Question 1

Section A (1 Mark)

An arbitrage opportunity exists if an investor can construct a __________ investment portfolio that will yield a sure profit.

Options :

A : Positive

B : Negative

C : Zero

D : All of the above

Answer: C

Question 2

Section A (1 Mark)

The proposed Fair Tax would change the U.S. tax system and instead:

Options :

A : Institute a national sales tax

B : Institute a single income tax rate for all taxpayers

C : Would only tax the rich

D : None of the Above

Answer: A

Question 3

Section A (1 Mark)

The borrower's attitude toward his or her credit obligations is called:

Options :

A : Capacity.

B : Capital.

C : Character.

D : Collateral.

Answer: C

Question 4

Section B (2 Mark)

Babu Lal sold his residential house on 28-06-2010 and made a long term capital gain of Rs. 372229. He purchased a new house on 22-10-2010 for Rs. 360000 which is again sold for Rs.620000 on 16-6-2011. He purchased another house on 20-12-2011 for Rs.786000. Calculate the exemption available u/s 54 for the assessment year 2012-13. [CII-12-13: 852,11-12: 785,10-11:711]

Options :

A : Rs.786000

B : Rs.360000

C : Rs.372229

D : Nil

Answer: D

Question 5

Section A (1 Mark)

From the following data calculate the expected rate of return of a portfolio in which A and B has weights equally:

Options :

A : 12

B : 17

C : 14

D : 11

Answer: C