BUS839 : Quantitative Techniques for Banking and Finance (2014)

NATIONAL OPEN UNIVERSITY OF NIGERIA

14/16, AHMADU BELLO WAY, VICTORIA ISLAND, LAGOS

SCHOOL OF MANAGEMENT SCIENCES

MARCH 2014 EXAMINATION

Course Code: BUS 839 Credit Unit: 2.

Course Title: Quantitative Techniques for Banking and Finance

Time Allowed: 2 Hours.

Instructions:

1. Attempt Question 1 and any other two (2) Questions.

2. Question 1 is compulsory and carries 30 marks

while the other 2 Questions carry 20 marks each.

3. Show all your calculations for appropriate marks.

1a. Define variation and discuss two kinds of variation that are most common.

1b. Discuss five advantages of quantitative skills for managers.

1c. A firm is faced with two alternative investment plans; Plan 1 will cost #750 and plan 2

#950. Both plans involve the purchase of equipment the life of which is four years, and

the current rate of return on capital is expected on capital is expected to be 20%. The

estimated cash flows resulting from the projects are:

Years 1 2 3 4

Plan 1 #300 #400 #300 #200

Plan 2 #500 #400 #300 #300

The present value of these expected returns assuming a rate of return on capital of 20%.

2a. Define Arithmetic and Geometric progression.

2b. Suppose #1,000 is invested at 7% per annum compound interest. Find value of the

investment at the end of the tenth year.

3a. Define Capital budgeting

3b. An equipment costing #1,000 has an expected life of 5years. It is estimated that the cash

flow resulting from the use of the machine will be #400 a year. The rate of return

expected from capital of the type is 15%. Is the investment worthwhile?

4a. Explain the following;

i. Bond with maturity

ii. Pure Discount Bonds

iii. Perpetual Bonds

4b. Describe the objective functions and the constraints of L.P

5a. Differentiate the four costs associated with inventory.

5b. What are the advantages and disadvantages of the periodic review system of inventory

control.

5c. The following data relate to a particular stock item

Normal Usage 110 per day

Minimum Usage 50 per day

Maximum Usage 140 per day

Lead time 25-20 days

EOQ 5000

Using this data, calculate the various control levels.

For the 2015 – till date past questions for this course CLICK HERE

Contact me for your TMA, GST302 Business plan writeup, Project Writeup and also get your Exam Summary for this course.

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