WWW.SMUSOLVEDASSIGNMENTS.COM GET BEST QUALITY SOLVED ASSIGNMENTS VISIT WWW.SMUSOLVEDASSIGNMENTS.COM Or Mail us at solvemyassignments@gmail.com YOU MAY CALL US ON - 7506193173 WHATSAPP NUMBER- 9967480770 INTERNAL ASSIGNMENT APPLICABLE FOR SEPTEMBER 2019 EXAMINATION Capital Market and Portfolio Management 1. Consider two risky assets that have return variances of 0.0625 and 0.0324, respectively. The standard deviations of returns on these two assets are 25% and 18%, respectively. Calculate the variances and standard deviations of portfolio returns for an equal weighted portfolio of the two assets when their correlation of return is 1,0.5,0, and -0.5. Discuss the results in relation to portfolio risks. 2. Mr. Ravil wants to invest in the financial market. He often heard about money market securities and capital market securities. You as a financial advisor of Ravil, discuss the types of securities in these markets and share your opinion on which types of market securities are better if his time horizon is short term. 3. a. Shares of L& T are selling for Rs1500. An investor buys 100 shares. After one year the market price is selling for Rs 1650. The investor sells his holding after a year. During the year the company gives dividend of Rs 45 per share. Find out his total return, capital gain, and dividend yield. Would your calculations of return change had the investor not sold the stock 3. b. stock with beta of 0.7 currently priced at Rs 50 is expected to increase in price to Rs 55 by year end and pay a dividend of Rs1. The expected market return is 15 % and the risk free rate is 8%. Evaluate whether the stock is overpriced or underpriced Strategic Cost Management 1. X Ltd has to replace its machine and the production manager has to decide between Machine A and Machine B. Machine A is having installation cost of 160 and annual electric bill 200. Machine B has installation cost of 760 and annual electric bill of 80. If both have life of 8 years which machine will you recommend if interest rate is 9 % for five years. P/V factor @ 9 % for 8 years is 5.5348 2. A company manufacturing two products furnishes the following data for a year. Product Annual Output Units Total machine hours Total No. of purchase orders Total No. of setups A 5,000 20,000 160 20 B 60,000 1,20,000 384 44 The annual Overheads are as under: Volume related activity cost ( Activity driver-Machine hours ) 5,50,000 Setup related cost 8,20,000 Purchase related cost 6,18,000 You are required to calculate cost per unit of each product A & B based on i. Traditional method of charging overhead and
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