Q2. A company paid dividend of Rs 8 per share in the immediately preceding period. Dividend is expected to grow at 5% for one year, then at 15% rate for the next two years, after which it is expected to grow at a 8% rate for ever. What is the fair price of the share if the required return is 14%? What type of mutual funds will you recommend while formulating the portfolio of investors looking for income and and investors looking for growth ? How will you rate the performance of three mutual funds on the basis of Treynor Ratio and Sharpe Ratio with the given information: Return of MF- X=12% with Standard Deviation of 8% and Beta of 0.8; Return of MF-Y=14% with Standard Deviation of 10% and beta value of 1.2; Return of MF-Z =16% with Standard Deviation of 12% and beta of 1.6. The Return of NIFTY-50 (market index) is 20% with Standard Deviation of 14%. The Return on T-Bills is 6%. Q3. Explain the three forms of Market Efficiency. Also, enumerate the tests that can be done to test weak and semi strong efficiency of stock markets. The return and beta of two stocks that lie on the security market line are as follows. ABC has return of 17% and beta 1.2 and XYZ has return 19% and beta 1.4. What is the required return on PQR with beta of 0.8