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
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?