INV - FULL SUGGESTED SOLUTIONS

INV2601/2021
MOOC EXAM




INV2601
ONLINE MOCK EXAM
SUGGESTED SOLUTIONS
2021

FUNDAMENTALS OF INVESTMENT MANAGEMENT




1
TURN OVER

, INV2601/2021
MOOC EXAM



INV2601 ONILNE MOOC EXAM SUGGESTED SOLUTIONS
2021


Question Correct Solution
Option
1. 2 Current ratio
2. 3 Nominal risk free rate of return
3. 3 𝐾 = 𝑟𝑓 + 𝛽(𝑟𝑚 - 𝑟𝑓 )

0.14 = 0.05 + 𝛽(0.11 − 0.05)
0.14 − 0.05
𝛽=
0.11 − 0.05
𝛽 = 1.5
4. 2
𝐸(𝑅𝐴) =(0.40×23)+ ( 0.30×15)+ ( 0.30×8)
=9.2+4.5+2.4
=16.10%
5. 2 𝛿2=0.4(25−15.25)2+ 0.3(10−15.25)2+ 0.3(7.5−15.25)2
=0.4(9.75)2+0.3(−5.25)2+ 0.3(−7.75)2
=0.4(95.0625)+0.3(27.5625)+0.3(−7.75)
=38.0250+8.2688+18.0188 =64.3126
𝛿=√64.3126
=8.0195
6. 1 𝛿
𝐶𝑉𝐴=
𝐸(𝑅𝐴)

6.26
=
16.6

=0.39
7. 2 𝛿
𝐶𝑉 𝐵 =
𝐸(𝑅𝐵)

2
TURN OVER