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

Sell


You are needed to

a. organize the above limit orders and prepare the order book as displayed on the screen.

b. Show the price matched by the computer for the subsequent following orders.

No.
volume
Action
Order kind
Price

1
2000
Buy
Market order


2
2000
Sell
Market order


3
6000
Buy
Limit order
187.70

4
500
Sell
Limit order
188.15

5
6000
Buy
Market order


6
10000
Sell
Market order


7
2000
Sell
Limit order
188.00

8
4000
Sell
Limit order
187.90

9
6000
Sell
Limit order
187.80

10
5000
Buy
Market order

(With stop loss order of Rs.187.55)


11
1000
Sell
Market order



c. compute the true buy price and the impact cost for the transaction no.5 provided in part (b) above. presume the ideal price to be 187.75.

(1 + eight + one = 10 marks) < ans >

5. subsequent table indicates the price of Satyam Computers Ltd., NSE index and the IT industry index of NSE.

Year
Nifty
CNX IT
Satyam

2001
1254.30
2878.36
314.70

2002
1055.30
1807.29
227.20

2003
1100.15
1927.47
279.65

2004
1912.25
2391.19
375.00

2005
2115.00
2969.40
412.50

2006
2810.15
3857.35
721.45


As a tech. Analyst you are needed to

a. Make use of the provided data for analyzing stock of Satyam Computers.

b. Comment on the performance of the company based on part (a).

(3 + two = five marks) < ans >

6. Mr. Prashant will have an annual cash inflow of Rs.4,00,000 for 4 years from the end of 3 years from now. Mr. Prashant wants to invest these receipts in the 10% coupon-bearing bond of the face value of Rs.1,000, maturing after five years, redeemable at par value and is currently traded at Rs.970.

Mr. Prashant has Rs.20,00,000, which he is planning to invest in zero-coupon bonds of two and 10 years respectively. Mr. Prashant wants the replaced duration for these 2 zero-coupon bonds to be identical as for coupon bearing bond above. The coupon bearing bond of two and 10 years maturity have interest rate of 6.5% and 9.00% respectively.

Earning:   Approval pending.