FIN622 current paper (may 2010)

Total questions were 32

28 MCQs and 4 Subjective Questions; of 3,3,5 and 5 marks respectively

MCQs were mostly from the attached file

Subjective Questions were:

1) Interest tax shields are valuable, why don't all tax paying firms borrow as much as possible. Marks 5

2) Following table shows the returns on ABC stock 2003-2007. ( Rate of returns were given for all years and we had to calculate variance). Marks 5

3) In ques no. 3 following data was given: Marks 3

Expected rate of return on market portfolio 14%

T-bills yield 6%

Expected return (investor) 10%

Calculate Beta of stock=?

4) Differentiate b/w systematic and unsystematic risk. Marks 3