question 14

The price of a nil dividend paying share is Shs 200, and there are 30% chances that it would be Shs 190 and 70% chances that it would be Shs Y in two years time. If the expected annual rate of return is 7% per annum, the value of Y is:

Select one:

A. Shs 210.00

B. Shs 327.10

C. Shs 265.70

D. Shs 204.30

question 16

Determine the discounted payback period of machine Alpha that has cashflows occurring evenly during the year as follows:

Year end	Machine Alpha (Shs 000)
0	(1,250)
1	600
2	400
3	350
4	230
5	500
6	300

Discount factor is 11% per annum.

Select one:

A. 3 years, 5.3 months

B. 1 years, 5 months

C. 2 years, 8.6 months

D. 4 years, 7.9 months

question 1

What is the expected return of a three (X, Y and Z) asset portfolio, whereby r_x = 15% per annum, r_y = -7% per annum, r_z = 17% per annum, w_x = 0.25, and w_z = 0.34?

Select one:

A. 5.66% per annum.

B. 6.66% per annum.

C. 8.33% per annum.

D. 9.53% per annum.

question 6

The price of a nil dividend paying share is Shs 170, and it could be, with equal probability, either Shs 130 or Shs 260 in two years time. What is the expected annual rate of return?

Select one:

A. 7.10%

B. 3.55%

C. 10.90%

D. 14.71%