Tuesday, February 15, 2011

Fin622 Final Term Current Paper (Feb 2011)

Fin622 Final Term Current Paper (Feb 2011)

Today i give fin622 paper it was not so easy most mcqs were from past paper but subjective was very tough.here are some subjective question
1:Analyze credit policies and explain these
Policy collection
credit period
discount
credit standarlization.

2:what is meant by payoff ?
3:If american exporter sold goods to pakistani importer and pakistani importer promised to american that he will pay amount after 3 month.then what will be the currency risk or currency effect will be made for american exporter?

4:How a firm can create a money market hedge against transaction exposure,when the firm has to make a payment at some future date?
aur financial feasibility se relative koi question aye the sorry i forget.
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Another Paper:

Q: Type of merger and how companies reduce risk in merger (3 marks )
Q: Difference between the following : (5 marks )

Credit period
Credit standard
Collection period
Discount

Q: Method of valuation of share in merger & acquisition (5 marks) 
Q: Suppose a firm is planning to borrow some amount in a short-term period. How this firm can create a hedge against rising interest rates? (5 marks)
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Another Paper:

Describe briefly anti-takeover tools used by target firms to terminate the predator's attack. 3

A firm is facing cash shortage. Firm can get short term loan from bank annual interest on bank loan is 18% and also firm can delay payment to supplier which terms 2/10 net 60. in your opinion what firm should do? 3

What is mean by long position and short position of foreign currency traders in the currency market? 5

. Suppose a firm is planning to borrow some amount in a short-term period. How this firm can create a hedge against rising interest rates? 5 marks

How a firm can create a hedge against interest rate risk? Explain briefly. 5 marks

The Inventory Manager of a firm has given the following data: 5

Consumption per Period = S = 4000 Units

Economic Order Quantity = EOQ = 80 Units

Lead Time = L = 1 Month

Stock out Acceptance Factor = F = 1.10

Requirement:

Determine the Economic Order Point for the firm
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Another Paper:

1. What are the costs and benefits of holding inventories? 3 Marks
2. How it is decided to exercise an Option Contract or allowed it to lapse? Briefly explain. 3
3. Enlist the anti-takeover measures to be taken by a Target company to resist a takeover bid of the predator company. 3
4. What is the payoff to buyers and sellers of call and put options? 5
5. The Inventory Manager of a firm has given the following data: 5

Consumption per Period = S = 4000 Units

Economic Order Quantity = EOQ = 80 Units

Lead Time = L = 1 Month

Stock out Acceptance Factor = F = 1.10 

Requirement:

Determine the Economic Order Point for the firm.
Solution

EOP = SL + F *sqrt(S x EOQ x L) 

Where 

S= Consumption per Period 

L= Lead Time 

F= Stock out Acceptance Factor 

EOQ = Economic Order Quantity 


EOP = 4000 x 1+ 1.10 * sqrt(4000 x 80 x 1) 

EOP = 4000 + 1.10 * sqrt(320,000) 

EOP = 4000 + 1.10 (565.68) 

EOP = 4000 + 622.25 

EOP = 4622.2.

6. How much should you pay for a bond with Rs.1,000 face value, a 14 percent coupon rate, and five years to maturity if your appropriate discount rate is 10 percent and interest is paid semiannually? 5

Please Check This Solution…. Time was short…. Jo zehen mein aya Kar aya…

Face Value = 1000

Coupon Rate = 14%

Years to Maturity = 5 years

ROR = 10%

Present Value = 140/(1+10%/2)^2 + 140/(1+10%/2)^4 + 140/(1+10%/2)^6 + 140/(1+10%/2)^8 + 140/(1+10%/2)^10 + 1000/(1+10%/2)^10

= 126.98 + 115.178 + 104.47 + 94.76 + 85.95 + 613.91 = 1141.25

7. Enlist the share valuation methods for Mergers & Acquisition. 5
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Another Paper:

How Short-Term Interest rate future are Priced? Explain With help of Some Examples? (3 Marks)

Enlist the Anti-Takeover Measure to be taken by a Target Company to resist a Takeover Bid of the Predator Company.
(3 Marks)

Acquiring Companies often prefer Purchase Mergers to Consolidation Merger. Why? 
(3 Marks)

How Forward Rates are Determined in foreign Currency Market? Explain Briefly.
(5 Marks)

How a Multinational Firm could reduce Political Risk?
(5 Marks)

Differentiate Between the Following Variable of a Credit Policy: (5 Marks)

1) Credit Period
2) Credit Standard
3) Collection Policy
4) Discounts

Suppose You Invest Rs 400,000 in Treasury bill and Rs 600,000 in Marketable Portfolio. What is the Return on your Portfolio, If bills yield 6% and the Expected Return on Market is 14%. What does return on this Portfolio imply for Expected Return on Individual Stock with Beta of 0.6? (5 Marks)
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Another Paper:

Q: Type of merger and how companies reduce risk in merger (3 marks )
Q: Difference between the following : (5 marks )

Credit period 
Credit standard 
Collection period 
Discount 

Q: Method of valuation of share in merger & acquisition (5 marks) 
Q: Suppose a firm is planning to borrow some amount in a short-term period. How this firm can create a hedge against rising interest rates? (5 marks)

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