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MGT201 VU Mid term Papers Spring May 2012

Subjective questions MGT 201 on 18 May 11

1. Suppose there are 2 stocks in your investment portfolio,

Value of investment Expected IRR
A
40
30
B
60
20
Total
100
Calculate the expected portfolio return

2. You want to start your business so you approach a bank. The bank offers you to lend you Rs. 10000 and you sign a bond paper. The bank asks you to issue a bond in their favor on the following requirement by bank.
Par value = Rs, 100000
Maturity = 2 years
Coupon rate = 12% Mark up paid at the end of each year
For the bank

What is the value of investing in a bond with that bank has opportunity cost of 10%.

3. Why does diversification reduce risk  ?

4. What are the effects of changes in macro interest rates on the portfolios of the bonds?

All the mcqs were known as they were from previous papers

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