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Q.1 What do you understand by investment? Explain steps involved in the investment
decision process. Also briefly explain different investment avenues.
Q.2 (a) Define risk and explain the types of risks involved in investment.
a) Margin trading
b) Short selling
c) Types of orders
Q.6 The current dividend on an equity share of Omega Limited is Rs.8.00 on an earnings
per share of Rs. 30.00. Assume that the dividend per share will grow at the rate of
20 percent per year for the next 5 years. Thereafter, the growth rate is expected to
fall and stabilise at 12 percent. Investors require a return of 15 percent from
Omega’s equity shares.
(ii) Assume that the growth rate of 20 percent will decline linearly over a five year
period and then stabilise at 12 percent. What is the intrinsic value of Omega’s
share if the investors’ required rate of return is 15 percent?
Assignment Guidelines
An assignment should be submitted individually. Group assignment is not
permitted.
Student should mention his/her name, subject, and date of submission
clearly.
An assignment should be either handwritten or printed.
Last date of submission is 1 st October 2010. Late submission shall not
be entertained and will attract penalty in the form of repetition of the
same assignment.