Today Paper (27-05-2010)
My paper of Fin622 held on 26th May:
Total questions were 32
28 MCQs and 4 Subjective Questions; of 3,3,5 and 5 marks respectively
MCQs were mostly from the attached file
Subjective Questions were:
1) Interest tax shields are valuable, why don't all tax paying firms borrow as much as possible. Marks 5
2) Following table shows the returns on ABC stock 2003-2007. ( Rate of returns were given for all years and we had to calculate variance). Marks 5
3) In ques no. 3 following data was given: Marks 3
Expected rate of return on market portfolio 14%
T-bills yield 6%
Expected return (investor) 10%
Calculate Beta of stock=?
4) Differentiate b/w systematic and unsystematic risk. Marks 3
Today Paper (26-05-2010)
Q:1 what is the difference between systemetic risk and un-systemetic risk ? 3 marks
Q:2 why wheighted average cost of capital of a levered firm is lesses than tht of an un-levered firm ? explain briefly . 3 marks
Q:3 the rates of return of 5 years were given and value of varience was asked . 5 marks
Q:4 how can you measure and interpret the market risk (beta) of a security . 5 marks
Total questions were 32
28 MCQs and 4 Subjective Questions; of 3,3,5 and 5 marks respectively
MCQs were mostly from the attached file
Subjective Questions were:
1) Interest tax shields are valuable, why don't all tax paying firms borrow as much as possible. Marks 5
2) Following table shows the returns on ABC stock 2003-2007. ( Rate of returns were given for all years and we had to calculate variance). Marks 5
3) In ques no. 3 following data was given: Marks 3
Expected rate of return on market portfolio 14%
T-bills yield 6%
Expected return (investor) 10%
Calculate Beta of stock=?
4) Differentiate b/w systematic and unsystematic risk. Marks 3
Today Paper (26-05-2010)
Q:1 what is the difference between systemetic risk and un-systemetic risk ? 3 marks
Q:2 why wheighted average cost of capital of a levered firm is lesses than tht of an un-levered firm ? explain briefly . 3 marks
Q:3 the rates of return of 5 years were given and value of varience was asked . 5 marks
Q:4 how can you measure and interpret the market risk (beta) of a security . 5 marks
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