Mid Term Assessment Assignment

Finance and Economics for Engineers (MME 308): ODD SEMESTER

(2021-2022)
Department of Humanistic Studies, IIT (BHU) Varanasi-221005

Date: 24.09.2021
Total Marks: 50
Instructions: Read instructions first and
attempt all. (i) use appropriate diagram (ii) handwritten to be
submitted as a scanned copy or paste the google drive link as scanned copy
(iii) mark figures correctly (iv) use colors and scale while drawing
(v), use flow chart if necessary. All these instructions will be considered
while awarding marks.

1. Calculate the amount required per month @8% per annum to accumulate Rs. 1 Crore in 5
years. [4]

2. What is the estimated value of a stock paying a dividend of Rs. 10 (this year) if the discount
rate is 10% and the expected growth in the dividend is 5%. [4]

3. An investor has purchased shares of companies 'A' & 'B'. He has

invested Rs 1000 in each company. Company A has given dividends of Rs 200 and company
B has given no dividend. After one year value of the investments in companies A and B are
Rs 1500 & Rs 2000 respectively. What is the return on Company A and B? [4]

4. If we invest ₹ 1000 for a period of 5 years @7% p.a, what would be the maturity amount?
[4]

5. What is the expected return from a stock with a beta of 1.2 and where the Risk-free rate is
10%, and the market risk premium is 5%. [4]

6. Give 2 examples of Monetary and Fiscal stimulation that a Government can resort to during
a recession. [4]

7. Give 3 participants of the Capital Markets. [4]

8. If I buy a stock on Monday through an exchange, when can I expect my Demat account to be
credited with the stock. (assume no holidays in the week) [4]

9. Explain 3 key characteristics of a robust capital market. [4]

10. Explain the impact of the increase in …sovereign risk, inflation, the demand of money and
economic activity on the interest rates prevailing in a country. [7]

11. Take the Cobb Douglas equation and explain 5 initiatives that India should focus on to
increase its GDP. [7]