CWM_LEVEL_2 Practice Online

Section B (2 Mark)

The risk-free return is 9 percent and the expected return on a market portfolio is 12 percent. If the required return on a stock is 14 percent, what is its beta?

Section C (4 Mark)

Mr. XYZ is bearish about Nifty and expects it to fall. He sells a Call option with a strike price of Rs. 2600 at a premium of Rs. 154, when the current Nifty is at 2694. If the Nifty stays at 2600 or below, the Call option will not be exercised by the buyer of the Call and Mr. XYZ can retain the entire premium of Rs.154.

What would be the Net Payoff of the Strategy?

* If Nifty closes at 2900

* If Nifty closes at 2400

Section A (1 Mark)

In US Over one-half the money spent by state and local governments goes to just three services. Which of the following is not one of these services?

Section A (1 Mark)

The borrower's attitude toward his or her credit obligations is called:

Section C (4 Mark)

Mr. XYZ buys a Nifty Call with a Strike price Rs. 4100 at a premium of Rs. 170.45 and he sells a Nifty Call option with a strike price Rs. 4400 at a premium of Rs. 35.40.

What would be the Net Payoff of the Strategy?

* if Nifty closes at 4200

* if Nifty closes at 5447