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Question 1

Section B (2 Mark)

Mr. X gives Rs. 200000 to Mrs. X as gift. She invests in a proprietary concern and incurs a loss of Rs. 40000

Options :

A : The loss shall be ignored while computing income of both Mr. and Mrs. X

B : The loss shall be borne by Mrs. X

C : The loss shall not be clubbed

D : This loss shall be clubbed in the hands of Mr. X

Answer: D

Question 2

Section A (1 Mark)

A bank is considering making a loan to Ram Kapoor. Ram has a gross salary per month of Rs40500 but has take-home pay of Rs27500 per month. What aspect of evaluating a consumer loan application is this fact most concerned with?

Options :

A : Character and purpose

B : Income level

C : Deposit balance

D : Pyramiding of debt

Answer: B

Question 3

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 4

Section A (1 Mark)

The proposed Fair Tax would change the U.S. tax system and instead:

Options :

A : Institute a national sales tax

B : Institute a single income tax rate for all taxpayers

C : Would only tax the rich

D : None of the Above

Answer: A

Question 5

Section C (4 Mark)

An investor purchased on margin Alpha Computer for Rs. 30/- a share. The stock's price subsequently rose to Rs. 50/- a share at which time the investor sold the stock. If the margin requirement is 60 percent and the interest rate on borrowed funds was 7 percent, what would be the percentage earned on the investor's funds (excluding commissions)? What would have been the return if the investor had not bought the stock on margin?

Options :

A : 108.47%, 52.36%

B : 106.44%, 66.7%

C : 102.23%, 57.39%

D : 95.26%, 47.27%

Answer: B