Section B (2 Mark)
The current market price of a share of XYZ stock is Rs50. If a call option on this stock has a strike price of Rs45, the call

Section A (1 Mark)
The length of the insurance industry's business cycle is shortened because of

Section B (2 Mark)
Consider the one-factor APT. The variance of returns on the factor portfolio is 6%. The beta of a well-diversified portfolio on the factor is 1.1. The variance of returns on the well-diversified portfolio is approximately __________.

Section B (2 Mark)
Withholding Tax Rates for payments made to Non-Residents are determined by the Finance Act passed by the Parliament for various years. The current rates for Dividends are:

Section C (4 Mark)
Management has recently announced that expected dividends for the next three years will be as follows:

For the subsequent years, management expects the dividend to grow at 5% annually. If the risk-free rate is
4.30%, the return on the market is 10.30% and the firm's beta is 1.40. What is the maximum price that you should pay for this stock?