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

Gross Block
566.56
559.61
548.68
536.05
287.25

Less : Accumulated Depreciation
255.10
230.77
143.09
115.60
103.13

Net Block
311.46
328.84
405.59
420.45
184.12

Capital Work-in-progress
1.81
6.04
17.50
21.92
107.66

Investments
15.06
15.10
15.17
15.56
15.00

Net Current Assets






Current Assets, Loans & Advances
294.15
212.93
336.91
311.55
432.13

Less : Current Liabilities & Provisions
214.95
144.53
174.97
186.47
138.20

Total Net Current Assets
79.20
68.40
161.94
125.08
293.93

Total
407.53
418.38
600.20
583.01
600.71

Note :






Contingent liabilities
251.52
261.14
127.39
91.46
284.04






Annexure II





B





END OF part D



part E : Caselets (50 Marks)

· This part consists of ques. with serial number six - 12.

· ans all ques..

· Marks are indicated against every ques..

· Do not spend more than 80 - 90 minutes on part E.

Caselet 1

learn the caselet carefully and ans the subsequent questions:

6. Briefly discuss the different kinds of commonly used duration measures.

(7 marks) < ans >

7. ‘Both replaced Duration and Effective Duration are the ratio of the proportional change in bond value to the parallel shift of the spot yield curve.’ So, is it accurate to presume that both these measures are computed the identical way and both can be used interchangeably for estimating the price change? explain.

(7 marks) < ans >

If 1 asks an avg. person, the meaning of duration, that person would probably respond with reference to time. For example, the duration of a journey or the duration of 1 career. The word duration is from the Latin word dúráre meaning “to last”. Duration in the situation of financial instruments can be described as: the weighted avg. maturity of a bond’s cash flows, where the current values of the cash flows serve as the weights. Investors are subject to interest rate risk on 2 counts – the reinvestment of annual interest and the capital gain/loss on sale of the bond at the end of holding period. This holding period for which interest rate risk disappears is known as the duration of the bond. There are many kinds of duration and it seems as though more kinds are being developed every year. Although duration has historically been based upon explaining price volatility of a series of cash flows, the cause why more kinds of durations are being developed is to represent sensitivities that have nothing to do with interest rate modifications.

Earning:   Approval pending.