NATIONAL OPEN UNIVERSITY OF NIGERIA

UNIVERSITY VILLAGE, JABI- ABUJA

FACULTY OF MANAGEMENT SCIENCES

JANUARY 2018 EXAMINATIONS

COURSE CODE:      MBF 839                                               CREDIT UNIT:   3
COURSE TITLE:     Quantitative Technique for Banking & Finance
TIME ALLOWED:   3 Hours
Instructions:
1.                  Attempt question number one (1) and any other three (3).
2.                  Question number 1 is compulsory and carries 25 marks while the other 3 questions carry 15 marks each. Present all your points in coherent and orderly manner.
1(a) Mention 9 (nine) reasons for holding stocks?                                           (9 marks)
1(b) A manufacturer produces three types of plastic fixtures. The time required for moulding, trimming and packaging is given in the table below. Time are given in hours per dozen fixtures
Process
Type A
Type B
Type C
Total time available
Moulding
1
2
3/2
12,000
Trimming
2/3
2/3
1
4,600
Packaging
½
1/3
1/2
2,400
Profit
₦11
₦16
₦15
–
Using simplex method, how many dozen of each type of fixture should be produced to obtain a maximum profit?                                                                                                     (16 marks)
 
2(i) Slot Nigeria Limited has an annual demand of 1,400 units for a brand of phone. The cost of a typical phone to Slot is ₦400. Carrying cost is estimated to be 20% of the unit cost, and the ordering cost is ₦25 per order. If Slot order in quantities of 300 units or more, it can get a 5% discount on the cost of the phones. Should Slot take the quantity discount? (7 marks)
 
2(ii) Define EOQ and state its basic assumptions?                                             (8 marks)
 
3(i) Define annuity with examples?                                                                 (5 marks)
(ii) A 10% irredeemable bond, denominated in naira, pays interest every six months. The interest yield required by investors in the bonds is 8% per annum. What is the market value of these bonds?                                                                                                    (5 marks)
 
(iii) Suppose that a 10 percent ₦I,000 bond will pay ₦100 annual interest into perpetuity? What will be the value of the bond if the market yield or interest rate were 15 percent?
(5 marks)
(4a) Mention six advantages of quantitative skills for managers?         (6 marks)
(4b) You have just graduated with a Master of Business Administration from a prestigious university in Nigeria. On the basis of your academic performance and years of work experience, XYZ Consulting Limited offered you an appointment as a Senior Consultant. After a year experience on the job, your Line Manager approached you to lead a meeting with a client, ABC Hotel. During the meeting, the MD of ABC Hotel informed you that room registration in the hotel have been recorded for the past nine years. Management would like to determine the trend of guest registration in order to project future occupancy. This estimate would help the hotel determine whether a future expansion will be needed.
Given the following time-series data, develop a regression equation relating registration to time. Then forecast year 11’s registrations.  Room registrations are in thousands.
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
17
16
16
21
20
20
23
25
24
(9 marks)
 
(5a) TD Nigeria Limited wants to invest in equipment and the company has two options. The first option is to invest in equipment A costing ₦3, 500 with an expected life of 5 years and cash flow of ₦550 a year. The second option is to invest in equipment B costing ₦4, 200 with an expected life of 5 years and cash flow of ₦750 a year. The rate of return expected from capital is 10% for both options. As the General Manager of this company, kindly advise if the investment is valuable and which option is best for TD Nigeria Limited?
(10 marks)
(5b) Assuming you placed ₦3, 500 in a savings account of a bank at 7% interest rate. What will be the value at the end of the eleventh year?                                                 (5 marks)
 
6(a) Given that (x – 4) (x + 5) = x(x – 1), solve for x?                                              (3 marks)
6(b) Find the sum of the 50th term of the sequence 1, 3, 5, 7, 9, ……                       (4 marks)
6(c) Find the sum of the geometric series 2 + 6 + 18 + 54 + ……                             (4 marks)
6(d) How many terms are there in the geometric progression 2, 4, 8, …, 128?         (4 marks)
You can get the exam summary answers for this course from 08039407882

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NATIONAL OPEN UNIVERSITY OF NIGERIA

91, CADASTRAL ZONE, NNAMDI AZIKWE EXPRESS WAY, JABI – ABUJA

FACULTY OF MANAGEMENT SCIENCES

JULY 2017 EXAMINATION QUESTIONS

 
Course Code: MBF 839                                                 Credit Unit: 3.
Course Title: Quantitative Techniques for Banking and Finance
Time Allowed: 2½ Hours.
Instructions:
1. Attempt Question 1 and any other three (3) Questions.
2. Question 1 is compulsory and carries 25 marks
while the other 3 Questions carry 15 marks each.
3. Show all your calculations for appropriate marks.
 
Question
1a. Simplify 15 + 3+2³ x 1- 4 x 2 (3 + I)    (10marks)
1b. 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                   #500           #200           #400           #250
Plan 2                   #700           #600           #400           #350
Required: Compute for the present value of the expected returns assuming a rate of return on capital of 20% and state your preferred project based on your computation.        (15marks)
Question
2a. Define Investment decisions and Annuity.     (8marks)
2b. Suppose that N1,000 are placed in the savings account of a bank at 5
percent interest rate. How much shall it grow at the end of three
years?         (7marks)
Question
3a. Define Capital budgeting   (5marks)
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?                 (10marks)
Question
4a. Explain the following;
i. Bond with maturity    (3marks)
ii. Pure Discount Bonds      (3marks)
iii. Perpetual Bonds        (3marks)
4b. Describe the objective functions and the constraints of L.P.       (6marks)
Question
5a. Differentiate the four costs associated with inventory.       (5marks)
5b. 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.      (10marks)
6a. Discuss five advantages of quantitative skills for managers. (7marks)
6b. What are the four (4) advantages and disadvantages of the periodic review system of inventory control. 1mark each @ each point = (8marks)
You can get the exam summary answers for this course from 08039407882

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NATIONAL OPEN UNIVERSITY OF NIGERIA

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

SCHOOL OF MANAGEMENT SCIENCES

MARCH 2014 EXAMINATION

Course Code: MBF 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.
You can get the exam summary answers for this course from 08039407882

Check anoda sample below