Question 1

Section B (2 Mark)

NRIs are granted a special benefit by way of an option of being taxed at concessional tax rate of ________ as regards 'investment income' and _______ as regards 'long term capital gains' arising from 'specified assets.

Options :

A : 20% and 10%

B : 15% and20%

C : 12% and 10%

D : 10% and 15%

Answer: B

Question 2

Section B (2 Mark)

A bond has a market value of Rs100,000 and a duration of 9.42. What is the price value of a basis point?

Options :

A : Rs 94.20

B : Rs 9.42

C : Rs 942

D : Rs 9420

Answer: A

Question 3

Section C (4 Mark)

Mr. Peter sells a Nifty Put option with a strike price of Rs. 4000 at a premium of Rs. 21.45 and buys a further OTM Nifty Put option with a strike price Rs. 3800 at a premium of Rs. 3.00 when the current Nifty is at 4191.10, with both options expiring on 31st July.

What would be the Net Payoff of the Strategy?

* If Nifty closes at 3800

* If Nifty closes at 4500

Options :

A : -81.55 and 18.45

B : -81.55 and 18.55

C : 0 and -81.55

D : -181.55 and 18.45

Answer: D

Question 4

Section C (4 Mark)

Assume the following;

With this agreement, every 6 months, the transfer of funds takes place between fixed rate payer and floating rate payer.

What would Net Cash flows after 6-months from the initiation date?

Options :

A : $15,00,000 from Fixed-Rate to Floating-Rate Payer

B : $12,50,000 from Fixed-Rate to Floating-Rate Payer

C : $14,50,000 from Floating Rate Payer to Fixed Rate Payer

D : $10,50,000 from Floating Rate Payer to Fixed Rate Payer

Answer: B

Question 5

Section A (1 Mark)

Which of the following statement is correct?

Options :

A : The doctrine of adhesion states that you can bargain or ask insurer to change the terms of the insurance contract as per your needs.

B : While applying for life insurance, it becomes your duty to disclose your past illnesses to the insurer, according principle of utmost good faith

C : While applying for life insurance, it becomes your duty to disclose your past illnesses to the insurer, according principle of insurable interest

D : While applying for life insurance, it becomes your duty to disclose your past illnesses to the insurer, according principle of subrogation

Answer: B

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