Exam Paper Afin253

SEAT NUMBER: ……….… ROOM: .………………. FAMILY NAME.………….....…………………………. This question paper must be returned. Candidates are not permitted to remove any part of it from the examination room. OTHER NAMES…………….…………………..…….. STUDENT NUMBER………….………..……………..

SESSION 1 EXAMINATIONS JUNE 2012
Unit: AFIN253: Financial Management Time Allowed: 2 hours plus 10 minutes reading time. Total Number of Questions: 20 Multiple Choice Questions plus 6 full response questions. Instructions: 1. PART A (60 marks): There are 20 multiple choice questions. Answers to these must be recorded on a red-coloured General Purpose Answer Sheet which will be marked by a computer. Please make sure your name is on this sheet. 2. PART B (60 marks): There are 6 questions. Attempt all questions. Show all workings. Write answers in the spaces provided. Illegible handwriting risks loss of marks. Materials Allowed:  No dictionaries are permitted.  A non-programmable calculator (no text retrieval capacity) is permitted.  Financial calculators may be used.  Mobile telephones must be turned off and left at the front of the room. Question: Out of: Mark:
1

A 60

1 6

2 12

3 8

4 12

5 13

6 9

Total 120

PART A (60 Marks)
There are TWENTY (20) multiple choice questions. Please select the most correct answer for each question. Each question in Part A is worth 3 marks. Record your answers on the computer readable answer sheet. Question 1: Treasury bonds currently have a return of 5%. A stock has a beta of 0.5 and the market return is 10%. What is the expected return of the stock? (a) 5% (b) 7.5% (c) 10% (d) 12.5% (e) 20%

Question 2: You want to buy an apartment worth $500,000. You have saved a deposit of $50,000. The bank has agreed to lend you the $450,000 as a fully amortising mortgage with a term of 25 years. The interest rate is 6% pa and is not expected to change. What will be your monthly payments? (a) 1,500.00 (b) 2,250.00 (c) 2,855.79 (d) 2,899.36 (e) 35,202.02

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