Ensemble Prometheus Online Round

7/31/2019 Ensemble Prometheus Online Round

http://slidepdf.com/reader/full/ensemble-prometheus-online-round 1/40

Ensemble 2012 new

TRIVIA (30 questions)

1. This happened while he came into existence. What shall we call him?



Ensemble 2012

2. Identify the financial instrument and the company that was acquired with it



Ensemble 2012 3. A bond initially does not make periodic payments but instead accrues them over a pre-determined period

and then pays a lump sum at the end of that period. The bond subsequently makes regular periodic

payments until maturity. Which bond are we talking about?



Ensemble 2012 4. An investor buys two gold futures contracts at $350 per ounce. Each gold futures contract is based on 5000

ounces of gold. At the same time he collateralizes his position by buying the required amount of treasury

bills yielding 3%. Two months later the price of gold is $347.4 and the T-bills mature. What is the net gain orloss on the value of the investor’s collateralized futures position?



Ensemble 2012 5. Company X was found guilty of this scheme. X sold licenses to sell its products to its customers. These

customers further sold these licenses to other people. Company X claimed that its profits were generated

through sale of products and not because of the licenses. However, the profits actually came from selling

the licenses and from the dues paid by the customer. Name the company and the scheme



Ensemble 2012 6. This instrument which is used by nearly everyone today was introduced in the novel “Looking Backward” in

1887. Name it



Ensemble 2012 7. What does Salesforce.com, Dollar Tree, Cerner, Alexion Pharmaceutical have in common?

http://www.forbes.com/sites/scottdecarlo/2012/04/04/americas-best-ceos/www.forbes.com/companies/salesforce/


http://www.forbes.com/sites/scottdecarlo/2012/04/04/americas-best-ceos/www.forbes.com/companies/dollar-tree/


http://www.forbes.com/sites/scottdecarlo/2012/04/04/americas-best-ceos/www.forbes.com/companies/cerner-corporation/







Ensemble 2012 8. What doall these have in common?



Ensemble 2012 9. A famous US president issued some economic directives to reduce inflation in the economy that was later

referred to as X. X was named after the president.What is X?



Ensemble 2012 10. I came into existence 15 years back though in “essence” I was much older than that. My life was estimated

to be 10 years and I was “nearly junked down” 8 years back. I was unique and was I was created to “sit on”

someone’s albums so that the said someone could earn $ 55 million upfront. I was known by two names,

by a well-known musician and by the banker who created me. Who am I? (Two words)





Ensemble 2012 12. Mr. Investor bought securities, hoping to make a profit by selling it in the long run. But then he panicked

and sold it the following day. What is this type of investment known as?



Ensemble 2012 13. The graph below represents the two-year share prices of a company. The company has been in news

recently for various reasons. Identify the company. (Hint: Identify the trend of share price over the given

period).



Ensemble 2012 14. Identify the chart.



Ensemble 2012 15. Reveal the blank!!!



Ensemble 2012 16. Identify



Ensemble 2012 17. Get the answer to the question



Ensemble 2012 18. ‘Tit for Tat’ in the parlance of finance!!!!



Ensemble 2012 19. Link the pictures



Ensemble 2012 20. L V J U W. What are we talking about?



Ensemble 2012 21. X is used to describe an overly Leftist economic policy. What is X?



Ensemble 2012 22. A B.Com student from HR, College Mumbai, and with a track record of 25 years, he has proved that you

don’t need a management degree from a fancy college to run a business. He has driven a Formula 1 car in

France, a Ferrari 360 Modena in a road and track rally across Europe, and a Lamborghini Gallardo in

Europe's CannonBall Run. He also owns a tri-deck luxury yacht constructed entirely out of Burma Teakwood. Who are we talking about?



Ensemble 2012 23. Born in 1930 in Hungary, he has lived through the Nazi occupation of his country as well as Soviet imposed

communism. A graduate from the London School of Economics, he is a self-made and a self-less man. He

became infamous when he shorted $ 10 billion on single currency speculation and shorted a currency

value. Who are we talking about?



Ensemble 2012 24. An Indian investor and trader by profession, and a Chartered Accountant by qualification. The son of an

income tax officer, he started dabbling in stocks while in Sydenham College and plunged into investing as a

full-time profession soon after completing his education. Also described in a magazineas the "pin-up boy of

the current bull run" and by anotheras "Pied Piper of Indian bourses". Who is he?



Ensemble 2012 25. Name this personality

He is the alumni of two prestigious IITs and holds an M.S. degree in Economics. He has joined the civil

service and has extensively written on issues in political economy of reforms, decentralization and public

finance. He also holds an A topper in the All India Civil Service examination for entry into I.A.S. and IndianForeign Services.



Ensemble 2012 26. Name the person connected to the three



Ensemble 2012 27. Connect the Dots

Viacom

Salt

SonyWanted

Time Warner

Hackers



Ensemble 2012 28. We are talking about the inventor of one of the most famous modern day financial instruments who passed

away last year. He was a Soya-bean trader initially and his trading firm, founded in 1977 was acquired by

the Swiss Bank Corporation in 1992. Who is he?



Ensemble 2012 29. The graph represents % growth of X over the period of 1996-2008 for entity Y.

Identify X and Y.



Ensemble 2012 30. Look carefully. There is always a method to the madness!!!!



Ensemble 2012 VALUATION (9 questions)

1. Mind Boggling Ltd. has allotted Rs. 10 lakhs for capital budgeting purposes. The following proposals and

associated profitability indexes have been determined. : [1 mark]

PROJECT AMOUNT PROFITABILITY INDEX

1 300000 1.22

2 150000 0.95

3 350000 1.20

4 450000 1.18

5 200000 1.206 400000 1.05

On the basis of NPV, which of the above proposals should be undertaken? Assume that the projects are

indivisible and there is no alternative use of the money allocated for capital budgeting.



Ensemble 2012 2. Suppose an analyst estimates equity value by discounting free cash flow to equity (FCFE) at the weighted

average cost of capital (WACC) in the FCFE model and estimates firm and equity value by discounting free

cash flow to the firm (FCFF) at the required return on equity in the FCFF model. The analyst would most

likely [1 mark]

A. Overestimate equity value with the FCFE model and underestimate firm value and equity value with

the FCFF model.

B. Underestimate equity value with the FCFE model and overestimate firm value and equity value with

the FCFF model.

C. Underestimate equity value with the FCFE model and underestimate firm value and equityvalue with

the FCFF model.



Ensemble 2012 3. Chamber Group is analyzing the potential takeover of Outmenu Inc. Chamber has gathered the following

data on Outmenu. All figures are in millions of dollars [1 mark]

Particulars 2008 2007 2006 2005Net income -26 34 18 26

FCFE -21 -23 14 -15

FCFF 3 4 6 8

Dividends 5 5 4 4

D/E 93% 91% 78% 84%

The most appropriate model for valuing Outmenu is the:

A. Free cash flow to equity model.

B. Dividend discount model.

C. Free cash flow to the firm model.



Ensemble 2012 4. The average ROE for Lever, Inc. over the last business cycle was 32%. Lever's earnings per share for 2008 is

expected to be $5. The dividend payout ratio is 30%, and the current book value per share is $14. Shares

are trading in the market at $54. Lever's normalized earnings per share are closest to:

A. $4.48.

B. $5.00.

C. $5.26.



Ensemble 2012 5. Which of the following describes the appropriate approach to estimating the WACC for a private company

acquisition? The WACC should be: [1 mark]

A. the target's WACC.

B. the acquirer's WACC.

C. a weighted average of the target's and acquirer's WACC that factors in financing arrangements.



Ensemble 2012 6. An analyst calculates firm value using a single-stage model on December 31, 2007 as: [2 marks]

Value of the firm = FCFE (2008)/(r-g) + MVD

where:

FCFE 2008 = free cash flow to equity forecast for 2008r = required return on equity

g = growth rate in FCFE

MVD =market value of debt on 12/31/2007

Assuming there are no non-operating assets on the balance sheet. The analyst has most likely:

A. correctly calculated firm value.

B. incorrectly calculated firm value. The weighted average cost of capital should be substituted for the required

return on equity.

C. incorrectly calculated firm value. The weighted average cost of capital should be substituted for the required

return on equity, and FCFE2007 (1 + g) should be substituted for FCFE2008.



Ensemble 2012 7. Which of the following groups would be most harmed by the imposition of a tariff on steel imports?

[1 mark]

A. Domestic steel producers.

B. Workers in the domestic auto industry.

C. Workers in the domestic steel industry.



Ensemble 2012 8. An analyst gathered the following information about a company's investment plan:

• Capital budget of$5,000.

• Target capital structure is 70% debt and 30% equity.

• Net income is $4,500. If the company follows a residual dividend policy, the portion of its net income it will pay out as dividends this

year is closest to: [2 marks]

A. 50%.

B. 60%.

C. 67%.



Ensemble 2012 9. A German company's annual pretax earnings are €300. The corporate tax rate on retained earnings is 35%,

and the corporate tax rate that applies to earnings paid out as dividends is 20%. Assuming that the

company pays out 50% of its earnings as dividends, and the individual tax rate that applies to dividends is

30%, calculate the effective tax rate on one euro of corporate earnings paid out as a dividend. [2 marks]



Ensemble 2012 Crossword

Across

2 Took Over Piramal Healthcare

4 A Single Window Clearance for Proposals on FDI in India

5 Automated, Screen-based trading platform of BSE

7 Cash to Shareholders

8 The Falling Wall

9 Smith and Keynes

11 "I provided memories, now I am myself a memory"

12 A measure of finance leverage, demonstrating the degree to which a firm's activities are funded by owner's funds versus creditor's

funds14 Name of a charting method in stock analysis

15 Uncovered put (2 words)

Down

1 Bank Headquartered in Paris

3 Mortgage that has one large payment due on maturity

6 Type of Bond whose owners stand last in line among creditors, but before equity holders, when an issuer fails financially

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Ensemble Prometheus Online Round