Sample-exercises

Question 1: You bought a share for $10 and sold it for $12 after one year.
You received
share dividend $1 during the holding period. What was the rate of holding period
return?
Question 2: A bond has features:
- Face value: 1000 USD M
- Interest rate: 8%, interest is paid once a year at the end of the year. i
- Maturity: 5 years.
An investor bought this bond at the issued date with price of 1003 USD P0 and held
for 2 years then sold for 1002 USD P1. Determine the internal rate of return of this
investment?
Question 3: Assume that the last executed price (LEP) before the call auction session of
that day was 148 USD, the trading system randomly selected 16:38 hours as the closing
time, and at that time, there were orders as follows:
Bid (Buy) Offer (Sell)
Buy Volume Price Order Order Time Price Sell Volume
Time
G 500 ATC 16:35 16:30 149 800 D
A 300 150 16:37 14:25 150 700 E
B 200 149 15:30 9:35 152 500 F
C 300 148 10:50
Determine the closing price and the matched volumes.
Question 4: Assume that the last executed price (LEP) before the call auction session of
that day was 153 USD, the trading system randomly selected 16:38 hours as the closing
time, and at that time, there were orders as follows:
Bid (Buy) Offer (Sell)
Buy Volume Price Order Order Time Price Sell Volume
Time
G 500 ATO 16:35 16:30 149 800 D
A 300 150 16:37 14:25 150 700 E
B 200 149 15:30 9:35 152 500 F
C 300 148 10:50
Determine the opening price and the matched volumes.
Question 5: A bond has features:
- Face value: 1000 USD
- Interest rate: 10%, interest is paid once a year at the end of the year.
- Maturity: 8 years.
An investor bought this bond at the issued date with price of 1003 USD and held for 3
years then sold for 1002 USD. Determine the internal rate of return of this investment?
Question 6: Stock selling price is $65 P, expected dividend is $20 D1 and cost of
common stock is 42% i. Calculate the expected growth rate.
Question 7: A corporate bond has par value of 1000 USD M, a term of 5 years, an
interest rate of 10% i per annum, and interest payment is paid semi-annually at the end of
each payment period. This bond has paid interest twice (trả nửa năm 1 lần, trả 2 lần=1
năm) . At the beginning of the 2rd year, an investor intends to invest in bond, the current
market price of bond is 985 USD, the expected interest rate of investors is 12% r per
annum. Give advice to investors?
Question 8: A corporate bond has par value of 1000 USD, a term of 5 years, an interest
rate of 10% per annum, and interest payment is paid semi-annually at the end of each
payment period. This bond has paid interest 4 times. At the beginning of the 3rd year, an
investor intends to invest in bond, the current market price of bond is 975 USD, the
expected interest rate of investors is 12% per annum. Give advice to investors?
Question 9: An investor is considering investing in a discount bond A with the following
details:
- Face value: 100USD
- Maturity: 4 years
- Expected rate of return required by the investor is 9%.
Determine the price at which the investor should buy this bond.
Question 10: Your bank possesses an amount of government bonds C issued on
18/01/2002. Coupon is paid out on 18/01 each year C=Mxi. Your bank is considering
selling these bonds today (18/01/2007) after getting the latest coupon. Knowing that M =
100USD, coupon rate (i) = 7.4% and maturity = 10 years. Discount rate required is 8.4%
r. As a bank staff, please help your boss determine the price of these bonds.
Question 11: Government bonds C were issued on 15/07/2002. The face value is
100.000VND M with 5 years maturity. The coupon rate is 9% i. Coupon is paid out every
half year C=Mxi/2. The discount rate applied for long-term investment period is 8% r.
Determine the price of this bond on 15/07/2004.
Question 12: Company A plans to pay 3000VND/share D for the coming year. This
company’ share is trading in the stock market at 55.000VND/share P0. Expected rate of
return required by investors when investing in this share is 16% r. Company A has paid
out dividend consistently and regularly and has stable dividend growth rate over years.
a. Determine dividend growth rate.
b. An investor X intends to hold this stock within 5 years and then sell it. His expected
selling price is 60.000VND/share. Determine the price at which the investor X is willing
to pay to get this stock at present.

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Question 1: You bought a share for $10 and sold it for $12 after one year.

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