SAMPLE
UNIVERSITY COLLEGE OF THE CARIBBEAN
A Member of the Commonwealth & OAS Consortia of Universities
School of Business & Management
Department of Professional Studies
Bachelor of Science Degree
in Business Administration
End of Module Examination
 FALL
 SPRING
 SUMMER
CENTRE
: WORTHINGTON AVENUE
MODULE
: FINANCIAL MARKETS AND ANALYSIS [FIN303]
DATE
: DECEMBER 15, 2014
TIME
: 2:00 PM
DURATION
: 3 Hours
INSTRUCTIONS:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Please read all instructions carefully before attempting any question.
This paper consists of EIGHT (8) printed pages and two (2) Sections A & B
Answer all of Section A and any TWO (2) questions from Section B.
The total marks for this Paper is 60 percent.
All questions must be answered in the answer booklet provided
Please ensure that you number your questions correctly.
Clearly write the number of the question on each of the relevant pages.
Where questions have multiple parts, all parts must be answered.
Start the response to each question on a new page.
Write your REGISTRATION NUMBER clearly on each page of your answer booklet.
DO NOT WRITE YOUR NAME.
NB. Your script will not be marked if it has your name.
DO NOT TURN OVER UNTIL YOU ARE TOLD TO DO SO
1
SAMPLE
Section A- Multiple Choice Questions- 1 Mark each (40%)
MULTIPLE CHOICE QUESTIONS REMOVED.
Section B (Answer any two (2) questions-30% each)
1. Describe the term investment and discuss the principal types of investment
vehicles that exist, also show how the steps in the investment process works and
the different types of investors, with reference to the investing life cycle in
different economic environments. (30 Marks)
2. Identify the basic types of securities markets and describe the IPO process in
relation to the stock market, also explain the characteristics of broker markets,
dealer markets, alternative trading systems, and the general conditions of stock
market markets. What are the difference with the Junior Stock Market and the
Main Stock Market. (30 Marks)
3. Discuss the key sources of risk and the concept of return that might affect
potential investment vehicles, eg. Bonds and dipicting the risk of a single asset,
risk assessment, and the steps that combine return and risk. How does the role of
time value of money measures return with defining a satisfactory investment.
(30 Marks)
END OF QUESTION PAPER
2
SAMPLE
IMPORTANT EQUATIONS
1) Expected Portfolio Return
E(RPortfolio ) = w1 E(R1) + w2E(R2)
2) Investment Variance and Standard Deviation
Variance= σ ²investment =∑[Ri –E(Ri)] ²Pi
COVxy ²investment =√ σ ²investment
3) Calculating Covariance (for a sample)
COVxy = ∑ [Rx –E(Rx)] [Ry –E(Ry)]
n-1
4) Calculating Correlation and Covariance
rxy =
COVxy
σxσx
COVxy = rxy σ x σ x
5) Calculating Variance and Standard Deviation for a Two-Asset Portfolio
Variance= σ ²p = w1² σ 1² + w2² σ 2² +2 w1w2 COV1,2
Variance= σ ²p = w1² σ 1² + w2² σ 2² +2 w1w2 r1,2 σ 1 σ 2
Standard Deviation = σp =√ σ ²p
6) Security Market Line (SML)
E(Ri ) = RF + βi (RM – RF)
βP = w1β1 + w2β2 + w3β3
7) βI = COVi
σ ²M
10) P = __K___
E1
rCE – gE
8) priceB = DIV 1
RB - gdiv
9) Return = V end - V begin - INT
11) rf = rff + E (Infl)
12) r ERP = r CE - r ff
VBegin – VBorrowing
13) Current Yield = Dn
Pn
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