Capital Markets Summer 2014

Q.1 What qualities are required for successful investing? Q.2 What vital functions does the financial system of money and capital markets perform? Q.3 What are the principal factors affecting the value of any particular foreign currency in

the international exchange markets? Q.4 A chemical company paid a dividend of Rs 2.75 during the current year. Forecasts

suggest that earnings and dividends of the company are likely to grow at the rate of 8 per cent over the next five years and at the rate of 5 per cent thereafter. Investors have traditionally required a rate of return of 20 per cent on these shares. What is the present value of the stock?

Q.5 “Portfolio evaluation essentially comprises two functions, performance measurement

and performance evaluation.” Discuss.