The MSM index closed at 3,622.40 points, down 0.04 per cent from the previous close.

The Sharia Index ended up 0.09 per cent at 517.30 points. Al Madina Investment, up 4.55 per cent was the top gainer today while Arabia Falcon Insurance, down 7.41 per cent, was the top loser. Shares of Bank Muscat were the most active in terms of the number of shares traded and also were the most active in terms of turnover.

Financial Index closed at 5,709.49 points, up by 0.10 per cent. Al Madina Investment, Oman United Insurance, Bank Muscat, Sohar International and National Bank of Oman were up by 4.55 per cent, 2.63 per cent, 2.11 per cent, 1.03 per cent and 0.64 per cent respectively. Arabia Falcon Insurance, Oman Arab Bank, Ominvest, Al Anwar Holding and Gulf Investment were down by 7.41 per cent, 4.76 per cent, 1.76 per cent, 1.61 per cent and 1.49 per cent respectively.

From the above report, you are required to attempt the following tasks:

1. Briefly discuss major issue in financial investment in the Muscat Securities Market from the above report. (10 marks)
2. From the above report, you are required to discuss financial assets of the report and give a critical advice to investors which shares are worthwhile for investment. (10 marks)
3. Bank Muscat shares were up by 2.11 per cent, and the share price is 90 OMR. After one year, expected share prices will be 110 OMR with 12% of risk-adjusted rate from the financial market. Dividend after one year is 5 OMR. You are required to:

i) Discuss fundamental analysis of financial investment (5 marks). ii) Calculate holding period of return of Bank Muscat (3 marks). iii) Calculate Value of stock of Bank Muscat. (2 marks).

iv) Critically advise investor whether it is worthwhile to invest in the Bank Muscat shares or not, why? (10 marks).

(20 marks)

(D) Al Anwar Holding share price is 65 OMR per share. The price of the share is now trading at 75 OMR per share. The interest rate is 11% interest and initial margin is 60%. An investor now considers investing 200 shares. You are required to:

1. Briefly discuss marginal account and actual margin of the financial investment (5 marks).
2. Calculate margin return of the 200 shares (2 marks)
3. Calculate new margin return of the share when the price is increased to 70 OMR per share (3 marks).
4. Critically advise investor whether it is worthwhile to invest in the Al Anwar Holding share (10 marks).

(20 marks) (E) An investor is now holding shares from Sohar International and NBO. Both shares have the same standard deviation of market index, 10%. The shares from Sohar International have 20% of risk in term of deviation and the shares from NBO have 24%. An expected return of the shares from Sohar International is 25% and An expected return of the shares from NBO is 22%. You are required to:

i) Briefly discuss capital asset pricing model for effective investment decision (10 marks). ii) Calculate expected return of the shares from Sohar International and NBO (5 marks). iii) Draw the market line of the shares from Sohar International and NBO (5 marks).

iv) Critically advise an investor whether to hold or sell the shares (10 marks).

(30 marks)

(F) Provide a conclusion with the logical flow of the information given in the report (10 marks).