock of Torrent Ltd. is
a. 0-9875
b. 1-0255
c. 1-0628
d. None of the above
4. A Project has a Net Present Value (base Case NPV) of 1,20,000. However, this project
has one financial side effects; it expands the firm's borrowing power by 4,80,000.
The project lasts indefinitely so it is treated as supporting perpetual debt. If the

3
 borrowing rate is 15 per cent and the net tax shield is 35 per cent, what will be the
Adjusted Net Present Value (ANPV) of the project?
a. ₹2,90,000
b. ₹2,88,000
c. ₹2,40,000
d. None of the above
5. The Current Price of ACC's stock is 1,010 and it is expected that price of stock may
either go up to 1,212 or go down to 808. If the stock price of call option of ACC's
stock is 1,010 and Risk-free rate is 6-5%, the probability of decrease in stock price
will be
a. 0-6625
b. 0-5230
c. 0-4680
d. 0-3375
6. An option's 's theoretical value increase by 1-50 if the interest rate is decrease by
1%. Then, 1-50 is
a. The Gamma of a call option
b. The Theta of a put option
c. The Rho of a put option
d. The Rho of a call option
7. LONZA Ltd., an export customer who relied on the inter bank rate of ₹/US$ 80-
50/15 requested his banker to purchase a bill for USS 1,00,000. What is the rate
to be quoted to LONZA Ltd., if the banker wants a margin of 0.10%? (Calculation
rounded off to two decimal point)
a. ₹80-58
b. ₹80-42
c. ₹80-12
d. ₹78-90
8. Consider a bullish spread option strategy using call option on the stock of GANT LTd.,
with 60 exercise price, priced at 6 and a call option with ₹75 exercise price, priced
at 3:50. The current market price of stock of Gant Ltd., is 67. If the price of the
stock is 95 on maturity, the net profit at expiration will be
a. ₹8:50
b. 10:50
c. 12:50
d. 15:00
9. The Sharpe ratio and Treynor ratio of CHOLA EQUITY FUND are 0-37 and 4-16
respectively. The risk premium on the Fund is 6%. Standard deviation of the Fund's

4
 return is 11-80%. If the standard deviation of the Market Index's return is 9-56%,
the Correlation Co-efficient between return of the Fund and the Market will be
a. 0-90
b. 0-85
c. 0-72
d. None of the above
10. A call option is written for a strike price of 400, with a premium of 50.
a. The holder's maximum loss is ₹ 50
b. The holder's maximum gain is 50
c. The writer's maximum loss is 50
d. The writer's maximum gain is ₹50

December – 2017 Syllabus 2012

Question: 1
1. Answer a ll sub-divisions. Each carries 2 marks
a. The market price (ex -dividend) of an open - ended mutual fund unit was ₹15
at the beginning of the year. A dividend of ₹2 per unit has been paid during
the year. At the end of the year, the ex -dividend price is ₹ 18 per unit.
Calculate the yield of the fund as a percentage up to two decimal places.
b. S opened a 'sell' position i n two futures contracts of shares in X Ltd., when
the futures was trading at ₹1000. Each contract is for 100 shares. The initial
margin is 10% and maintenance margin is 80% of the initial margin and the
rules require withdrawal of 50% of excess over initial margin. When the price
falls to ₹9.60 per share, what would be the amount to be withdrawn or of
margin replenishment?
c. A six-month forward contract on a stock that does not pay dividend is
available at ₹340. The risk-free interest rate is 12% p.a. continuously
compounded. Calculate the forward price.
d. A project with an initial investment of ₹50 lakh and life of 10 years generates
Cash Flow After Tax (CFAT) of ₹10 lakh per annum. Calculate Payback
Reciprocal.
e. State any two situations in which NPV and IRR give conflicting results.
f. The return on market portfolio is 14%. The last dividend of share A was ₹2
and the dividend and earnings have a constant growth rate of 5% p.a. The
beta of the share is 2 and the intrinsic value of the share is ₹ 12.35. Find
the risk free return.
g. What is a Zero Coupon Bond? What is the return to the holder of such a
bond?

5
2. State whether the following are True (T) or False (F) (You may write only the
question Roman numeral and state whether True or False without copying the
statements into the answer books.):
a. A strangle involves buying a put and call with the same strike price and same
expiry date.
b. Black and Scholes Model of option valuation apply to American option.
c. A fully diversified portfolio has zero standard deviation.
d. An investor is compensated by proportionate reward when his investment has
more unsystematic risk.
e. While adjusting the cash flows of a project for risks using the certainty
equivalents, the appropriate discount rate to be used to find the NPV will be
the risk adjusted discount rate.
f. Cross rate is the rate of exchange of two currencies on the basis of ex change
quotes of other pairs of currencies.
Solution:
1.
a. Return = (Cash Dividend + Capital Appreciation + Capital Gains) / Opening NAV= (2
+ 3)/ 15 = 33.33%
b. Position: Sell; Prices have fallen. Hence withdrawal and no margin replenishment.
Initial margin = 2 × 100 × 1000 = 2,00,000
Profit: 40 × 2 × 100 = 8000. (Fall in price is taken as ₹ 960) Withdrawal = 50% of
8000 = 4000.
c. The Forward Price (F) = 340 ×e 6/ 12 × 0 . l2 = 340 × 1.0618 = ₹361.012
d. Payback Reciprocal = ₹ 10 lakh ÷ ₹50 lakh = 1/5 or 20%
e. NPV and IRR give conflicting results in the following situations: Initial investment
disparity or different project sizes.
Project life disparity
Cash outflows arise at different points during the life of the project and not just
limited to the initial outlay.
Heavy differences in the CFAT between the projects.
𝐷1 2.1
f. Intrinsic value of a share = = = = 12.35. K = 0.05 + 2.1/12.35 = 22%
𝐾𝑒 −𝑔 𝐾𝑒 −0.05
i. E(R) = Rf + β (Rm - Rf) = Rf (1 - β) + βRm
ii. 22% = Rf (-1) + 2 × 14% , or, Rf = 6%
g. A zero coupon bond is issued at a discount and repaid at face value. The difference
between these two values is the return to the holder. No periodic interest is paid.
2.
a. False
b. False
c. False
d. False
e. False
f. True

6
 December – 2017 Syllabus 2016
1. A project has a 10% discounted pay back of 2 years with annual after-tax cash inflows
commencing from year end 2 to 4 of ₹ 400 lacs. How much would have been the initial
cash outlay which was fully made at the beginning of year 1?
a. ₹ 400 lacs
b. ₹ 452 lacs
c. ₹ 633.80 lacs
d. ₹ 497.20 lacs
(Use p.v. factors only up to 3 decimal places.)
2. A project is expected to yield an after-tax cash inflow at the end of year 2 of ₹ 150
lacs and has a cost of capital of 10%. Inflation is expected at 3% p.a. While computing
the NPV of t the project, this cash flow will be taken as the following:
150

a. 1.03
(1.1)2
150

b. (1.03)2
(1.1)2

c.
150
(111.33%)2
150(1.03)2
d. (1.11)2
3. A firm has an asset β = 1.3, equity β = 1.5. Then, which of the following is true?
a. The firm is unlevered.
b. Debt β is also 1.3.
c. The above data is not possible.
d. The firm is leveraged and the debt β is lower than the asset β.
4. For a portfolio containing three securities A, B and C,
correlation coefficients ρAB = +0.4; ρAC = +0.75; ρBC = - 0.4;
standard deviation σA = 9; σB = 11; σC = 6;
weights ωA = 0.2; ωB = 0.5; ωC = 0.3;
the covariance of securities A and B is
a. 3.96
b. 24.75
c. 39.6
d. 247.5
5. A ₹ 1,000 per value bond bearing a coupon rate of 14% matures after 5 years. The
required rate of return on this bond is 10%. The value of the bond (to the nearest
rupee) will be:
a. 1,125
b. 1,152
c. 1,512
d. 862.20

7
6. The following information is available for a mutual fund:
Return 13%
Risk (S.D. i.e. σ) 16%
Beta (β) 0.90
Risk Free Rate 10%
Treynor's Ratio of the mutual fund is:
a. 3.85
b. 4.43
c. 3.33
d. 3.73
7. The 90 day interest rate is 1.85% in USA and 1.35% in the UK and the current spot
exchange rate is $ 1.6/£. The 90-day forward rate is
a. $ 1.607893
b. $ 1.901221
c. $ 1.342132
d. $ 1.652312
8. The intercept of the Security Market Line (SML) on the y axis is
a. E(Rm) - Rf
b. 1/[E(Rm) - Rf]
c. Rf - E(Rm)
d. Rf
9. A mutual fund wants to hedge its portfolio of shares worth ₹ 10 crore using the
NIFTY Index Futures. The contract size is 100 times the index. The index is
currently quoted at 6840. The Beta of the portfolio is 0.8. The beta of the index
may be taken as 1. What is the number of contracts to be traded?
a. 110
b. 116
c. 145
d. 123
10. A call option at a strike price of ₹ 200 is selling at a premium of ₹ 24. At what share
price on maturity will it break-even for the buyer of the option?
a. ₹ 200
b. ₹ 176
c. ₹ 224
b. ₹ 248

8
 December – 2019 Syllabus 2016
1. Which of the following investment avenues has the least risk associated with it?
a. Corporate Fixed Deposits
b. Deposits in commercial banks
c. Public Provident Fund
d. Non-convertible zero coupon bonds
2. M uses 12% as nominal required rate of return to evaluate its new investment projects.
It has recently been decided to protect shareholders’ interest against loss of
purchasing power due to inflation. If the expected inflation rate is 5%, the real
discount rate will be
a. 6.67%
b. 6%
c. 17.6%
d. 7%
3. A wants to hedge its portfolio of shares worth ₹ 150 million using the Index futures.
The contract size is 100 times the index. The index is currently quoted at 7500. The
beta of the portfolio is 0.9. Consider the beta of the index as 1. The number of
contracts to be traded is
a. 18000
b. 180
c. 22
d. 200
4. The following information is extracted from MF, a mutual fund scheme. NAV on 01-
11-2019 is ₹ 65.78, annualized return is 15%. Distributions of income and capital gains
were ₹ 0.50 and ₹ 0.30 per unit in the month. What is the NAV on 30-11-2019?
a. ₹ 67.50
b. ₹ 66.14
c. ₹ 65.80
d. ₹ 66.96
5. A portfolio holding 90% of its assets in CNX Nifty stocks in proportion to their market
capitalization and 10% in Treasury Bills is more sensitive to
a. Systematic Risk
b. Unsystematic Risk
c. Interest Rate Risk
d. Index Risk
6. Project X is to be financed by 40% debt (with zero beta) and balance with equity (with
1.3 beta). If the risk free rate is 13% and return on market portfolio is 22%, the
return from the project will be

9
 a. 13.07%
b. 13.70%
c. 24.70%
d. 20.02%
7. Z Ltd. invests ₹ 20 lacs in a project with life 5 years and no salvage value. Tax rate
is 50% and straight line depreciation is used. The uniform expected cash flows after
tax and before depreciation shield are:
Year end 1 2 3 4 5
Cash flows after tax (₹ lacs) 4 5 6 6 7
The payback period is
a. 3 years
b. 3 years and 11 months
c. 2 years and 11 months
d. 2 years and 6 months
8. The probability distribution of security N is given below:
Probability Return (%)
0.30 30
0.40 20
0.30 10
The risk of the return of the security will be around
a. 60%
b. 8%
c. 20%
d. 24%
9. A company’s share is currently trading at ₹ 240. After 6 months, the price will be
either ₹ 250 with probability of 0.80 or ₹ 220 with probability 0.20. A European call
option exists with an exercise price of ₹ 230. The expected value of call option at
maturity date will be
a. ₹ 10
b. ₹ 16
c. ₹4
d. ₹ 14
10. The value of beta of a security does not depend on
a. standard deviation of the security
b. standard deviation of the market
c. correlation between the security and the market
d. risk free rate

10
 December – 2021 Syllabus 2016
1. The intercept of the security market line on the y axis is Ans
a. the risk free return
b. the positive risk premium
c. the beta of the security
d. the expected return when β = 1
2. Security A has a total risk of ‘a’ and Security B has a total risk of ‘b’. a is greater than
b.The following is true:
a. If A has a higher systematic risk, B will have a higher unsystematic risk.
b. A has to have a higher systematic risk than B
c. A has to have at least the same amount of systematic risk as B
d. A can have a lower systematic risk than B
3. The following is true of standard deviation of returns of a portfolio under CAPM:
a. Market rewards the investor in proportion to the risk taken in the form of
(the standard deviation of the portfolio x(1-ρ), where ρ is the correlation
coefficient between the portfolio and market returns
b. Standard deviation of the portfolio is the sum of the standard deviations of the
securities in the portfolio
c. Standard deviation is a good measure to compare as it is the deviation per unit
of the mean return
d. Standard deviation is greater than the systematic risk of the portfolio.
4. The following various currency quotes are available: Rs. / 1£ 103.0213/ 103.5404
£ /1 $ 0.7354 / 0.7385
$ /100 ¥ 0. 8720 / 0. 8810
The rate at which 100 Yen (¥) can be purchased with rupees will be
a. Rs. 66.40
b. Rs. 67.03
c. Rs. 66.06
d. Rs 67.37
5. An option’s theoretical value increases by 1.75 if the interest rate is decreased by
1%. Then, 1.75 is
a. The rho of a put option
b. The rho of a call option
c. The theta of call option
d. The theta of a put option
6. Which of the following is not an assumption of Black-Scholes Model?
a. The risk-free rate of interest is known
b. Options can be exercised only at expiration

11
 c. Dividend is paid on the shares
d. No imperfection exists in writing an option
7. An investor invested 40% of her money in Stock A and 60% in Stock B. Stock A has a
beta of 1.2 and Stock B has a beta of 1.6. If the risk-free rate is 5% and the expected
return on the market is 12%, the expected return of the investor would be the
following under Capital Asset Pricing Model:
a. 10.08%
b. 15.08%
c. 14.80%
d. 21.80%
8. The market price (ex-dividend) of a unit of an open-ended mutual fund scheme was
₹30 at the beginning of the year. A dividend of ₹3 has been paid during the year. The
price of the unit is ₹35 at the year end. The rate of return of the past year of the
unit is
a. 24.32%
b. 26.67%
c. 25.52%
d. 28.56%
9. An investor has limited funds to invest. The following information of four securities
is given below:
Particulars Security A Security B Security C Security D
Standard Deviation 10% 15% 11% 12%
Average Return 12% 20% 17% 15%
The best security to invest in if he wants more safety in relation to the return will be:
a. Security D
b. Security C
c. Security A
d. Security B
10. A project has a 10% discounted pay back of 2 years with annual after tax cash inflows
commencing from year end 2 to 4 of ₹400 lakhs. How much would have been the total
project cash outlay which was made in two installments equally at the beginning and
end of year 1?
a. ₹381.81 lakhs
b. ₹347.11 lakhs
c. ₹346.15 lakhs
d. ₹330.58 lakhs
11. When the spot price decreases, the value of a call option
a. is equal to its premium

12
 b. decreases
c. increases
d. does not change
12. The following is true in a capital budgeting exercise with discounted cash flow
technique:
a. When there is capital rationing, Net Present Value is better than the Internal
Rate of Return.
b. The Net Present Value highlights the significant minus cash flows occurring
between the inflows when the incomes are being generated more than the
Internal Rate of Return.
c. When there are mutually exclusive proposals of different scales, the Internal
Rate of Return is better than the NPV.
d. The internal rate of return assumes that the cash flows are reinvested at the
required rate of return.
13. The spot rate is USD 1 = Rs. 75.4035/75.9848. 3 months’ swap points are 0.80-0.70.
The forward rates are
a. 74.7035/75.1848
b. 75.80/75.70
c. 74.6035/75.2848
d. 76.2035/76.6848
14. Buying a call and put with the same expiry date, on the same stock with a different
strike price is a
a. Strangle
b. Strap
c. Straddle
d. Strip
15. The spot and 3 months’ forward rates of US $ in relation to Rupee (Rs. /1 US $) are
Rs. 75.00 / 75.35 and Rs. 74.60/75.05 respectively. What will be the annualized
forward discount (with respect to ask price)?
a. 1.59%
b. 0.53%
c. 0.40%
d. 2.13%
16. An Indian invested USD 1,00,000 in USA when the US$ was Rs. 72. The investment
has appreciated by 10%, while the US$ has become stronger by 4%. The investment
return in Rupees is
a. 6%
b. 5.58%

13
 c. 14.40%
d. 9.60%
17. The following is not a disadvantage of pay-back period as an evaluation measure for
selecting a project:
a. Before the pay- back period, the mix of cash flows can be rearranged to get
the same result
b. It does not consider the magnitude of cash flows after the payback period.
c. It can give a conflicting decision compared to the net present value method
d. A company that is cash-poor gauges the early recovery of funds invested.
18. An Indian Company is planning to invest in USA. The annual rates of inflation are 8%in
India and 3% in USA. If the spot rate is currently Rs. 73.50/1$, what spot rate can
you expect after 2 years, assuming the inflation rates will remain the same over 2
years?
a. Rs. 66.85
b. Rs. 80.81
c. Rs. 70.09
d. Rs. 77.07
19. A buy signal provided by moving average analysis of stock prices is when the stock
price line
a. rises above a falling moving average line
b. falls below a flattening moving average line.
c. falls below a falling moving average line
d. falls below a rising moving average line
20. X imports goods from USA. X will not do the following as a hedging measure:
a. Buy call options
b. Buy currency forward
c. Buy put options
d. Buy currency futures

14
 December – 2023 Syllabus 2016
1. MS. RATRI, a prospective investor has collected the following information pertaining
to two securities A and B.
Particulars Security A Security B
Expected return% 15 18
Standard deviation of return % 18 22
Beta 0.90 1.40
2
Variance of returns on the market index is 335 (%) . The correlation co-efficient
between the returns on securities A and B is 0.75. The systematic risk of portfolio
consisting of these two securities in equal proportions is
a. 24.63(%)2
b. 125.78(%)2
c. 297.56(%)2
d. None of (A), (B) and (C)
2. The current market price of an equity share of THOMAS LTD., is ₹ 500. Within a
period of 3 months, the maximum and minimum price of it is expected to be ₹600 and
₹ 300 respectively. What should be the value of a 3 months call option under ‘Risk
Neutral” method at the strike ret of ₹550 if the risk free rate of interest to 8%
p.a.? [Given e0.02 = 1.0202]
a. ₹ 23.34
b. ₹ 34.31
c. ₹43.31
d. None of the above
3. MS. MOU invested ₹ 50,000 in a mutual fund scheme – SX on 01.04.2022. The capital
gain and divided for the year ₹ 3 per unit which were reinvested at the year end
(31.03.2023). NAV of ₹ 25. Mou had total units of 2,800 as on 31.03.2023. What was
the NAV as on 01.04.2022?
a. ₹10
b. ₹15
c. ₹20
d. None of the above
4. MR. BUA is a forex dealer in India. Rates of rupees and Euro in the International
market rate are US $ 0.0124688 and US $ 1.092694 respectively. What will be his
direct quote of (€) euro to his customers?
a. ₹88.91
b. 88.32
c. 87.63
d. 80.90

15
5. NOBOB Ltd., has been evaluating investment in a project which will require ₹ 40 lakh
capital expenditure on a new machinery. The company expects the capital investment
to provide annual cash flows of ₹ 9 lakh per year after taxes indefinitely. The
business risk of the investment decision requires a 15 percent discount rate. The
base case NPV for NOBON Ltd’s project will be
a. ₹25 lakh
b. ₹20 lakh
c. ₹ 18.50 lakh
d. None of the above
6. The stock of ANOS Ltd. (FV ₹ 10) quotes ₹500 on NSE and the 3 months future
price quotes at ₹510. The borrowing rate is given as 15% p.a. what would be the
theoretical price of 3 months ANOS Ltd. future if the expected annual dividend yield
is 25% p.a. payable before expiry?
a. ₹ 540.50
b. ₹ 516.25
c. ₹ 510.50
d. Insufficient data
7. The portfolio composition of Mr. SANU is given below:
(Amount in ₹ lakh)
Equity 120
Cash / Cash equivalents 40
Total 160
The beta of the equity portion of the portfolio is 0.85 and the current NIFTY future
is at 4261.5. The multiple attached to NIFTY future is 100. If Mr. SANU purchases
23 future contracts, his portfolio beta will be
a. 1.05
b. 1.12
c. 1.20
d. 1.25
8. Buying a call and put with the same expiry date, on the same stock with a different
strike price is a
a. Strangle
b. Straddle
c. Strap
d. Strip
9. P an Q are two mutually exclusive projects. P has a higher initial fixed cost and will
make a profit of ₹ 10,000 for a high ale s volume and a loss of ₹ 4,000 for a low sales
volume. For Q the corresponding amounts would be a profit of ₹ 7,000 or a profit of

16
 ₹2,000. The probability of high sales volume is 60%. The expected value of perfect
information is
a. ₹ 9,000
b. ₹ 6,800
c. ₹ 12,600
d. ₹ 10,200
10. Which one of the following is true?
a. Systematic risk can be minimized by investing in many sectors like banking, real
estate and food products.
b. Government securities are free from interest rate risk.
c. The market rewards an investor in proportion to the unsystematic risk that he
is willing to take.
d. Systematic risk is independent of the industry to which a security belongs.

December – 2023 Syllabus 2022

1. A project of ROBN Ltd. has a net present value (base case NPV) of ₹ 1,50,000. This
project has one financial side effect; it expands the firm’s borrowing power by ₹
5,00.000. The project lasts indefinitely so it is treated as supporting perpetual debt.
If the borrowing rate is per cent and the net tax-shield is 35 percent, the adjusted
net present value (ANPV) o0f the project will be
a. ₹ 3,25,000
b. ₹ 3,10,000
c. ₹ 2,88,000
d. None of the above.
2. ABON Ltd’s earning per share is ₹15 and growth rate of earning is 5%. The earnings
growth rate is expected to stay at this level in the near future. It its payout ratio
is 50% and costs of capital is 15%, what will be the market price of the share after
three years?
a. ₹ 95.50
b. ₹ 91.16
c. ₹ 90.20
d. None of the above
3. The expected return from a portfolio is 6% and its variance of return (Risk squared)
is 285%. If the investor’s tolerance is 60; the risk penalty will be
a. 5.80%
b. 4.95%
c. 4.90%
d. 4.75%

17
4. The following particulars relate to a mutual fund scheme:
Sector Investment in shares Index on Index on
(at cost) ₹ lakh purchase date valuation date
IT and ITES 28 1,750 2,950
Infrastructure 15 1,375 2,475
The outstanding number of units is 1.25 lakhs. What will be the net asset value (NAV)
per unit?
a. ₹ 59.36
b. ₹ 55.30
c. ₹ 54.31
d. ₹ 53.29
5. If the director of COMTECH Ltd. Who had access to inside information is unable to
use this information to make Supernormal profits, its is a sign of
a. Weak form of efficient market hypothesis.
b. Semi-strong from of efficient market hypothesis.
c. Strang form of efficient market hypothesis.
d. Incompetence of the director.
6. EYAN Ltd. (EL) has a Beta of 0.80 with BSE 300. Each BSE 300 futures contracts
is worth 100 units. BINUA anticipates a bearish market for the next three months
and has gone short on share of 25000 shares of EL in spot market. EL shares are
traded at ₹ 100.3 3 months’ Future BSE 300 is quoted at 15500. What are the
numbers of BSE 300 futures contracts to be taken by BINUA if she wants to hedge
price risk to the extent of 125%?
a. 300
b. 250
c. 240
d. 200
7. Buying and selling a call and a put option with same strike prices and same expiry
date is called
a. Straddle
b. Box spread
c. Strip
d. Butterfly spread
8. When the trade open on 01.03.2023 the stock price of Roles Ltd., is ₹ 250. It rises
to ₹ 260. The March 2023, call option on Rolex Ltd. started at ₹ 25. It moved to ₹
29. The Delta of call option of Rolex Ltd. would be ______.
a. 0.50
b. 0.40

18
 c. 0.35
d. Insufficient information
9. The slope of the security market line (SML) denotes
a. The risk premium required
b. Beta of the security
c. Market volatility
d. The influence of the unsystematic
10. Which of the following is/are the benefit(s) of unified payment interface (UPI) to
the merchants?
a. Round the clock availability
b. Single click authentication
c. Safer, secured and innovative
d. In-App Payments (IAP)
11. In porter’s structural analysis, which of the following is not considered as an entry
barrier?
a. Product differentiation
b. Switching costs
c. Capital Requirements
d. Low value addition
12. Which one of the following is not a digital asset?
a. Digital printing
b. Website
c. Stable coin
d. Fintech
13. The 90-day interest rate is 1.85% in USA and 1.35% in the UK and the current spot
exchange rate is $ 1.6 / 1 £. The 90-days forward rate is
a. $ 0.62808
b. $ 1.592145
c. $ 1.607893
d. $ 1.342132
14. ZONS Ltd. shares are traded in the stock market. The standard deviation of Zons’s
shares and the market are 6% and 4% respectively. If the correlation Co-efficient
for the shares with the market is 0.8, what will be Beta Co-efficient of the company’s
shares based on the CAPM?
a. 0.90
b. 1.00
c. 1.20
d. 1.50

19
15. RTZ Ltd. wishes to earn real rate of 10% from its project: When the inflation
recorded is 70%, what is the normal rate the company would earn?
a. 16.60%
b. 17.70%
c. 18.20%
d. None of the above

20
 December – 2017 Syllabus 2012

Question 1
i. An investor buys a call option contract for a premium of ₹ 150. The exercise price
is ₹ 15 and the current market price of the share is ₹ 12. If the share price after
three months reaches ₹ 20, what is the profit made by the option holder on
exercising the option? Contract is for 100 shares. Ignore the transaction charges.
ii. Mr. Ravi Kumar can earn a return of 18% by investing in equity shares on his own.
Now he is considering recently announced equity based mutual fund scheme in
which initial expenses are 6.70% and annual recurring expenses are 1.7%. How
much should the mutual fund earn to provide Mr. Ravi Kumar a return of 18 per
cent?
iii. CNX Nifty is currently quoting at 9100. Each lot is 75. An investor purchases a
May Futures contract at 9200. He has been asked to pay 5% margin. What amount
of initial margin is he required to deposit? To what level NIFTY futures should in
increase to get a gain of 4%?
iv. The strike price and the current stock price of a European put option are ₹ 1,000
and ₹ 925 respectively. Compute its theoretical minimum price after 6 months, if
the risk-free rate of interest is 5% p.a.
v. P Ltd. has an EPS of ₹ 75 per share. Its Dividend Payout Ratio is 30%. Earnings
and dividends of the company are expected to grow at 6% per annum. Find out the
cost of equity capital if its market price is ₹ 300 per share.
vi. An investor has three alternatives of varying investment values. The data available
for each of these alternatives are given below:
Alternative Expected Return (%) Standard Deviation of Return
I 23 8.00
II 20 9.50
III 18 5.00
Which alternative would be the best if coefficient of variation is used?
vii. A student ordered a book from USA on 01-05-2017 for $ 90, when the spot rate
was ₹ 68.50/$. Payment was made ten days later, on 11-05-2017 when the book
was delivered. By this time, the rupee had appreciated by 10%. How much did it
cost the student in Rupees? (Ignore transaction and delivery cost).
B. State whether the following are 'True' or 'False'. (You may write only the question
Roman numeral and state whether True or False without copying the statements into
the answer books)
i. The risk free interest rate in the futures market is called repo rate.
ii. Proxy Beta is the beta of an unlevered firm.
iii. CAPM gives the expected return based on systematic risk.

21
 iv. If the interest rate is 10% p.a. and the inflation rate is 2% p.a., the investor of
an inflation bond earns 12.20%.
v. The writer of an uncovered call option does not own the underlying stock.
vi. A security is under-priced if the actual return is above the Security Market Line.
Solution:
A.
i. Assuming in call option, the total outgo Premium + Exercise Price = ₹ 150 + (₹ 15 ×
100) = ₹ 1650
After 3 months, if share price is ₹ 2000, the net profit = 2000 – 1650 = ₹ 350.
ii. Let the return on mutual fund be ₹ x. Investors expectation denotes the return
from the amount invested.
𝐼𝑛𝑣𝑒𝑠𝑡𝑜𝑟 ′ 𝑠𝑒𝑥𝑝𝑒𝑐𝑡𝑎𝑡𝑖𝑜𝑛
Return from mutual funds = (100−𝐼𝑠𝑠𝑢𝑒 𝑒𝑥𝑝𝑒𝑛𝑠𝑒𝑠)
+ Annual recurring Expenses
18
Or X = (100−6.7)%
+ 1.7 = 19.29 + 1.7 = 21%
Hence, Mutual fund should earn so as to provide a return of 18% = 21%.
iii. Initial margin=(5%*9200*75)=34500 Gain =4%
Return(4% of Initial Margin)= 1380 Return per unit =1380/75=18.4
Index value should rise to = 9200+18.4=9218.4
iv. Theoretical minimum price = [Present Value of Strike Price – Current Stock Price]
= [1,000 × e-rt)–925 =[1,000 / e0.05 × 0.5] –925 =[1,000 / e0.025]– 925
=[1000/1.02532]-925 = 975.3053-925
=50.3053
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 75 𝑋 30%
v. Ke = + g (Growth rate) = + 6% = 7.5% + 6% = 13.5%
𝑀𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 300
vi. The Co-efficient of Variation is the ratio of standard deviation to mean.
Alternative Expected Return Standard Deviation of Co-efficient of
(%) Return (%) Variation
I 23 8 0.35
II 20 9.5 0.48
III 18 5 0.28
Alternative III is the best as its co-efficient of variation is the lowest.
vii. Rupee is appreciating by 10%,
Value of dollar is =68.5/(1+10%)X90=Rs. 5604.55
B.
i. True
ii. False
iii. True
iv. True
v. True
vi. True

22
 June – 2017 Syllabus 2016
1. Annual Cost Saving ₹ 4,00,000
Useful life 4 years
Cost of the Project ₹ 11,42,000
The Pay back period would be
a. 2 years 8 months
b. 2 years 11 months
c. 3 years
d. 1 year 10 months
1. There are 4 investments
X Y Z U
The standard deviation is 37,947 44,497 42,163 41,997
Expected net present value (₹) 90,000 1,06,000 1,00,000 90,000
Which investment has the highest risk?
a. X
b. Y
c. X
d. U
2. The spot rate of the US dollar is ₹ 65.00/USD and the four month forward rate is
65.90/USD. The annualized premium is
a. 4.2%
b. 5.1%
c. 6.0%
d. 6.4%
3. A stock is currently sells at ₹ 350. The put option to sell the stock sells at ₹ 380 with
a premium of ₹ 20. The time value of option will be
a. ₹ 10
b. ₹ -10
c. ₹ 20
d. ₹0
4. An investor owns a stock portfolio equally invested in a risk free asset and two stocks.
If one of the stocks has a beta of 0.75 and the portfolio is as risky as the market, the
beta of the stock in portfolio is
a. 2.12
b. 2.25
c. 2.56
d. 2.89
5. You are given the following information: required rate of return on risk free security

23
 7%; required rate of return on market portfolio of investment 12%; beta of the firm
1.7. The cost of equity capital as per CAPM approach is
a. 16.3%
b. 18.0%
c. 18.60%
d. 19%
6. The following statement is true in the context of rupee-dollar exchange rate with ri
denoting interest rate in India and ru denoting interest rate in the US.
a. Rupee will be at forward discount if ri > ru
b. Rupee will be at forward premium if ru > ri
c. Rupee will be forward premium if ri > ru
d. Rupee will be at par with dollar if ri = ru.
7. The following is not a systematic risk.
a. Market Risk
b. Interest Rate Risk
c. Business Risk
d. Purchasing Power Risk
8. The following statement is true:
(If ‘r’ denotes the correlation coefficient)
a. r = +1 implies full diversification of securities in a portfolio
b. r = -1 implies full diversification of securities in a portfolio
c. r = 0 implies an ideal situation of zero risk
d. ‘r’ is independent of diversification. Nothing can be inferred based on r.
9. The following is not a feature of Capital Market Line:
a. There is no unsystematic risk.
b. The individual portfolio exactly replicates market portfolio in terms of risk and
reward.
c. Estimates portfolio return based on market return.
d. Diversification can minimize the individual portfolio risk.

24
 June – 2018 Syllabus 2016
1. A company has ₹ 7 crore available for investment. It has evaluated its options and
has found that only four investment projects given below have positive NPV. All these
investments are divisible and get proportional NPVs.
Project Initial Investment (₹ crore) NPV (₹ crore) PI
W 6.00 1.80 1.30
X 3.00 0.60 1.20
Y 2.00 0.50 1.25
Z 2.50 1.50 1.60
Which investment projects should be selected?
a. Project W in full and X in part
b. Project Z in full and W in part
c. Project W in full and Z in part
d. Project Z and Y in full and X in part
2. An investor is bullish about X Ltd. which trades in the spot market at ₹ 1,150. He
buys two call option contracts with three months (one contract is 100 shares) with a
strike price of ₹ 1,195 at a premium of ₹ 35 per share. Three months later, the share
is selling at ₹ 1,240. Net profit/loss of the investor on the position will be
a. ₹ 1,000
b. ₹ 16,000
c. ₹ 11,000
d. ₹ 2,000
3. Duhita Ltd. intends to buy an equipment. Quotes are obtained for two different
makes A and B as given below:
Cost (₹ Million) Estimate life (years)
A 4.5 10
B 6.00 15
Ignoring the operations and maintenance costs which will be almost the same for A
and B, which one would be chapter? The company's cost of capital is 10%
[Given: PVIFA (10%, 10 yrs.) = 6.1446 and PVIFA (10%, 15 years) = 7.6061]
a. A will be cheaper
b. B will be cheaper
c. Cost will be the same
d. They are not comparable and therefore nothing can be said about which is
cheaper.
4. BLC Ltd. a valued customer engaged in import business, is in need to remit EURO 1
million to his European exporter. The spot rate of ₹/US$ is ₹ 65.47/65.57 and that

25
 of US$/EURO is $ 0.8053/0.8057. What rate will a banker quote to BLC Ltd. if the
bank's margin is 0.50%?
a. ₹ 53.09
b. ₹ 53.067
c. ₹ 53.01
d. ₹ 52.99
5. Given for a project:
Annual Cash inflow = ₹ 80,000, Useful life = 4 years
Undiscounted Pay-Back period = 2.855 years
What is the cost of the project?
a. ₹ 1,12,084
b. ₹ 2,28,400
c. ₹ 9,13,600
d. None of the above
6. A project had an equity beta of 1.4 and is to be financed by a combination of 25%
Debt and 75% Equity. Assume Debt Beta as zero, Rf = 12% and Rm = 18%.
Hence, the required rate of return of the project is
a. 16.72%
b. 18.30%
c. 17.45%
d. 12.00%
7. An Indian Company is planning to invest in the US. The annual rates of inflation are
8% in India and 3% in USA. If the spot rate is currently ₹ 60.50/$, what spot rate
can you expect after 5 years, assuming the inflation rates will remain the same over
5 years?
a. ₹ 88.89
b. ₹ 54.95
c. ₹ 76.68
d. ₹ 76.10
8. Which of the following securities is most liquid?
a. Money Market instruments
b. Capital Market instruments
c. Gilt-edged securities
d. Index futures
9. While plotting a graph with risk on X-axis and expected return on Y-axis, a line drawn
with co-ordinates (0, rf) and (β, rm) is called
a. Security Market Line
b. Characteristic Line

26
 c. Capital Market Line
d. CAPM Line
10. If the RBI intends to reduce the supply of money as part of anti-inflation policy, it
might
a. Lower the bank rate
b. Increase the Cash Reserve Ration
c. Decrease the SLR
d. Buy Government securities in the open market.

27
 June – 2019 Syllabus 2016
1. A company is considering four projects A, B, C and D with the following information:
Project A Project B Project C Project D
Expected NPV (₹) 60,000 80,000 70,000 90,000
Standard deviation (₹) 4,000 10,000 12,000 14,000
Which project will fit the requirement of low risk appetite?
a. Project A
b. Project B
c. Project C
d. Project D
2. From the following quotes of a bank, determine the rate at which Yen can be purchased
with Rupees.
₹/£ Sterling 75.31 – 33
£ Sterling/Dollar ($) 1.563 – 65
Dollar ($)/Yen (¥) 1.048/52 [per 100 Yen]
a. ₹ 124.02
b. ₹ 142.02
c. ₹ 412.02
d. ₹ 214.02
3. The spot Value of Nifty is 4430. An investor bought a one month Nifty 4410 call option
for a premium of ₹ 12. The option is:
a. In the money
b. At the money
c. Out of the money
d. Insufficient data
4. A certain mutual fund has a return of 17% with standard deviation of 3.5% and the
sharpe ratio is 4. The risk free rate is
a. 12.5%
b. 4%
c. 3%
d. 7.5%
5. The following information of a project are given below:
Expected cash flow (₹) Probability
6,000 0.20
16,000 0.80
If certainty equivalent coefficient is 0.7, what will be certain (Risk less) cash flows
of the project?
a. ₹ 12,000
b. ₹ 9,800
c. ₹ 9,000
d. ₹ 15,400

28
6. The spot and 6 months forward rates of US dollar in relation to the rupee (₹/$) are ₹
74.532/75.4143 and ₹ 75.1278/76.2538 respectively. What will be the annualized
forward margin (with respect to Ask price)?
a. 2.42%
b. 1.60%
c. 2.23%
d. 2.31%
7. B can earn a return of 18% by investing in equity shares on his own. Now he is
considering a recently announced equity based Mutual Fund Scheme in which initial
expenses are 1% and annual recurring expenses are 2%. How much should be Mutual
Fund earn to provide B, a return of 18%?
a. 18.18%
b. 20.18%
c. 22.18%
d. 21%
8. You are given the following information of a stock:
Strike Price ₹ 400
Current stock price ₹ 370
Risk free rate of interest 5%
Theoretical minimum price of a European 6 months’ put option after six months is
a. ₹ 9.37
b. ₹ 20.12
c. ₹ 30.76
d. ₹ 20.63
9. MS Ltd. is planning to invest in USA. The annual rates of inflation are 8% in India
and 3% in USA. If spot rate is currently ₹ 75-50/$, what spot rate can the
company expect after 3 years?
a. ₹ 65.49
b. ₹ 79.16
c. ₹ 87.04
d. ₹ 72.00
10. If the covariance between the returns on a portfolio BC and returns on the market
index is 25 and the variance of returns on the market index is 20, what will be the
systematic risk of BC under the variance approach?
a. 1.25
b. 1.56
c. 5.45
d. 31.25

29
 June – 2023 Syllabus 2016
1. A project of Axon Ltd. requires ₹ 30 lakh capital investment and expects perpetual
annual cash inflow after taxes of ₹ 8 lakh. The business risk of the venture requires
a 20 percent discount rate. However, as the project is considered socially desirable it
qualifies for an immediate tax-free government grant of ₹ 10 lakh. What will be the
adjusted net present value (ANPV) of the project?
a. ₹ 25 lakh
b. ₹ 20 lakh
c. ₹ 15 lakh
d. Insufficient information
2. An instrument of debt having investment grade rating by a credit rating agency
a. Implies that the investment is safe and recommends that the investor can go
head and invest in security.
b. Implies that all statutory compliances of the issuing entry are fulfilled.
c. Implies that the investment is sound at the time of issue and the issue price is
reasonable.
d. Implies an opinion of the rating agency that the instrument will pay back the
capital and the stated interest on time.
3. Mr. Shan a trader, is having in its portfolio shares worth ₹ 85 lakh at current price
and cash ₹ 15 lakh. The bets of share portfolio is 1.6. After 3 the price of shares
dropped by 3.20%. If the trader on current date goes for long position on ₹ 100 lakh
Nifty future, what is the value of market index after 3 months?
a. ₹ 95 lakh
b. ₹ 96 lakh
c. ₹ 98 lakh
d. None of the above
4. SMO Mutual fuds has a NAV of ₹ 8.60 at the beginning of the year. Meanwhile fund
distributes ₹ 0.80 as dividend and ₹ 0.70 as capital gains. If the funds return during
the year is 26.16%, the the end of year NAV will increase to __________.
a. ₹9.10
b. ₹9.35
c. ₹ 9.40
d. None of the above
5. The Sharpe’s ratio and the Treynor’s of Reliance growth fund are 0.56 and 9.80,
respectively. The correlation co-efficient between returns of the fund and the
Market- Index is 0.70. What is the standard deviation of the market index’s return?
a. 12.25%
b. 11.14%

30
 c. 10.62%
d. Insufficient parameter’
6. The current market price of an equity share of BANCH Ltd. is ₹ 400 and it is expected
that the stock price after 3 months will be either ₹ 432 or ₹ 360. If the risk free
rate of interest be 12% p.a., what should the value of a ‘3 months’’ call option under
the ‘Risk-neutral’ method at the strike rate of ₹ 388?
[Given. e0.02 = 1.02020. e0.03 = 1.03045]
a. ₹30. 94
b. ₹ 32. 15
c. ₹ 32.98
d. None of the above.
7. While plotting a graph with risk on X-axis and expected return on Y-axis, a line drawn
with co-ordinates (o, rf) and (𝛽, rm) is called
a. Security market line
b. Characteristic line
c. Capital market line
d. CAPM line
8. The project-Z of ZINT Ltd. has a mean NPV of ₹ 600. The project manager of the
company wants to determine the probability of the NBPV of the project under
different ranges. If the standard deviation of NBPV is ₹ 300, what is the probability
of the NPV between the range of ₹ 375 and ₹ 675?
[Given: Area under normal Curve from O to Z]:
Z=O to Z 0.15 0.25 0.50 0.60 0.75 1.25 1.30
Value 0.05962 0.09871 0.19146 0.22575 0.27337 0.39435 0.40320
a. 27.34%
b. 37.21%
c. 40.13%
d. 44.04%
9. The following various currency quotes are available:
₹/£ 104.0215 / 104.5505
£/$ 0.7155 / 0.7195
₹ / 100 ¥ 0.8695 / 0.8710
The rate at which 100 ¥ can be purchased with rupees will be __________.
a. ₹67.37
b. ₹66.50
c. ₹65.52
d. None of the above

31
10. If the reserve bank of India (RBI) intends to reduce the supply of money to brig
down inflation, it might
a. Increase the cash reserve ration (DRR).
b. Decrease the statutory liquidity ratio (SLR)
c. Buy government securities in the open market.
d. Lower the bank rate.

32
 June – 2023 Syllabus 2022 (1)
1. ZOTSON Plc. Ha been evaluating investment in a project which will require ₹ 39 lakh
capital expenditure on a new machinery. The company expects the capital investment
to provide annual cash flows of ₹ 6 lakh per year after taxes indefinitely. The
discount rate, which it applies to invest decisions of this nature, is 14 per cent net.
What will be the Base case NPV for ZOTSON Plc.’s project? (Calculation upto two
decimal points.)
a. ₹ 4.00 lakh
b. ₹ 3.86 lakh
c. ₹ 3.56 lakh
d. ₹ 3.25 lakh
2. SBT company is considering four projects P, Q, R and T with the following
information:
Project A Project B Project C Project D
Expected NPV (₹) 1,20,000 1,60,000 1,40,000 1,80,000
Standard 8,000 20,000 24,000 28,000
Deviation (₹)
Identify the least risky project if coefficient of variation is used:
a. Project P
b. Project Q
c. Project R
d. Project T
3. Which of the following is / are not that component of digital infrastructure and why?
a. APIs and Integrations
b. Cloud services
c. Stablecoins
d. Internet
4. MR. PATOB, a portfolio manager managing a portfolio (Beta 1.50) whose current
market value of ₹ 12 crore. It is expected that the markets are likely to correct
downwards and heading needs to be adopted using NIFTY Index futures. Currently
Index futures are quoted at 8000 with each contract underline s100 units. Mr.
PATOB hedges 100% of his portfolios. What is the number of NIFTY Index
contracts to be sold?
a. 180contracts
b. 200 contracts
c. 225 contracts
d. None of the above

33
5. MR. GORG is a forex dealer in India. Rates of rupee and Euro in the International
market are US $ 0.012572 and US $ 1.117294 respectively. What will be his direct
quote of ∈ (Euro) to his customers? 9calculation upto 3 decimal points).
a. ₹ 85.925
b. ₹88.872
c. ₹89.125
d. ₹90.312
6. Plain Vanilla interest rate swaps involved
a. Fixed to Fixed rate Swap
b. Fixed to Floating rate Swap
c. Floating to Floating rate Swap
d. Currency Swap
7. An option's theoretical value increases by 1.75 if the interest rate is decreased by
1%. Then 1.75 is
a. the Rho of a call option.
b. the Rho of a put option.
c. the Theta of a call option.
d. the Theta of put option.
8. The intercept of the security market line (SML) on the Y-axis is
a. the risk free return.
b. the positive risk premium.
c. the Beta of the security.
d. the expected return when ẞ = 1.
9. MS BRISTI is considering an investment in a Mutual Fund with a 2% load. As another
alternative, she can also invest in a Bank Deposit paying 8% interest. Her investment
planning period is 4 years. Examine, what should be the annual rate of return on
Mutual Fund so that she prefers the investment in the Fund to the investment in
Bank Deposit.
a. 8-15%
b. 8-55%
c. 8-82%
d. None of the above
10. Which one of the following is not a part of Market Risk and why?
a. Equity Risk
b. Inflation Risk
c. Downgrade Risk
d. None of the above

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 June – 2024 Syllabus 2022
1. A project of ZOBM Ltd. requires an initial investment of ₹ 100 lakh and generates
annual cash inflows of ₹ 29.85 lakh for five years. If the risk-free rate of discount is
10% and the premium for the normal risk of the Company is 3%, what is the maximum
premium for abnormal risk that can be earned on this project (using IRR method)?
[Given: PVIFA (13% 5 yrs.) = 3.52, PVIFA (14%, 5 yrs.) = 3.43 and PVIFA (15%, 5 yrs.)
= 3.35]
a. 0%
b. 2%
c. 4%
d. None of (A), (B) and (C)
2. EZAN Ltd. has on ROE of 18% and a ploughback ratio of 50%. The market
Capitalization rate is 13%. If the coming year’s earnings are expected to be ₹4 per
share, at what price EZAN’s share should sell in 3 years?
a. 15%
b. 11%
c. 4%
d. Insufficient information
3. The expected return of a portfolio ZON is 15%, and variance of return is 280(%)2.
If the investor’s tolerance is 70, what will be the investors utility?
a. 15%
b. 11%
c. 4%
d. Insufficient information
4. SANTIKA project has a mean value of ₹ 11,700. The management wants to determine
the probability of the NPV of the project under different ranges. If the standard
deviation (SD) of the project is ₹ 6,000, what will be the probability of NPV between
₹ 7,200 and ₹ 13,200?
[Given: Area under standard normal curve]
Z = O to Z 0.10 0.25 0.50 0.60 0.75 1.00 1.25 1.50
Table 0.0398 0.0987 0.1915 0.2257 0.2734 0.413 0.3944 0.4332
value
(Calculation up to two decimal points)
a. 17.47%
b. 22.55%
c. 37.21%
d. None of the above.

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5. Ms. RUDRA on 1st August, 2023 during initial offer of AB Mutual fund, invested in
10000 units having face value of ₹ 10 for each unit. On 31st March, 2024, dividend
declared and given by AB Mutual fund was 10%, and Ms. RUDRA found that her
annualized yield was 150%. What is the NAV as on 31.03.2024?
a. ₹ 21
b. ₹ 19
c. ₹ 15
d. None of the above
6. Which one of the following digital financial technologies and technological concepts,
is a type of distributed ledger which provide an order, time stamped and highly
secured record of transactions?
a. Peer to peer technology
b. Enablers
c. Block chain
d. Big data analytics
7. Mr. KAYON a portfolio manager managing a portfolio XB whose current market value
of ₹ 1,800 lakh. It is expected that the market are likely to correct downwards and
hedging needs to be adopted using NIFTY index futures. Currently Index futures
are quoted at 8000 with each contract underlines 200 units. Mr. KAYON hedges
100% of his portfolios. If the number of NIFTY Index contracts to be sold is 180,
what will be the portfolio Beta?
a. 1.60
b. 1.50
c. 1.20
d. None of the above
8. The current price of BCC’s stock is ₹ 1,515 and its is expected that price of the
stock may either go up to the ₹ 1,818 or go down to ₹ 1,212. If strike price of call
option of BCC’s stock is ₹ 1,515 and risk-free rate is 7%, the probability of decrease
in stock price is
a. O.4523
b. 0.3971
c. 0.325
d. None of the above
9. If conclusion and opinions of equity analysts and other experts, based on publicly
available information are reflected in stock prices, then stock market exhibits
a. Weak form of efficiency
b. Semi-strong from of efficiency
c. Inefficiency
d. Both (A) and (B) above

36
10. Which one of the following Greek alphabets with respect to option measure the
sensitivity of options price with respect to its time to expiry i.e. time value of an
option?
a. Delta
b. Theta
c. Rho
d. Vega
11. DAZO Ltd. an export customer who relied on the Inter-bank rate of ₹ / US $ 82.45
/ 10 requested his banker to purchases a bill US $ 90,000. What is the rate to be
quoted to DAZON Ltd., if the banker wants a margin of 0.20% (Calculation upto 2
decimal points)
a. ₹ 81.90
b. ₹ 82.15
c. ₹ 82. 29
d. ₹ 82. 80
12. Which of the following statements is / are true?
i. For a characteristics line, Y-axis represents the retunes for a particulars
security and the X-axis represents the returns for the market Index.
ii. The SML Line is the same as the Characteristics line for an individual security
iii. The slop of the SML is the Beta for the particular security.
a. Only I above
b. ‘Only II above
c. Only III above
d. Only I and II above
13. The concept of securitization is associated with _____.
a. Capital market
b. Money market
c. Debt market
d. Foreign exchange market
14. Which of the following is/are the components of digital finance ecosystem?
a. Digital money
b. Digital assets
c. Digital liabilities
d. A and B of the above
15. MR. KKM, an investor buys a call option contract for a premium of ₹ 150. The exercise
price is ₹ 45 and the current market price of the share is ₹ 42. If the share price
after three months reaches ₹ 50, what is the profit made by the option holder on
exercising the option? Contract is for 100 shares. Ignore the transaction charges.
a. ₹ 450
b. ₹ 350
c. ₹ 375
d. ₹ 400

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