CA FINAL AFM

COMPILER 5.0
VOLUME 3
THEORY QUESTIONS - CHAPTER 1 TO 15

BY CA MAYANK KOTHARI
 Preface
Dear Students,
As you embark on your journey through the 15 chapters of Advanced
Financial Management, remember that this is more than just a subject—it's
a gateway to understanding the financial world and building a solid
foundation for your future.

This subject holds significant weight, with up to 20 marks dedicated to direct

theory questions and the remaining focused on practical questions & MCQs.
However, I encourage you to approach your study with a mindset different
from exam preparation. Read the book like a captivating novel, letting
yourself become immersed in the intricacies of finance.

Finance is not just a part of your exams; it's an essential tool for life. As you
delve into these chapters, take an interest in how finance operates, how
decisions are made, and how wealth is built. Your understanding today
will empower you tomorrow, enabling you to navigate the financial landscape
confidently and make informed decisions.

So, let's dive in with curiosity and enthusiasm, exploring the theories and
concepts that will not only help you succeed in exams but also pave the way
for a prosperous future. Happy reading!

Best regards,
CA Mayank Kothari
Conferenza.in
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 SFM COMPILER 5.0
VOLUME 3
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photocopying, recording, scanning, digitizing, taping, web distribution, informationnetworks or information
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Disclaimer: While every effort is taken to avoid errors or omissions in this publication, any mistake or
omission that may have crept in, is not intentional. It may be taken note of that neither the publisher, nor
the author, will be responsible for any damage or loss of any kind arising to any one in any manner on
account of such errors or omissions.
The discussion in the present text is academic and does not tantamount to expertise/professional service
to the readers on the related subject matter. Further comments and suggestions for improving quality of
the book are welcome and will be gratefully acknowledged.
 INDEX
Page No. No. of 1st 2nd 3rd 4th 5th
No. Chapter Name
Questions Reading Reading Reading Reading Reading
1 Financial Policy & Corporate Strategy 1 16
2 Risk Management 15 9
3 Advanced Capital Budgeting Decisions 27 23
4 Security Analysis 42 44
5 Security Valuation 78 37
6 Portfolio Management 107 33
7 Securitization 133 16
8 Mutual Funds 149 27
9 Derivative Analysis & Valuation 171 49
10 Interest Rate Risk Management 220 24
Foreign Exchange Exposure and Risk
11 243 24
Management
12 International Financial Management 261 29
13 Business Valuation 284 28
Mergers, Acquisitions & Corporate
14 309 36
Restructuring
15 Startup Finance 341 26
Total 362 421

❖ Set clear goals and stay focused on them

 TIME TABLE
Here is my suggested time table that you can follow

No. of Questions Days Required to Complete

Reading Phase
Per Day (Approx) 421 Questions

First Reading 7 59

Second Reading 10 43

Third Reading 15 31

Fourth Reading 20 28

Fifth Reading 25 19

Total - 180

Important Notes:
1. Do not try to exceed the daily limits, at least in the first three readings. Completing
the course is not as important as understanding the concepts.

2. Visualizing while reading is the most effective technique for remembering the
concepts for years.

3. Read it like a novel or a newspaper. This means you don’t have to memorize the
points or cram anything. Just understand and move on.

4. You might feel, after a few days of reading, that you have forgotten what you
studied, and that’s absolutely fine. You will be able to write in the exam
automatically if you finish reading the entire book five times as outlined above.

5. Stay consistent. Make it a rule to read this many questions anytime, anywhere
during the day
 1. Financial Policy & Corporate Strategy
CHAPTER 1
FINANCIAL POLICY & CORPORATE
STRATEGY
Question 1

Answer:

1
 1. Financial Policy & Corporate Strategy

Question 2

Answer:
✓
✓

•
•
•

Question 3

Answer:

•
o

2
 1. Financial Policy & Corporate Strategy

•
o
o

•
o
o

Question 4

Answer:

Question 5

Answer:

3
 1. Financial Policy & Corporate Strategy

Question 6

Answer:

(i)

(ii)

(iii)

4
 1. Financial Policy & Corporate Strategy

Question 7

Answer:

Question 8

Answer:

5
 1. Financial Policy & Corporate Strategy

▪
▪

▪
▪

•
o
o
•
o
o
•
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o

6
 1. Financial Policy & Corporate Strategy

Question 9

Answer:

•
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7
 1. Financial Policy & Corporate Strategy

•
o

Question 10

Answer:

8
 1. Financial Policy & Corporate Strategy

o
o
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Question 11

Answer:

9
 1. Financial Policy & Corporate Strategy

Question 12

Answer:

Question 13

Answer:
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10
 1. Financial Policy & Corporate Strategy

Question 14

Answer:

•
o

11
 1. Financial Policy & Corporate Strategy

Question 15

Answer:

Question 16

Answer:

12
 1. Financial Policy & Corporate Strategy

13
 2. Risk Management
CHAPTER 2
RISK MANAGEMENT
Question 1

Answer:

•
−
−
−
−

14
 2. Risk Management

15
 2. Risk Management

Question 2

Answer:

❖
❖
❖
❖
❖

16
 2. Risk Management

17
 2. Risk Management

18
 2. Risk Management

19
 2. Risk Management

Yes Bank Crisis (2020): Yes Bank faced severe liquidity issues due to mounting bad loans and
governance failures, leading to a temporary moratorium by the RBI.
Impact: The crisis affected depositors and investors, resulting in a loss of confidence in the banking
sector and necessitating a government-led restructuring.

Question 3

Answer:

20
 2. Risk Management

Question 4

Answer:

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•
•
•
•
•

Question 5

Answer:

21
 2. Risk Management

Question 6

Answer:

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 2. Risk Management

Question 7

Answer:

Question 8

Answer:

23
 2. Risk Management

24
 2. Risk Management

Question 9

Answer:

25
 3. Advanced Capital Budgeting Decisions
CHAPTER 3
ADVANCED CAPITAL BUDGETING
DECISIONS
Question 1

Answer:

Question 2

Answer:

Question 3

Answer:

26
 3. Advanced Capital Budgeting Decisions

Question 4

Answer:

1.

2.

3.

4.

Question 5

Answer:

•
o

•
o

•
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27
 3. Advanced Capital Budgeting Decisions

Question 6

Answer:

Question 7

Answer:

Question 8

28
 3. Advanced Capital Budgeting Decisions

▪
▪

▪
▪

▪
▪

29
 3. Advanced Capital Budgeting Decisions

▪
▪

Question 9

Answer:
✓

30
 3. Advanced Capital Budgeting Decisions

Question 10

Answer:

Stanadrd Deviation
Coefficient of variation =
Expected Return or Expected Cash Flow

Question 11

Answer:

31
 3. Advanced Capital Budgeting Decisions

Certain Cash Flows

α=
Risk or Expected Cash Flows

× ×

32
 3. Advanced Capital Budgeting Decisions

Question 12

Answer:

Question 13

Answer:

Question 14

Answer:
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33
 3. Advanced Capital Budgeting Decisions

Question 15

Question 16

Answer:
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34
 3. Advanced Capital Budgeting Decisions

Question 17

Answer:

Question 18

Answer:
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35
 3. Advanced Capital Budgeting Decisions

Question 19

Answer:

36
 3. Advanced Capital Budgeting Decisions

Question 20

Answer:
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37
 3. Advanced Capital Budgeting Decisions

Question 21

Answer:
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Question 22

Answer:

38
 3. Advanced Capital Budgeting Decisions

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o
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Question 23

Answer:

39
 3. Advanced Capital Budgeting Decisions

40
 4. Security Analysis
CHAPTER 4
SECURITY ANALYSIS
Question 1

Answer:

Question 2

Answer:

41
 4. Security Analysis

Question 3

Answer:

Question 4

Answer:

42
 4. Security Analysis

Question 5

Answer:

Question 6

Answer:
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43
 4. Security Analysis

Question 7

Answer:

Question 8

Answer:

44
 4. Security Analysis

Question 9

Answer:

45
 4. Security Analysis

Question 10

Answer:

Question 11

Answer:

46
 4. Security Analysis

Question 12

Answer:

47
 4. Security Analysis

Question 13

Answer:

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48
 4. Security Analysis

Question 14

Answer:

Question 15

Answer:

49
 4. Security Analysis

Question 16

Answer:
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50
 4. Security Analysis

Question 17

Answer:
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•

51
 4. Security Analysis

Question 18

Answer:

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 4. Security Analysis

Question 19

Answer:

Question 20

Answer:

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 4. Security Analysis

Question 21

Answer:

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 4. Security Analysis

Question 22

Answer:

55
 4. Security Analysis

Question 23

Answer:

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 4. Security Analysis

Question 24

Answer:

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 4. Security Analysis

Question 25

Answer:

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•
•
•

Question 26

Answer:

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 4. Security Analysis

Question 27

Answer:

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 4. Security Analysis

60
 4. Security Analysis

Question 28

Answer:

61
 4. Security Analysis

Question 29

Answer:
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Question 30

Answer:

Question 31

Answer:

62
 4. Security Analysis

Question 32

Answer:

Question 33

Answer:
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63
 4. Security Analysis

Question 34

Answer:
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64
 4. Security Analysis

Question 35

Answer:
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65
 4. Security Analysis

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Question 36

Answer:

66
 4. Security Analysis

Question 37

Answer:

67
 4. Security Analysis

Question 38

Answer:

Question 39

Answer:

68
 4. Security Analysis

Question 40

Answer:

69
 4. Security Analysis

Question 41

Answer:

70
 4. Security Analysis

71
 4. Security Analysis

Question 42

Answer:
✓

72
 4. Security Analysis

Question 43

Answer:

73
 4. Security Analysis

Question 44

Answer:

74
 4. Security Analysis

EMAt = aPt + (1 − a)(EMAt − 1)

75
 5. Security Valuation

CHAPTER 5
SECURITY VALUATION
Question 1

Answer:
✓

Question 2

Answer:

76
 5. Security Valuation

Question 3

Answer:
✓

77
 5. Security Valuation

Question 4

Answer:

Question 5

Answer:

D1 P1 D1 + P1
P0 = 1
+ 1
=
(1 + Ke) (1 + Ke) (1 + Ke)1

78
 5. Security Valuation

D1
P0 =
Ke

D1 D0 (1 + g)
P0 = or
Ke − g Ke − g

D0 (1 + g1 ) D0 (1 + g 2 ) D0 (1 + g n ) Pn
P0 = [ + + ⋯ + ] +
(1 + Ke)1 (1 + Ke)2 (1 + Ke)n (1 + Ke)n

79
 5. Security Valuation

D0 (1 + g 𝑛 ) D0 H1 (g 𝑐 − g 𝑛 )
P0 = +
r − g𝑛 r − g𝑛

Question 6

Answer:

80
 5. Security Valuation

EPS1 (1 − b)
P0 =
Ke − br

r
D + (E − D) Ke
P0 =
Ke

Profit After Tax − Preference Dividend

EPS =
Number of Equity Shares

Question 7

Answer:

81
 5. Security Valuation

Question 8

Answer:

82
 5. Security Valuation

Question 9

Answer:

−
−

Question 10

Answer:
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83
 5. Security Valuation

Question 11

Answer:
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84
 5. Security Valuation

Question 12

Answer:
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 5. Security Valuation

Question 13

Answer:
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Question 14

Answer:

86
 5. Security Valuation

Question 15

Answer:

Question 16

Answer:

Question 17

Answer:

87
 5. Security Valuation

Question 18

Answer:

88
 5. Security Valuation

( ) [ ( ) ]

Question 19

Answer:

89
 5. Security Valuation

Question 20

Answer:

90
 5. Security Valuation

Question 21

Answer:

Question 22

Answer:
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91
 5. Security Valuation

Question 23

Answer:

92
 5. Security Valuation

•
•
•

Question 24

Answer:

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 5. Security Valuation

Question 25

Answer:

Question 26

Answer:

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 5. Security Valuation

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Question 27

Answer:

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•

95
 5. Security Valuation

Question 28

Answer:

96
 5. Security Valuation

Question 29

Answer:
✓

Question 30

Answer:

97
 5. Security Valuation

[F − P] 365
Y= x x 100
P M

Question 31

Answer:
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98
 5. Security Valuation

Question 32

Answer:

Question 33

Answer:

•
o

99
 5. Security Valuation

•
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Question 34

Answer:

Question 35
100
 5. Security Valuation

Answer:

Question 36

Answer:

101
 5. Security Valuation

•
•

•
•

Question 37

Answer:

102
 5. Security Valuation

103
 6. Portfolio Management

CHAPTER 6
PORTFOLIO MANAGEMENT
Question 1

Answer:

104
 6. Portfolio Management

Question 2

Answer:

Question 3

Answer:

105
 6. Portfolio Management

Question 4

Answer:

-
-
-
-

-
-

-
-
-
-

106
 6. Portfolio Management

-
-

Question 5

Answer:

Question 6

Answer:

107
 6. Portfolio Management

•
•

•
•

108
 6. Portfolio Management

Question 7

Answer:

Question 8

Answer:
➢

109
 6. Portfolio Management

Question 9

Answer:

✓
✓

Question 10

Answer:

110
 6. Portfolio Management

Question 11

Answer:

111
 6. Portfolio Management

Question 12

Answer:

112
 6. Portfolio Management

(i)
(ii)
(iii)
(iv)
(v)
(vi)

(vii)

(viii)

Question 13

Answer:

113
 6. Portfolio Management

Question 14

Answer:

Question 15

Answer:

114
 6. Portfolio Management

Question 16

115
 6. Portfolio Management

Answer:

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✓
✓

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 6. Portfolio Management

Question 17

Answer:

Question 18

Answer:

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 6. Portfolio Management

Question 19

Answer:

118
 6. Portfolio Management

•
•
•
119
 6. Portfolio Management

•
•

Question 20

Answer:

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 6. Portfolio Management

Question 21

Answer:

Question 22

Answer:

Question 23
121
 6. Portfolio Management

Answer:

122
 6. Portfolio Management

123
 6. Portfolio Management

Question 24

Answer:

Question 25

Answer:
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 6. Portfolio Management

Question 26

Answer:

Question 27

Answer:

Question 28

125
 6. Portfolio Management

Answer:

Question 29

Answer:

Question 30

Answer:

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 6. Portfolio Management

Question 31

Answer:

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•

•
•

•
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 6. Portfolio Management

•
•

Question 32

Answer:
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Question 33

Answer:

128
 6. Portfolio Management

Question 34
Write short notes on Capital Market Theory
Answer:
Capital Market Theory helps investors understand how to create a balanced investment portfolio by
mixing different assets to achieve the desired level of risk and return. Key concepts in this theory
include the market portfolio, risk-free rate of interest, and the Capital Market Line (CML). Let’s
explore the different types of portfolios on the Capital Market Line: lending portfolio, borrowing
portfolio, diversified portfolio, and risk-free portfolio.
1. Risk and Return: In investing, "risk" is the chance that the value of an investment might
go down, while "return" is the potential profit from an investment. Generally, the higher the
potential return, the higher the risk.
2. Market Portfolio (Point B): This is a theoretical portfolio that includes every asset in the
market, weighted by its market value. It represents a diversified portfolio with an average
risk and return that reflects the overall market. Point B on the graph shows the market
portfolio.
3. Risk-Free Rate of Interest (Rf): This is the return on an investment that is considered
completely risk-free, such as a government bond. The risk-free rate is shown at the point
where the CML intersects the y-axis.
4. Capital Market Line (CML): The CML is a line on a graph that shows all the possible
combinations of risk and return that an investor can achieve by combining the market
portfolio with a risk-free asset. It starts at the risk-free rate (Rf) and extends through the
market portfolio (B) to higher levels of risk and return.
 6. Portfolio Management

Types of Portfolios on the Capital Market Line:

1. Risk-Free Portfolio:
o Definition: A risk-free portfolio consists entirely of risk-free assets, such as
government bonds.
o Characteristics: It has no risk (zero standard deviation) and offers a return
equal to the risk-free rate (Rf).
o Example: If an investor decides to put all their money into government bonds,
they are choosing a risk-free portfolio. This means there is no risk of losing the
invested capital, but the return will be relatively low.
2. Diversified Portfolio:
o Definition: A diversified portfolio is a mix of various assets to reduce risk
through diversification, ensuring not all investments are subject to the same
risks.
o Position on CML: The market portfolio (Point B) represents the most
diversified portfolio because it includes every possible asset. Moving towards
B along the CML represents investing in increasingly diversified portfolios as
more risk-free assets are replaced by market assets.
o Characteristics: Diversified portfolios reduce unsystematic risk (the risk
specific to individual investments) by holding a wide variety of assets.
o Example: If an investor holds stocks from multiple sectors, bonds, real estate,
and other assets, they have a diversified portfolio. This type of portfolio helps
to minimize the impact of any single asset's poor performance.
3. Lending Portfolio (Rf to B):
o Definition: A lending portfolio involves investing some money in risk-free
assets (like government bonds) and some in the market portfolio.
o Position on CML: This portfolio lies between the risk-free rate (Rf) and the
market portfolio (B) on the CML.
o Characteristics: It represents a conservative investment approach, combining
low-risk, low-return assets with higher-risk, higher-return assets. The more you
invest in risk-free assets, the lower your risk and return.
o Example: An investor who puts 70% of their money in government bonds (risk-
free) and 30% in a diversified stock index (market portfolio) has a lending
portfolio. This strategy balances safety with some exposure to market returns.
 6. Portfolio Management

4. Borrowing Portfolio (B to Z):

o Definition: A borrowing portfolio is created when an investor borrows money
at the risk-free rate to invest more in the market portfolio, aiming for higher
returns.
o Position on CML: This portfolio lies beyond the market portfolio (B) on the
CML, extending towards Z.
o Characteristics: This is an aggressive investment strategy with higher risk and
potential for higher returns. Borrowing to invest amplifies both gains and losses.
o Example: If an investor has ₹10,000 but borrows another ₹10,000 to invest a
total of ₹20,000 in a stock market index (market portfolio), they have a
borrowing portfolio. While this approach can lead to substantial gains if the
market performs well, it also increases the risk of significant losses.
 7. Securitization
CHAPTER 7
SECURITIZATION
Question 1

Answer:
✓

✓
✓

Question 2

Answer:

1.

2.

129
 7. Securitization

3.

4.

5.

6.

Question 3

Answer:

a.

b.

c.

d.

130
 7. Securitization

Question 4

Answer:

131
 7. Securitization

132
 7. Securitization

Question 5

Answer:

1.

2.

3.

4.

5.

6.

133
 7. Securitization

7.

Question 6

Answer:

Question 7

Answer:

1.

134
 7. Securitization

2.

135
 7. Securitization

3.

a.
b.

136
 7. Securitization

Question 8

Answer:

•
•

•
•

•
•

Question 9

137
 7. Securitization

Answer:

138
 7. Securitization

Question 10

Answer:

•
o

•
o

139
 7. Securitization

Question 11

Answer:

Question 12

Answer:

140
 7. Securitization

Question 13

Answer:

141
 7. Securitization

Question 14

Answer:

Question 15

Answer:

142
 7. Securitization

Question 16

Answer:
✓

143
 7. Securitization

144
 8. Mutual Funds

CHAPTER 8
MUTUAL FUNDS
Question 1

Answer:

145
 8. Mutual Funds

Question 2

Answer:

146
 8. Mutual Funds

Question 3

Answer:

147
 8. Mutual Funds

Question 4

Answer:

Question 5

Answer:

148
 8. Mutual Funds

Question 6

Answer:

-
-
-

149
 8. Mutual Funds

Question 7

150
 8. Mutual Funds

Answer:

Question 8

Answer:

151
 8. Mutual Funds

Question 9

Answer:

152
 8. Mutual Funds

Question 10

Answer:

Question 11

Answer:

153
 8. Mutual Funds

Question 12

Answer:
✓

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✓
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Question 13

Answer:
✓
✓

154
 8. Mutual Funds

Question 14

Answer:
✓
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✓

Question 15

Answer:

Question 16

Answer:

155
 8. Mutual Funds

✓
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√

Question 17

Answer:

156
 8. Mutual Funds

•
•
•
•
•

Question 18

Answer:

157
 8. Mutual Funds

Question 19

Answer:
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158
 8. Mutual Funds

Question 20

Answer:

Question 21

Answer:
159
 8. Mutual Funds

o
o

o
o

Question 22

Answer:

160
 8. Mutual Funds

Question 23

Answer:
✓

Question 24

161
 8. Mutual Funds

Answer:

162
 8. Mutual Funds

Question 25

Answer:

o
o
o
o

163
 8. Mutual Funds

Question 26

Answer:

•
•
•
•

164
 8. Mutual Funds

Question 27

Answer:

165
 9. Derivatives Analysis and Valuation

CHAPTER 9
DERIVATIVES ANALYSIS AND
VALAUTION
Question 1
•
•
Answer:

Question 2

Answer:

166
 9. Derivatives Analysis and Valuation

Question 3

Answer:

Question 4

Answer:

167
 9. Derivatives Analysis and Valuation

•
o

•
o

•
o

Question 5

Answer:

(i)

168
 9. Derivatives Analysis and Valuation

Question 6

Answer:

•
•

169
 9. Derivatives Analysis and Valuation

•
•
•
•

Question 7

Answer:
✓

Initial Margin Imagine a water tank. We start

motor pump and fill the tank daily
[this is initial margin].
Once the water level goes on
decreasing [due to loss on futures
position exchange will deduct the
Maintenance
loss you suffered from your
Margin
margin account and your margin
account will go down] we start the
motor pump again to refuel the
tank to its initial level [margin call
from broker to deposit the money
again up to the initial level]

170
 9. Derivatives Analysis and Valuation

Question 8

Answer:
✓

•
•

171
 9. Derivatives Analysis and Valuation

•
•
•

Question 9

Answer:

•
o

•
o

o
o

•
o

•
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172
 9. Derivatives Analysis and Valuation

•
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▪
▪

Question 10

Answer:

173
 9. Derivatives Analysis and Valuation

✓
× ×

× ×

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174
 9. Derivatives Analysis and Valuation

Question 11

Answer:

175
 9. Derivatives Analysis and Valuation

Question 12

Answer:

176
 9. Derivatives Analysis and Valuation

✓
✓

× × × ×

Question 13

Answer:

177
 9. Derivatives Analysis and Valuation

✓
✓

✓
×

178
 9. Derivatives Analysis and Valuation

✓
✓

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✓

✓
✓

Question 14

Answer:
✓

✓
179
 9. Derivatives Analysis and Valuation

Question 15

Answer:

•
•
•

180
 9. Derivatives Analysis and Valuation

•
•

•
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181
 9. Derivatives Analysis and Valuation

•
•
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182
 9. Derivatives Analysis and Valuation

•
•

•
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183
 9. Derivatives Analysis and Valuation

Question 16

Answer:

184
 9. Derivatives Analysis and Valuation

Question 17

Answer:

185
 9. Derivatives Analysis and Valuation

•
•
•
•
•

•
•
•
•
•

Question 18

Answer:

186
 9. Derivatives Analysis and Valuation

Question 19

Answer:

Question 20

Answer:

187
 9. Derivatives Analysis and Valuation

✓
✓

188
 9. Derivatives Analysis and Valuation

Question 21

Answer:

189
 9. Derivatives Analysis and Valuation

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•

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190
 9. Derivatives Analysis and Valuation

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Question 22

Answer:

Question 23

Answer:

191
 9. Derivatives Analysis and Valuation

Question 24

Answer:

•
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•
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•
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192
 9. Derivatives Analysis and Valuation

•
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193
 9. Derivatives Analysis and Valuation

Question 25

Answer:
✓

Question 26

Answer:

194
 9. Derivatives Analysis and Valuation

Question 27

Answer:

•
•

195
 9. Derivatives Analysis and Valuation

•
•

•
•

Question 28

Answer:

196
 9. Derivatives Analysis and Valuation

Question 29

Answer:

•
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197
 9. Derivatives Analysis and Valuation

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198
 9. Derivatives Analysis and Valuation

Question 30

Answer:

Question 31

Answer:

199
 9. Derivatives Analysis and Valuation

Question 32

Answer:

Question 33

Answer:

200
 9. Derivatives Analysis and Valuation

Question 34

Answer:

Question 35

Answer:

Question 36

Answer:

201
 9. Derivatives Analysis and Valuation

Question 37

202
 9. Derivatives Analysis and Valuation

•
•
•

203
 9. Derivatives Analysis and Valuation

Question 38

Answer:

Question 39

Answer:

204
 9. Derivatives Analysis and Valuation

Question 40

Answer:

Question 41

Answer:

205
 9. Derivatives Analysis and Valuation

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Question 42

Answer:
✓

206
 9. Derivatives Analysis and Valuation

Question 43

Answer:

Question 44

Answer:

•
•
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•
•
•
•

207
 9. Derivatives Analysis and Valuation

Question 45

Answer:

Question 46

Answer:

208
 9. Derivatives Analysis and Valuation

Question 47

Answer:

209
 9. Derivatives Analysis and Valuation

Question 48

Answer:

210
 9. Derivatives Analysis and Valuation

Question 49

Answer:

•
•

•
•

•
•

211
 9. Derivatives Analysis and Valuation

•
•
•

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•
•

212
 10. Interest Rate Risk Management
CHAPTER 10
INTEREST RATE RISK
MANAGEMENT
Question 1

Answer:

Question 2

Answer:
✓

213
 10. Interest Rate Risk Management

Question 3

Answer:

214
 10. Interest Rate Risk Management

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Question 4

Answer:

Question 5

Answer:

215
 10. Interest Rate Risk Management

Question 6

Answer:

•
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•

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216
 10. Interest Rate Risk Management

Question 7

Answer:

𝜟𝑹𝜶 𝜟𝑹𝒍

• 𝛥𝑅𝛼
• 𝛥𝑅𝑙

217
 10. Interest Rate Risk Management

Question 8

Answer:
✓

218
 10. Interest Rate Risk Management

Question 9

Answer:
✓

219
 10. Interest Rate Risk Management

Question 10

Answer:

✓
✓
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220
 10. Interest Rate Risk Management

Question 11

Answer:
✓

Question 12

Answer:
✓
✓

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221
 10. Interest Rate Risk Management

Question 13

Answer:

222
 10. Interest Rate Risk Management

Question 14

Answer:
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223
 10. Interest Rate Risk Management

Question 15

Answer:

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( )

224
 10. Interest Rate Risk Management

Question 16

Answer:

Answer:

Answer:

225
 10. Interest Rate Risk Management

226
 10. Interest Rate Risk Management

Question 17

Answer:

Question 18

Answer:

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227
 10. Interest Rate Risk Management

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 10. Interest Rate Risk Management

( )

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( )

229
 10. Interest Rate Risk Management

Question 19

Answer:

Question 20

Answer:

230
 10. Interest Rate Risk Management

231
 10. Interest Rate Risk Management

Question 21

(i)
(ii)
(iii)
(iv)

Answer:

232
 10. Interest Rate Risk Management

Question 22

Answer:

•
•

233
 10. Interest Rate Risk Management

Question 23

Answer:

Question 24

Answer:

234
 11. Forex

CHAPTER 11
FOREIGN EXCHANGE EXPOSURE &
RISK MANAGEMENT
Question 1

Answer:

Question 2

Answer:

235
 11. Forex

Question 3

Answer:

•
•
•
•

Question 4

Answer:
✓

236
 11. Forex

✓
✓

Question 5

Answer:
✓

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✓

Question 6

Answer:

237
 11. Forex

238
 11. Forex

Question 7

Answer:

Question 8

Answer:

× ×

239
 11. Forex

Question 9

Answer:

Question 10

Answer:

240
 11. Forex

Question 11

Answer:

( )

Question 12

Answer:

241
 11. Forex

Question 13

Answer:

•
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•
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242
 11. Forex

Question 14

Answer:

243
 11. Forex

Question 15

Answer:

Question 16

Answer:

244
 11. Forex

Question 17

Answer:

245
 11. Forex

Question 18

Answer:

246
 11. Forex

Question 19

Answer:

(1)

(2)

(3)
(4)

•
•
•

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▪
▪

247
 11. Forex

Question 20

Answer:

248
 11. Forex

Question 21

Answer:

Question 22

Answer:

249
 11. Forex

250
 11. Forex

Question 23

Answer:
✓

✓
✓

251
 11. Forex

Question 24

Answer:

252
 12. International Financial Management

CHAPTER 12
INTERNATIONAL FINANCIAL
MANAGEMENT
Question 1

Answer:

253
 12. International Financial Management

Question 2

Answer:

Question 3

Answer:

254
 12. International Financial Management

•
•

•
•

255
 12. International Financial Management

Question 4

Answer:

256
 12. International Financial Management

•
•

Question 5

Answer:

257
 12. International Financial Management

Question 6

Answer:

Question 7

Answer:

258
 12. International Financial Management

Question 8

Answer:

259
 12. International Financial Management

Question 9

Answer:

Question 10

Answer:

260
 12. International Financial Management

Question 11

Answer:

Question 12

Answer:

261
 12. International Financial Management

Question 13

Answer:

Question 14

262
 12. International Financial Management

Answer:

•
•
•
•
•

•
•
•

•
•

Question 15

Answer:

263
 12. International Financial Management

Question 16

Answer:

Question 17

Answer:

264
 12. International Financial Management

Question 18

Answer:

265
 12. International Financial Management

Question 19

Answer:

266
 12. International Financial Management

Question 20

Answer:

267
 12. International Financial Management

Question 21

Answer:

•
•

268
 12. International Financial Management

•
•

Question 22

Answer:

269
 12. International Financial Management

Question 23

Answer:
✓

Question 24

Answer:

270
 12. International Financial Management

Question 25

Answer:

Question 26

Answer:

271
 12. International Financial Management

•
•
•
•

Question 27

Answer:

272
 12. International Financial Management

Question 28

Answer:

Question 29

Answer:

273
 12. International Financial Management

274
 13. Business Valuation

CHAPTER 13
BUSINESS VALUATION
Question 1

Answer:

Question 2

Answer:

Question 3

Answer:

275
 13. Business Valuation

Question 4

Answer:

Question 5

Answer:

276
 13. Business Valuation

Question 6

Answer:

277
 13. Business Valuation

Question 7

Answer:

Question 8

Answer:
✓

✓
✓

278
 13. Business Valuation

Question 9

Answer:
✓

×
✓

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✓

Question 10

Answer:

279
 13. Business Valuation

Question 11

Answer:

Question 12

Answer:

280
 13. Business Valuation

•
•

Question 13

Answer:

281
 13. Business Valuation

Question 14

Answer:

282
 13. Business Valuation

Question 15

Answer:

Question 16

Answer:

283
 13. Business Valuation

Question 17

Answer:

Question 18

Answer:

284
 13. Business Valuation

•
•
•
•

Question 19

Answer:

285
 13. Business Valuation

•
•
•
•

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286
 13. Business Valuation

Question 20

Answer:

•
•

560 Crores
Valuation per User = = ₹23 Per user
24 Crores

× ₹23 =

287
 13. Business Valuation

Question 21

Answer:

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288
 13. Business Valuation

289
 13. Business Valuation

Question 22

Answer:

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290
 13. Business Valuation

Question 23

Answer:

291
 13. Business Valuation

1
Post − Money Valuation = Exit Valuation ×
(1 + Discount Rate)time frame
1
Post − Money Valuation = 500 Crores × = 163 Crores
(1 + 0.25)5

Question 24

Answer:

292
 13. Business Valuation

293
 13. Business Valuation

Question 25

Answer:

Question 26

Answer:

294
 13. Business Valuation

Question 27

Answer:

295
 13. Business Valuation

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296
 13. Business Valuation

Question 28

Answer:

297
 13. Business Valuation

298
 14. Mergers, Acquisitions & Corporate Restructuring

CHAPTER 14
MERGERS, ACQUISITIONS AND
CORPORATE RESTRUCTURING
Question 1

Answer:

299
 14. Mergers, Acquisitions & Corporate Restructuring

Question 2

Answer:

300
 14. Mergers, Acquisitions & Corporate Restructuring

Question 3

Answer:

301
 14. Mergers, Acquisitions & Corporate Restructuring

-
-
-
-
-

Question 4

Answer:

302
 14. Mergers, Acquisitions & Corporate Restructuring

Question 5

Answer:

303
 14. Mergers, Acquisitions & Corporate Restructuring

Question 6

Answer:

•
•

Question 7

304
 14. Mergers, Acquisitions & Corporate Restructuring

Answer:

o
o

Question 8

Answer:

Question 9

Answer:
305
 14. Mergers, Acquisitions & Corporate Restructuring

Question 10

Answer:

306
 14. Mergers, Acquisitions & Corporate Restructuring

Question 11

Answer:
✓

Question 12

Answer:

307
 14. Mergers, Acquisitions & Corporate Restructuring

Question 13

Answer:

•
•
•
•

•
•
•
•
308
 14. Mergers, Acquisitions & Corporate Restructuring

Question 14

Answer:

(i)

(ii)

(iii)

(iv)

Question 15

Answer:

309
 14. Mergers, Acquisitions & Corporate Restructuring

Question 16

Answer:

310
 14. Mergers, Acquisitions & Corporate Restructuring

Question 17

Answer:

311
 14. Mergers, Acquisitions & Corporate Restructuring

Question 18

Answer:

312
 14. Mergers, Acquisitions & Corporate Restructuring

Question 19

Answer:

313
 14. Mergers, Acquisitions & Corporate Restructuring

Question 20

Answer:

Question 21

Answer:

314
 14. Mergers, Acquisitions & Corporate Restructuring

Question 22

Answer:
✓
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✓
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✓

Question 23

Answer:

315
14. Mergers, Acquisitions & Corporate Restructuring

316
 14. Mergers, Acquisitions & Corporate Restructuring

Question 24

Answer:

317
 14. Mergers, Acquisitions & Corporate Restructuring

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Question 25

Answer:

318
14. Mergers, Acquisitions & Corporate Restructuring

319
 14. Mergers, Acquisitions & Corporate Restructuring

Question 26

Answer:

320
 14. Mergers, Acquisitions & Corporate Restructuring

Question 27

Answer:

321
 14. Mergers, Acquisitions & Corporate Restructuring

Question 28

Answer:

322
 14. Mergers, Acquisitions & Corporate Restructuring

Question 29

Answer:

Question 30

Answer:

323
 14. Mergers, Acquisitions & Corporate Restructuring

Question 31

•
•
•
•
•
•

324
 14. Mergers, Acquisitions & Corporate Restructuring

Question 32

Answer:

•
•
•

•
•

325
 14. Mergers, Acquisitions & Corporate Restructuring

Question 33

Answer:

Question 34

Answer:

326
 14. Mergers, Acquisitions & Corporate Restructuring

Question 35

Answer:

•
•
•
•

Question 36

327
 14. Mergers, Acquisitions & Corporate Restructuring

Answer:

•
•

•
•

•
•

328
14. Mergers, Acquisitions & Corporate Restructuring

329
 15. Startup Finance

CHAPTER 15
STARTUP FINANCE
Question 1

Answer:
✓

✓
✓

Question 2

330
 15. Startup Finance

Answer:

‘ ’

Question 3

Answer:

331
 15. Startup Finance

Question 4

Answer:

332
 15. Startup Finance

Question 5

Answer:

333
 15. Startup Finance

Question 6

Answer:

334
 15. Startup Finance

Question 7

Answer:

335
 15. Startup Finance

Question 8

Answer:

336
 15. Startup Finance

Question 9

Answer:

Question 10

Answer:

337
 15. Startup Finance

Question 11

Answer:
✓

✓
✓

338
 15. Startup Finance

Question 12

Answer:

Question 13

Answer:

339
 15. Startup Finance

Question 14

Answer:

Question 15

Answer:

340
 15. Startup Finance

Question 16

Answer:

Question 17

Answer:

o
o

o
o

341
 15. Startup Finance

Question 18

Answer:

342
 15. Startup Finance

Question 19

Answer:

343
 15. Startup Finance

Question 20

Answer:

344
 15. Startup Finance

Question 21

Answer:

345
 15. Startup Finance

Question 22

Answer:
•

Question 23

Answer:

346
 15. Startup Finance

Question 24

Answer:

Question 25

Answer:

347
 15. Startup Finance

Question 26

Answer:

348
Notes

349
Notes

350
AFM COMPILER 5.0- COVERAGE
2024 ICAI STUDY MATERIAL
37 PAST EXAM PAPERS
32 RTP
46 MTP
702 NUMERICALS
421 THEORY QUESTIONS

AUTHOR’S JOURNEY - CA MAYANK KOTHARI

2005 - Cleared 10th State Board Exam with 61%
2007 - Cleared 12th State Board Exam with 56%
2007 - Took a bold step from my small town to Nagpur, igniting my CA journey with
determination and dreams.
2007 - Failed CA Entrance June 2007 Exam - 90 out of 200 Marks
2007 - Failed CA Entrance December 2007 Exam - 95 out of 200 Marks
2008 - Cleared CA Entrance June 2008 Exam - 134 out of 200 Marks
2010 - Cleared CA PCC (now Inter) 2010 - 321 out of 600 Marks
2012 - Cleared CA Final Exam - 417 out of 800 Marks
47th All India Rank
Nagpur Topper
Best Student Award
2012 - Worked at Deloitte Pune for the next 7 Months
2013 - Started Teaching SFM (Now AFM)
2016 - Cleared CFA Level 1 Exam
2017 - Launched Conferenza.in, an online platform for CA, CS, CMA, and CFA classes & books
2020 - Grew Conferenza to an annual turnover of ₹15+ Crores

[email protected] OR CALL 83296-55537