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FIN630 VU Current Midterm Fall 2012 Paper 11 December 2012

Fin630 VU Current Midterm Fall 2012 Paper  11 December 2012

 Q1 Differentiate between Load funds and no-load funds. (Marks 3)

Q2 Why P/E ratio tends to be high, if interest rate and inflation is low? (Marks 3)
Q3 Write down the difference between top-down analysis and bottom-up analysis. (Marks 5)
Q4 Outline the rationale for passive strategy. (Marks 5)
Another Paper:
Q1 What is meant by the term Net Asset Value(NAV) ( (Marks 3)
Q2 what is the purpose of ratio analysis (Marks 3)
Q3 What is the difference between the fund value and Growth value ? 5 marks

Another Paper:

Subjective portion from past papers but some MCQ are new

1. The notion that one dollar received today is more valuable than one dollar received

tomorrow is usually called

Liability
Equity
Time value of money
Present value

2. Operating, investing and financing activities are activities of

Cash flow statement
Income statement
Balance sheet
Statement retained earning

3. All are the following are cash flow statement activities except

Operating
Investing
Payable
Financing

Subjective portion

29. What is the purpose of income statement? (3)

30. Why P/E ratios tend to be high when interest rate and inflation is low? (3)

31. Differentiate value fund and growth fund (5)

32. A company is paying $0.60 in dividends and the required rate of return is 6%.Company is selling the stocks at $12. Assume 2% growth rate. Figure out the current value of the stock. By keeping in view your answer Explain whether the stock is overvalued or undervalued. (5)

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