Municipality Examination
Finance- Grade XI
Examination - 2079 (2022)
Regular Students
Time - 3 hrs
Full Marks - 75
Pass Marks - 27
Candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate full marks.
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Group 'A'
Very Short answer question.
Attempt all questions. [11x1=11]
1) Define business finance.
2) Write any four features of financial assets.
3) Write the meaning of commercial paper.
4) What is meant by ownership?
5) Differentiate between primary and secondary markets.
6) What is a DEMAT account?
7) Suppose you borrow Rs.50,000 from the bank for one year. Interest on the loan is 13% per year. How much interest do you pay on your loan?
8) State any three functions of microfinance.
9) Write the meaning of risk for example.
10) Differentiate between term life and endowment life insurance.
11) What is the time value of money?
Group 'B'
Short answer question.
Attempt all questions: [8x5=40]
12) Differentiate between profit maximization and wealth maximization objective of finance.
13) Define Company. Explain the major three advantages of a company.
14) The following information is derived from the balance sheet of ABC company.
Share Capital @ Rs.100 each Rs.5,00,000
Additional paid-in capital Rs.3,00,000
Retained earning Rs. 1,00,000
Total debt: Rs.5,00,000
Required:
a) What is the shareholder's equity of the company?
b) What is book value per share? [3+2]
15) Explain the function of the Nepal Stock Exchange (NEPSE).
16) What is cooperative? Write the main function of the cooperative.
17) A life insurance company has 30,000 policyholders. Each policyholder with the age of 40 has Rs.400000 for life insurance. The cost of money is expected death rate of age 40 is per 1000. The cost of money is 8%.
Required:
a) Expected death rate.
b) How much the insurance company pays for the claims for expected death?
c) How much the company charges from the policyholder at the beginning of the policy period?
or
The term life insurance policy of a company is given below:
Amount of term life policy: Rs.900,000
The annual mortality rate is 3.5%
Cost of money=10%
If you are willing to purchase a term life policy, what fair amount of premium you must pay?
18) A mutual fund has 100 shares of ABC company market value of the fund's assets is Rs.20,000 and the market value of the liability is Rs.2000.
a) What is the NAV of the fund?
b) If the market value of assets increased by Rs.5000, what is the new NAV?
19) Simple interest rate on Auto Loan provided by the commercial banks is 14% per year. Calculation of effective interest rate.
i) If interest is compounded semi-annually.
ii) If interest is compounded quarterly.
iii) If interest is compounded monthly.
or
What do you mean by cash flow? Explain the types of Cash flow.
Group 'C'
Long answer question
Attempt all questions. [8x3=24]
20) Consider the following stock quotation for Api microfinance Company.
| Symbol | Close | Vol | Prev. Close | Diff% | 52 weeks High Low |
|
|---|---|---|---|---|---|---|
| AP | 1215 | 22,500 | 1175 | 3.40% | 1305 | 1107 |
a) At what price did the stock close on the trading day?
b) How many shares were traded?
c) How do you calculate the quote "Diff%"? What do items an?
d) What is the highest and lowest price during a year.
or,
Define financial intermediaries. How do financial intermediaries collect saving from saving units?
21) Define insurance and explain the types of life insurance. [2+6]
22) a) Calculate the present value and future value of the following annuities
i) Cash flow Rs.7000 per year for 8 years and discount factor is 10%.
ii) Cash flow Rs.9000 for 7 years in the beginning for at 8% cost of capital.
b) You are planning to borrow Rs.500000 on a year 10% interest rate annual payment fully amortized loan.
i) What is the annual payment of the loan.
ii) Set a loan amortization schedule.
iii) What fraction of payment made at the end of the second year will represent the payment of principles.
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