ms3034_2026T1_Q1_NA.pdf

Ria invested Rs 10,000 in a fund that tripled her investment 12 years later. What was the approximate annual rate of interest (compounded annually) of the fund?

The GDP deflator in the economy of Arrakis is 120 in the year 2025. If the Nominal GDP is reported as 24,000 units, what is the Real GDP?

Consider a project with an initial investment of Rs 5,000 in Year 0. It generates cash flows of Rs 3,000 in Year 1 and Rs 3,000 in Year 2. If the discount rate is 10%, what is the Profitability Index (PI)?

A company’s stock is currently trading at Rs 500. It is expected to pay a dividend of Rs 25 next year. If the required rate of return is 12% and the dividend is expected to grow at a constant rate, what is the implied growth rate according to the Gordon Growth Model?

An asset earns an annual interest rate of 6% compounded **continuously**. If you invest Rs 2,000 today, what will be the value of the investment after 5 years? (Rounded off to nearest integer)

In the country of Westeros, the nominal interest rate is 10% and the expected inflation rate is 4%. What is the real interest rate in Westeros?

Which of the following statements regarding the Yield Curve is **FALSE**?

You take a loan of Rs 2,00,000 at a monthly interest rate of 1% to be repaid over 2 years (24 months). What is the Equated Monthly Instalment (EMI)? (EMI is the promised equal monthly payment against a loan)

Project A pays Rs 500 forever starting next year. Project B pays Rs 1,000 forever, starting 10 years from today. If the interest rate is 10%, which project has a higher Present Value (PV) today?

Calculate the duration of a bond that pays Rs 500 in 2 years and Rs 1,500 in 4 years.

A consumer basket consists of 2 Apples and 4 Bananas. **2023 (base):** Price of Apple = 10, Price of Banana = 5. **2024:** Price of Apple = 12, Price of Banana = 6. What is the inflation rate in 2024?

An investment offers Rs 7,000 in Year 1 and Rs 6,000 in Year 2. If the current cost of this investment is Rs 10,000, what is the Internal Rate of Return (IRR) approximately?

How long will it take to double your money if the interest rate is 8% per annum (compounded annually)?

You save Rs 50 every day and deposit it into a bank account at the end of the day. The bank pays 7.3% annual interest compounded daily. (Assume 1 year = 365 days). Which formula represents your balance after 1 year?

Sahil earns Rs 50,000 in period 1 and Rs 60,000 in period 2. The interest rate is 20%. What is the Maximum Consumption Sahil can have in Period 1 (if he consumes nothing in Period 2)?

A project has the following cash flows: Year 0: -10000, Year 1: 500, Year 2: 1000, Year 3: 1500, Year 4: 2000, Year 5: 2500, Year 6: 2500, Year 7: 2500. What is the Payback Period?

In 2024, the Nominal GDP of a country increased by 10%, while the Real GDP remained constant. This implies:

Consider a 10-year zero-coupon bond that promises to pay 1000 units after 10 years. The annualized interest rate is 5%. Suppose due to rising uncertainty, the prevailing interest rate increases by 20 basis points to 5.2%. What would be the impact on the value of the bond?

Your portfolio consists of two "Red" bonds, each with a face value of 100 and a probability of default p =10%. The bonds are **perfectly correlated**. Through securitization, you create a Senior Bond (paid first) and a Junior Bond (paid last). What is the probability that the **Junior Bond** defaults?

You go to an art exhibition in 2026 and see a painting is priced at Rs 2,00,000. You search online and find out that the painting was purchased for Rs 200 by a prince in 1926. What is the annualized rate of return that the painting has accrued?

Which of the following yields the highest return on Rs 100 invested for 1 year?

A project earns a total return of 34% over two years. If the return in the first year was 16%, what was the annual return in the second year?

Systematic Investment Plan (SIP) is a popular method of investing by contributing a fixed amount of money at regular intervals. You start an SIP of Rs 24,000 per year (beginning next year) towards a fund that earns 7.5% annual interest. What will be the value of your investment after 20 years?

You are looking to invest in one new project, and you have three

Consider a bond that pays Rs 200 in 3 years, Rs 400 in 6 years, Rs 600 in 9 years, Rs 800 in 12 years and Rs 1000 in 15 years. What is the maturity of the bond?