Institute of Chartered Financial Analysts of India (ICFAI) University 2006 Certification Finance Security Analysis – I - Question Paper

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26.
ans : (d)

cause : In futures contract there is no credit risk as the futures clearing house bears the credit risk
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27.
Answer: (c)

Reason:

=62.18

Value of the bond after 4 years = Rs.62.18

Therefore, choice (c) is the accurate ans.
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28.
ans : (c)

cause : All statement are accurate other than statement III. The higher the expected interest rate volatility, the lower the OAS. Similarly the lower the expected interest rate volatility, the higher the OAS.
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29.
ans : (c)

cause : Amount contributed to the sinking fund =

Total payment for the bond = 8% + 6.9% = 14.9%.

Capitalization rate = .
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30.
ans : (d)

cause : Every close-ended scheme launched by the Asset Management Company should be listed on a recognized stock exchange within a period of 6 months from the date of closure of subscription. However, this is not mandatory in certain cases where,

· There is a provision in the scheme for periodic repurchase facility to all the unitholders

· The scheme provides for monthly income

· The scheme opens for repurchase within a period of 6 months from the date of closure of the subscription

· The details of repurchase facility are disclosed in the offer document.

· The scheme takes into account the needs of certain classes of persons like physically handicapped, children etc. with a provision for periodic repurchase of units.
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part B : issues

1. a.

Days
Price modifications



X
Y
X2
Y2
XY

1
1.4500
17.7500
2.1025
315.0625
25.7375

2
16.7500
6.1000
280.5625
37.2100
102.1750

3
-3.0000
6.0500
9.0000
36.6025
-18.1500

4
5.4500
-6.2000
29.7025
38.4400
-33.7900

5
-1.4500
-5.7000
2.1025
32.4900
8.2650

6
8.1500
20.5500
66.4225
422.3025
167.4825

7
5.3500
-2.5500
28.6225
6.5025
-13.6425

8
-1.9500
3.5000
3.8025
12.2500
-6.8250

9
1.1000
2.1000
1.2100
4.4100
2.3100

10
8.0500
-7.9000

Earning:   Approval pending.