Finance
BH2004 NATIONAL UNIVERSITY OF SINGAPORE Semester 2 (2003/2004) Examinations BH2004 FINANCE April 2004 - Time Allowed 2 Hours
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INSTRUCTIONS TO CANDIDATES 1. 2. This examination paper contains SIX (6) questions and comprises TWENTY-THREE (23) printed pages. You are required to answer ALL the questions. Answers should be written on the spaces provided in this examination paper. Be concise and present your answers clearly and legibly. Where calculations are required, show all computations leading to the final answer. If you need more writing spaces, use pages 18-19. The complete set of this examination paper will be collected at the end of the examination. The time value tables are given at the end of the paper. Students may use University-approved calculators. This is a Closed Book Examination.
3. 4. 5.
Marks Recording Space for Lecturers Question 1 2 3 4 5 6 Total Matriculation No.: Marks
-2QUESTION 1 (20 marks)
BH2004
Multiple-Choice: Choose the most appropriate answer for each question and tick (√ ) on the answer sheet on page 5. No marks will be deducted for incorrect answers. (2 marks each) 1. What is the future value in 12 years of $800 payments received at the beginning of each year for the next 12 years? Assume an interest rate of 8.25%. a. b. c. d. e. 2. $14,259.63 $15,408.65 $16,679.86 $18,495.48 $20,782.15
Your portfolio consists of $100,000 invested in a stock that has a beta of 0.8, $150,000 invested in a stock that has a beta of 1.2, and $50,000 invested in a stock that has a beta of 1.8. The risk-free rate is 7 percent. Last year this portfolio had a required rate of return of 13 percent. This year nothing has changed except for the fact that the market risk premium has increased by 2 percent. What is the portfolio's current expected rate of return? a. b. c. d. e. 5.14% 7.14% 11.45% 15.33% 16.25%
3.
The times interest earned ratio is 5.0.
____________________________________________________________
_____________________
INSTRUCTIONS TO CANDIDATES 1. 2. This examination paper contains SIX (6) questions and comprises TWENTY-THREE (23) printed pages. You are required to answer ALL the questions. Answers should be written on the spaces provided in this examination paper. Be concise and present your answers clearly and legibly. Where calculations are required, show all computations leading to the final answer. If you need more writing spaces, use pages 18-19. The complete set of this examination paper will be collected at the end of the examination. The time value tables are given at the end of the paper. Students may use University-approved calculators. This is a Closed Book Examination.
3. 4. 5.
Marks Recording Space for Lecturers Question 1 2 3 4 5 6 Total Matriculation No.: Marks
-2QUESTION 1 (20 marks)
BH2004
Multiple-Choice: Choose the most appropriate answer for each question and tick (√ ) on the answer sheet on page 5. No marks will be deducted for incorrect answers. (2 marks each) 1. What is the future value in 12 years of $800 payments received at the beginning of each year for the next 12 years? Assume an interest rate of 8.25%. a. b. c. d. e. 2. $14,259.63 $15,408.65 $16,679.86 $18,495.48 $20,782.15
Your portfolio consists of $100,000 invested in a stock that has a beta of 0.8, $150,000 invested in a stock that has a beta of 1.2, and $50,000 invested in a stock that has a beta of 1.8. The risk-free rate is 7 percent. Last year this portfolio had a required rate of return of 13 percent. This year nothing has changed except for the fact that the market risk premium has increased by 2 percent. What is the portfolio's current expected rate of return? a. b. c. d. e. 5.14% 7.14% 11.45% 15.33% 16.25%
3.
The times interest earned ratio is 5.0.