Exam (elaborations)
INV2601 EXAM PACK 2025 {DETAILED QUESTIONS AND ANSWERS }
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INV2601 EXAM PACK 2025 {DETAILED QUESTIONS AND ANSWERS }
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lOMoAR cPSD| 48680473INV2601/201/3/2023
Downloaded by Vincent kyalo (norachloe17@gmail.com)
, lOMoAR cPSD| 48680473
INV2601/201/3/2023
Question 1: The correct answer is
option 2.
HPR = Ending value of investment
Beginning value of investment
= 18345
1353
0 =
1.3559
Annual HPR = 1.35591/5
= 1.35590.20
HP
10BII
Input Function
End
mode BEG/END
1.3559
Shift
Key
yx
0.20
=
1.0628
Downloaded by Vincent kyalo
, lOMoAR cPSD| 48680473
INV2601/201/3/2023
Annual HPY = 1.0628 –1 = 0.0628 × 100 = 6.28%
Question 2: The correct answer is
option 3.
A stop-buy order is used by a short seller who wants to
minimise any loss if the share increases in price. A stop-buy
order is placed above the current market price. Limit orders can
have market price as the limit and they are used when lack of
liquidity is a concern. The other statements are correct.
Question 3: The correct answer is
option 3.
𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑑 𝑟𝑎𝑡𝑒 𝑜𝑓 𝑟𝑒𝑡𝑢𝑟𝑛 (𝑘) = 𝑟𝑓 + 𝛽(𝑟𝑚 − 𝑟𝑓)
= 6 + 1.2(12 − 6)
= 13.20%
Question 4: The correct answer is
option 1.
3
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑎𝑦𝑜𝑢𝑡 𝑟𝑎𝑡𝑖𝑜 =
4.80
= 0.625
Downloaded by Vincent kyalo (norachloe17@gmail.com)
, lOMoAR cPSD| 48680473
INV2601/201/3/2023
1 − 0.625 = 0.37
𝐺𝑟𝑜𝑤𝑡ℎ 𝑟𝑎𝑡𝑒 (𝑔) = 𝑅𝑅 × 𝑅𝑂𝐸
= 0.37 × 16%
= 6%
Question 5: The correct answer is
option 4.
𝐸
𝑉0 =
𝑟
4.80
=
0.1320
= R36.36
Question 6: The correct answer is
option 4.
A parallel shift of the security market line (SML) is caused by
changes in the nominal risk-free rate of return.
Question 7: The correct answer is option .
Debt ratio can be calculated as total debts divided by total
assets.
Downloaded by Vincent kyalo
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