INV2601 EXAM PACK 2022 (Questions and Solutions)

INV2601 EXAM MAY/JUNE 2022 SOLUTIONS




QUESTION OPTION EXPLANATION


1



= 60.6%


2 B F =So(1+r) t

= 200(1.08)1 = R216


3 C


= 1 373.22 + 1 102.96 – 2(1 225.69)
2(1 225.69) (0.0152)

= 22.8/0.5516

= 44.95

V- Vo V+
N 40 40 40
I/YR 5,25% 6% 6,75%
PMT 75 75 75
FV 1000 1000 1000
PV 1 373,22 1 225,69 1 102,96

4 A Co = Po + X/(1+r) t – So

= 3 + 70/(1.06)9/12 – 68

= 3 + 67 – 68
=2


5 D 1.95


6 A N = 40 (20x 2)
I/YR = 4 (8/4)
PMT = 0
FV =1000
PV = 208.29

, 7 C Upward sloping
8 B 20.84 : 0.33%

9 B

= 12 – 2
85 – 75

=1


10 C

= 0.295/ (0.45 * 0.70) = 0.94

11 B OTC features do not include being tradable in financial instruments
12 C Port D
13 D Diversification
14 B Sigma Rho

15 B ERp = (6 *0.6) +(14*0.4) = 9.20%


16 A Attributes of a bond include:
• Term to maturity
• Coupon rate
• Principal value
• Yield to maturity
• Price

17 D
18 B Closs to R65

19 B Interest rate swap


20 C Interest rate anticipation
• This is the riskiest strategy because the investor must act on
uncertain forecasts of future interest rates.
• They are designed to preserve capital when interest rates rise
(and bond prices fall) and to get as much capital appreciation
as possible when interest rates decline.

21 D


22 A

ERc = (2 *0.5) +(8 *0.3) +(14 *0.2) = 6.20%