B.Com In Investment Management SEM I 2018 2019 Nov 2019 BASIC OF INVESTMENT WEALTH MGT. CREATION Question Paper - Mumbai University | munotes

Questions asked in this paper

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1. Q3 Working should form part of the answer
2. Q1 A) CHOOSE THE CORRECT ALTERNATIVES FROM THE OPTIONS GIVEN BELOW ANY 8 OUT OF 10. {8} interest is calculated on growing principal
   • a) b) Simple c) both of the above d) none of the above
3. Q2 means production of capital goods annuity is where payment is continuous forever, it is never ending annuity
4. Q4 risk is the possibility investor to experience losses due to the factors that affect the performance of the financial markets in which he is involved
5. Q5 is the difference between value of what, you own (assets) and what you owe is income + (end period value — initial value)/ initial value
   • a) Internal rate of return b) Holding period return c) Net present value d) Effective rate of is the partnership in which some partners (depending on jurisdiction) have 8)A is agreement whereby a person or company agrees to hold the asset for the benefit of others
   • a) Contract b) Trust Lease d) Power of attorney
6. Q9 is the rate when the present value of cash inflow is equal to present value of cash
   • a) Internal rate of return b) Holding period return c) Net present value d) Effective rate of return is the mean annual growth rate of an investment over a specified period of time longer than one year Paper Subject Code: 81501 Basic of Investment & Wealth Creation
   • Q.P. Code: 30074
7. Q1 B STATE WHETHER THE FOLLOWING ARE TRUE OR FALSE. (ATTEMPT ANY 7 OUT OF 10). 7 marks
8. Q1 When the present value of a project is negative it is accepted
9. Q2 Insole proprietorship the liability of the sole proprietor is limited
10. Q3 Money does not have time value
11. Q4 is a contract between an insurance company & an individual in which an insurance company makes a series of guaranteed income payments in return for premium from the
12. Q5 Inspeculation the investor needs to be cautious & conservative
13. Q6 Smart investment goals need not be rewarding
14. Q7 Defensive assets include investments such as cash and fixed deposits
15. Q8 debts consist of loans and financial obligation lasting over one year
16. Q9 Refinance occurs when a business or person revises a payment schedule for repaying debt
17. Q10 In partnership principal-agent relationship is absent
18. Q2 ANSWER THE FOLLOWING QUESTIONS 15 marks
    • A) What is investment? State the features of investment 8
    • B) What is sole proprietorship? State the features of sole proprietorship. 7
    • C) What is debt management? Explain short term and long term debt management. 8
    • D) Distinguish between investment and speculation. 7
19. Q3 ANSWER THE FOLLOWING QUESTIONS 15 marks
    • A) An Investment of Rs 40,000 made on I“ April 2015 provides inflows as follows Which alternative would you prefer if the investors expected return is 10%? Calculate using NPV method. (8 Marks) will be the future value of an investment of Rs 10,00,000 compounded at an interest of 10% p.a for 7 years? (4 marks)
    • ii) Calculate the present value of annuity of Rs 75000 received annually for 5 years when the discounting rate is 10%. (3 marks)
    • C) A project needs an investment of Rs 1,38,500 The cost of capital is net cash inflow are as follows Calculate the IRR and suggest whether the project should be accepted or not? (8 marks) Paper Subject Code: 81501 Basic of Investment & Wealth Creation
    • Q.P. Code: 30074
    • D) i) Mr A has to receive Rs 90000 per year for six years. The present value of annuity is said to be calculated assuming that he can earn interest on his investment @ 12% p.a it) What will be the future value of an investment of Rs 50000 compounded half yearly @ 15% p.a. for 5 years. (3 marks)
20. Q4 ANSWER THE FOLLOWING QUESTIONS 15 marks
    • A) Following is the profit and loss a/c of Milky Way Ltd for the year ended 31/03/2016 To opening stock 2,00,000 By sales 10,50,000 To purchases 5,75,000 | ~~ Returns (50,000) 10,00,000 Returns (25,000) 5,50,000 By closing stock 2,50,000 To gross profit 12,500 By gross profit b/d 2,50,000 To selling expenses 18,750 By profit sale 1,250 To discount allowed 6,250 To bank charges 2,500 To loss on sale of 5,000 Calculate the following ratios 8
    • b) Operating ratio
    • c) profit ratio Avinash borrowed Rs 30000 from.a bank which is to be repaid in 3 years. The loan + interest is to be repaid in equal quarterly instalments. Rate of interest is 10% p.a. Prepare a loan amortization schedule. ( 7 marks) Paper Subject Code: 81501 Basic of Investment & Wealth Creation
    • Q.P. Code: 30074
    • C) Following is the balance sheet of Valia Ltd for the year ended 31/03/2016 2,00,000 Land and building | 8,00,000 Provision for taxation 1,20,000 Preliminary 30,000 Proposed dividend 80,000 Discount of | 20,000 Credit purchases for the year 00,000 Calculate the following ratios 15
21. Q1 Current ratio
22. Q3 Proprietory ratio
23. Q6 Stock to working capital-ratio
24. Q5 ANSWER THE FOLLOWING QUESTIONS 15 marks
    • A) Explain various types of investment risk. 8
    • B) What is wealth erosion? Enumerate various reasons of wealth erosion. 7
25. Q5 SHORT NOTES. ATTEMPT (ANY OF 5) 15 marks
    • a). Refinancing
    • b) Hire purchase
    • e) Wealth protection

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