Q#1

Future Value to be received in 36 years = $5,070,000

If Shahed invests in Vanguard Group Inc. at rate of 9.99% compounded annually

Calculating its Present Value: -

Present Value = Future Value/(1+ Interest Rate)^36

Present Value = $5,070,000/(1+0.0999)^36

Present Value = $5,070,000/30.8116725448

Present Value = $164,548.03

If Shahed invests in Black Rock, Inc. at rate of 10.99% compounded annually

Calculating its Present Value:-

Present Value = Future Value/(1+ Interest Rate)^36

Present Value = $5,070,000/(1+0.1099)^36

Present Value = $5,070,000/42.6794338918

Present Value = $118,792.58

More amount to be Deposited if she opts Blackrock for her investment = $164,548.03 -
$118,792.58

More amount to be Deposited if if she opts Blackrock for her investment = $45,755.45

Q#2:
The amount is computed as follows:

= Amount of deposit x (1 + interest rate)time period

= $ 3,850,000 x 1.04797.25

= $ 3,850,000 x 1.403843975
 = $ 5,404,799.306

Q#3
Ahmed has a savings amount of $ 1,555,000. He wants to deposit in the bank for Interest
earnings for 15 Years.
Ahmed has the following two investment options:

a) Standard Charted Bank pays 8.99 percent simple interest

b) HSBC pays @ 7.99 percent interest compound annually.

Simple interest formula = P x R x T

= 1,555,000 x 0.0899 x 15
= 20,96917.5
Compound interest rate;
FV = C * (1+i)15
FV = 1,555,000 (1.0799)15
FV = 4,925,876
The best saving option for ahmad to deposit its funds in HSBC because he earns more on his
investment.

Q#4
Loan amount after down payment = QR600,000

Annual interest rate = 3.92% 0.0392/12= 0.00082

Periods = 4*12= 48

Loan payment yearly A = P( r (1+r)n ) / ((1+r)n - 1)

=500,000 (0.00082 (1+0.00082)48) / ((1+0.00082)48- 1)
= 500000*0.00082*(1.040128092) / 0.040128092
Equal monthly installment = 10627.28
Q#5:

FV = 5,350,000, years = n = 10
case 1 : 9.5 % rate
PV = FV/(1+ r)^n =5,350,000/(1+0.095)^10 = 5,350,000/2.47822 = 2,158,807.53
case 2 : 9% rate
PV = FV/(1+ r)^n = 5,350,000/(1+0.09)^10 = 5,350,000/2.36736 = 2,259,901.32
So Amount to be deposited less by = 2,259,901.32- 2,158,807.53= 101,093.79
Answer : 101,093.79

Q#6.

Amount need to be invested today is present value of the required amount

Present value = Future value /(1+rate)^no of years

= 10000000/(1.1199)^15 = 1829411.18

So Rashid need to invest 1829411.18 today

Q#7:

Mariam Inc invested $800,000

Rate of earning =5.59 percent

Rate of savings =4.59 percent

Amount of money after 4 years at the rate of 5.59 percent

Future value = Present value *(1+rate)^no of years

F = 800,000*(1+0.0559)^4

F = 800,000*(1.0559)^4

F = 994,445.865

Amount of money after 4 years at the rate of 5.59 percent

Future value = Present value *(1+rate)^no of years

F = 800,000*(1+0.0459)^4
 F = 800,000*(1.0459)^4

F = 957,305.687

Additional Money earned= (994,445.865-957,305.687)

Additional Money earned= 37,140.178

Q#8:   We use the formula:

A=P(1+r/100)^n

A=future value

P=present value

r=rate of interest

n=time period.

At 8.99%

A=$333,000*(1.0899)^27

=$333,000*10.2197

=$3,403,171.64

At 10.59 %

A=$333,000*(1.1059)^27

=$333,000*15.1471

=$5,043,984.3

Hence excess =$5,043,984.3-$3,403,171.64
=$1640812.66

Question #9
 Future value = $50,000 x (1 + .0859)^50 = $185,948.73
Future value = $50,000 x (1 + .0833^)50 = $147,285.13
Difference = $3079368.485 - $2731537.466
= $ 347831.0189

Question 10:
i). Gross Working Capital:

Current asset
cash $70,000

$36,250
account receivable
Prepaid expenses $5,000

$15,750
Accrued revenues
127000

ii) Net working Capital

working Capital Calculation

Current asset
cash $70,000

$36,250
account receivable
Prepaid expenses $5,000

$15,750
Accrued revenues
127000

Current liabilities
Notes Payable $20,000
Accounts Payable $16,500
36,500
Net Working capital ( Current Asset –Current labilities) 90,500
iii): In reality, gross working capital is not helpful. It just represents one half of the short-term
financial stability and the capacity of an organization to effectively utilize short-term capital.
Present passivity is the other part. Gross working capital or current capital equated to working
capital, which is fewer current liabilities. When working capital is optimistic, existing assets
exceed current liabilities. The ratio of the existing assets to current liabilities (e.g., > 1.0) is the
optimal way to convey positive cash. The ratio is greater than 1 in this issue and its total working
capital is also optimistic.
A review of gross working capital along with existing commitments offers a great deal of
visibility into the activities of a business. Changes in current asset and liability components from
time to time will contribute to further review of the short-term financial situation. Often a
creditor is surprised that the working capital level has dropped below 1.0.
The disparity between existing assets in an undertaking and existing liabilities is network capital
(NWC). This is an indicator of the liquidity and capacity of a firm to fulfil short-term bonds to
finance activities of a company. Ideally, there are more current assets than existing liabilities and
thus a healthy overall working capital balance. In this case the net working capital is 90,500 and
positive.

Q#11
i). Gross working Capital:

Gross working Capital Calculation

Current asset
cash 55000

account receivable 12000

Prepaid expenses 7000

Inventories --
74000

ii). Net Working Capital:

Net working Capital Calculation

Current asset
cash 55000
 account receivable 12000
prepaid expenses 7000
Inventory --

74000
Current liabilities
Notes Payable 8,400

Accounts Payable 5,700

14,100
Net Working capital ( Current Asset –Current labilities) 59,900

iii). “Write the Analysis Report based on the types of working capital”
In reality, gross working capital is not helpful. It just represents one half of the short-term
financial stability and the capacity of an organization to effectively utilize short-term capital.
Present passivity is the other part. Gross working capital or current capital equated to working
capital, which is fewer current liabilities. When working capital is optimistic, existing assets
exceed current liabilities. The ratio of the existing assets to current liabilities (e.g., > 1.0) is the
optimal way to convey positive cash. The ratio is greater than 1 in this issue and its total working
capital is also optimistic.
A review of gross working capital along with existing commitments offers a great deal of
visibility into the activities of a business. Changes in current asset and liability components from
time to time will contribute to further review of the short-term financial situation. Often a
creditor is surprised that the working capital level has dropped below 1.0.
The disparity between existing assets in an undertaking and existing liabilities is network capital
(NWC). This is an indicator of the liquidity and capacity of a firm to fulfil short-term bonds to
finance activities of a company. Ideally, more existing assets than current liabilities would be
available and the overall working capital balance would also be optimistic. The total working
capital in this situation is 59,900 and optimistic.

Q#12:
Assume the cost of capital for both project is 7%,
 PV factor at
year cash flow 7% NNPV
-
0 -500,000 1 500000
1 $170,000 0.9346 158882
2 $160,000 0.8734 139744
53059.
$65,000
3 0.8163 5
4 $100,000 0.7629 76290
5 $130,000 0.713 92690
83287.
$125,000
6 0.6663 5
Net present Value 103953

PV factor at
year cash flow 7% NNPV
-
0 -500,000 1 500000
1 $150,000 0.9346 140190
2 $170,000 0.8734 148478
61222.
$75,000
3 0.8163 5
4 $100,000 0.7629 76290
5 $130,000 0.713 92690
96613.
$145,000
6 0.6663 5
NPV 115484

We calculate the project NPV for two identical projects, both projects have positive NPV. As we
have to select 1 project than we select project B which have higher NPV as compare to Project
A.
Q#13
NPV = Sum of all cash flows discounted at the required return

PV of a cash flow = cash flow/(1+required return)^n

Project Alpha NPV:

NPV = -35,000 + 15,000/ (1+12%) + 26,000/ (1+12%)^2 + 18,500/ (1+12%)^3

= -35000 + 13392.85714 + 18506.28644+ 12812.04446

= 9711
Project Beta NPV:

NPV = -35,000 + 26,500*PVIFA (12%, 2) = -35,000 + 27,000*(1-(1+12%)^-2)/12%

= -35000 + 44787.65

= 9787.65

As the NPV of both projects are positive and both project X and Y are acceptable. However, we
have to select only one project than we select project Y because its NPV is higher than the NPV
of Project X.

Q#14
Deligent Robotics
Statement
showing Cash CANVAS
flows Technology
Particulars Time PVf 18% Amount PV Amount PV
Cash Outflows   -   1.00 (5,60,000) (5,60,000) (4,90,000) (4,90,000.00)
PV of Cash
outflows =
PVCO (5,60,000) (4,90,000.00)
Cash inflows 1.00 0.8475 1,67,000 1,41,525.42 1,92,000 1,62,711.86
Cash inflows 2.00 0.7182 1,77,000 1,27,118.64 1,78,000 1,27,836.83
Cash inflows 3.00 0.6086 1,72,000 1,04,684.51 1,72,000 1,04,684.51
Cash inflows 4.00 0.5158 1,62,000 83,557.80 1,58,000 81,494.64
5.00 0.4371                                               
Cash inflows 1,57,000 68,626.15           -   -  
PV of Cash
Inflows =PVCI 5,25,512.52 4,76,727.85
NPV= PVCI -
PVCO (34,487.48) (13,272.15)
Statement
showing Cash
 flows

NPV of CANVAS Technology is -$34487.48

NPV of Deligent Robotics is -$13272.1
2) As per NPV, none of the project should be accepted because the NPV of both the project is
negative. But NPV of Diligent NPV is better than CANVAS. So if we have two option only to
select between CANVAS and Diligent. Our choice on the basis of NPV is Diligent.

Q#15
His segment is concerned with the styles, modes and function of financial markets etc ("types" in
the heading was placed in inverted commas, because it covers "types, forms, nature, etc."). These
terms belong to the voluminous, misleading vocabulary of the stock industry. A subsection in
this section is designed in this respect to construct a logical structure. The following exhilarating
sections are included in this section:
Primary and secondary Market
The first differentiation that must be made is between spot (also called cash) and derivative
markets. All are subject to the generic industry characteristic. In the spot markets the next degree
of difference are main and secondary markets, the so-called business category.
Discovery of prices 
The discovery of prices is one of the main features of secondary markets. That is the way the
stock markets reach securities exchange rates. (It should be borne in mind that fixed-interest
prices are the opposite of interest rates.) The 'road' corresponds to the trade system and different
trading approaches are covered at a later date. Discovery of prices is significant because they
include knowledge that affects economic decisions, such as whether an enterprise is to increase
output and fund it with a long-term loan or the issue of new shares (rights offer). Price
exploration frequently offers insights into the prices for emerging securities issues that need to be
sold.
Reduction of liquidity and loan costs
Liquidity (some claim marketability, i.e. the capacity to exchange protection easily, without
having any major effect in its price, means the two words meaning the same on capital markets).
It would appear that prices are not negatively influenced in liquid markets by broad orders,
whereas prices can change significantly in limited orders in small markets. It can be assumed that
a liquid market creates a condition of balance in the market more likely. In this way the price
would not be negatively influenced (up or down) whether the buyers and sellers match the same
order, i.e. the price is market clearing. As said, the demand will clear at a much different rate in a
thin market, based on whether buyer orders overweight selling orders (more value), or vice versa
(lower price). In thin stocks, balance is broken.
Support of Primary Market
In favor of the main sector, the secondary market plays a major part. We have also observed that
price discovery in the secondary market helps the main markets to provide hints as to the price of
new problems. The secondary sector offers additional information on the receptivity of the
business towards new problems (which is reflected in the spread). The liquid market obviously
increases issuers' willingness to position shares and reduces prices.
Monetary reform implementation
In terms of eventual control in the interest rates, an active secondary market allows the central
bank to purchase and sell securities to influence the competitiveness of the financial sector. This
assumes that the central bank purchases and sells shares in the free sector.

Q#16
Bank of Investment fulfils the following
An IB has many positions from consulting to fusions and acquisitions. Let us carefully cover
each of the positions.
New stock problems
Whenever an enterprise is public, it looks for public financing and is willing to sell its stock. The
IB then encourages the institutions to acquire any of the shares negotiated with respect to the IPO
(initial public offering). This whole stock issuance phase is sometimes named enterprise. In brief,
the private institution's funds/stocks would be transmitted via underwriting to the market.
Roles in consultation
In addition to the money conversation, investment banks are giving advice to their clients that
brings more capital and more investment. They allow the organization to reach new heightened
levels. Investment banks offer a large customer base and always have financial assistance.
Fusion and procurement
An IB attempts to figure out what the valuation or actual market value is, regardless of
acquisitions. It serves as a bridge to the contract. They motivate you to conclude an agreement
successfully.
Risk and management review
An organization of finance is still vulnerable to problems. An IB allows to determine the goal
region that causes damages. It helps prepare a company against different threats, such as
inflation, credit risks, funding, loans and so on. The company's vulnerability to defeat is always
smaller.

Emirate investment banks.

 Advice to corporate financial institutions: local investment firms have a broad variety of
advisory services on corporate financial matters, such as risk control, deals, capital
structures, credit ratings, and liquidity. As banks manage smaller transactions in size and
value, they are friendly, service-oriented and customer-centric.
 M&A expertise: it is crucial that two or more firms, in the form of fusions and acquisitions,
work together to reap the advantages of synergy. By means of diverse mergers and
acquisitions of depth and purpose, local investment banks in Dubai require similar skills.
 Corporate consultancy: Minor investment banks in Dubai provide corporate consultancy
services in order to continue to concentrate on SMBs of the UAE. They deliver a variety of
club programs, such as M&A, equity and debt consultancy.
 Private investments: private investments in Dubai are one of the main investment banking
services provided. They draw together experienced investors and businesses and support
such sophisticated investors, who appreciate the possible risks and benefits, of selling
complicated securities. In even less time, this allows firms to produce revenue profit.
 Structured investment & other service: Dubai's local investment banks often have structured
investment (as a single securities or securities pack) and other personalized services.
 Structured investments & other services. It is the aim to concentrate on small and medium-
sized businesses so that they can get full support both at home and foreign level with respect
to capital and financial advisory services.

Question Number 17:

As follows, the key distinctions between Islamic and conventional banks are:
A) Interest avoidance by Islamic banks
B) In Islamic banks, rather than capitalism, Islamic structures are used
C)Islamic banks operate in actual wealth; gold, silver or gold and silver currency at least.
You ought to know how a traditional bank functions to explain this better. One of the bank's key
roles is to create artificial wealth by the mechanism of creating loans. More can be found in the
"money formation" on Wikipedia. That's the way it goes.
Let's presume you have $ 1000, you go to a bank for a security deposit. You can receive a fee
from the bank, open the account on your behalf and have your bank account number. The bank
has $1,000 at its disposal now and if you wish to make a withdrawal you will have to meet some
limits, based on the bank rules, the sum you choose to draw and the account form of funds you
have. These constraints do not now seem to be significant, but later.
Another individual comes and makes him call John, John wants capital so that he requests a loan
of $1500 from the bank. The bank has just $1,000, the same $1,000 that you've invested. So
rather than rejecting John the bank, it sends John a slip of paper that states John lent $1,500,
along with whatever interest rate the bank wishes to attach. John will have to give the bank
$1700, note that the bank just has $1000. This is done by the bank in principle for any loan it
leaves. It gives more and charges varying interest rates on various forms of loans in addition to
this. Banks "make" capital from thin air in that way.
Now let's presume that people are choosing to remove all their capital from their accounts, since
banks don't really have so much money in their coffers to satisfy all of their bosses, they would
limit them because they can't withdraw all of their money.
The fact that Islamic law expressly forbids usury, Islamic banks do not deal with credit
formation. So, let's tell the Islamic bank to deposit $1,000. John is coming and has to purchase a
vehicle for $1500. It will purchase the car on behalf of John instead of loaning him the money,
but before he makes a deal that binds him to buy the car from them under whatever payment
schedule they consent to. Thus, the vehicle costs between $1300 and $1500. The bank purchases
the vehicle and is its rightful possession. At the moment John starts paying the car's price by
making payments to the bank. As John pays for his car his part, he can only be the single and full
owner of the car before he pays his final payment.
In Islamic banking, interest is prohibited. IB is dependent on the share of risks, gains & losses,
and trade. There are goods that produce 'account profits,' 'account profits' or 'account leasing,' as
well as commission, exchange and utility charges similar to the traditional banks. (Exchanges of
draughts, lockers, LC, Guarantees, etc.)
Traditional banks don't split earnings because they are profiting more. They promise fixed
interest rates that are often unfair to banks if their investment returns dip below the minimum
guaranteed rates
More focus and funding is provided to the Islamic banking industry in the United Arab Emirates
(UAE). Dubai's Emirates, for example, is developing into a centre for the global Islamic finance
industry. By its 2021 strategic strategy, the US Government encourages the development of the
Islamic banking industry (Emirates Diary, 2015). There are currently 23 local banks and 22
global banks operating in the United Arab Emirates. 5 of the 23 local banks are fully-fledged
Islamic banks, as set out in Appendix (1), and the rest have a scheme, Islamic and conventional
operations (Emirates Diary, 2015).

Q#18:

It serves as a secondary market in the stock exchange by publicly held shareholders, bonds
provided by federal or state administrations, local public and mutual funds entities as well as
financial products authorised by other local or international DFMs.
A compliant Shari'a exchange

DFM work according to the values of Shari'a and that represents clearly his optimistic vision The
Vice President of the United Arab Emirates, the Prime Minister and the Dubai Ruler, Sheik
Mohammed bin Rashid Al Maktoum.

Regulated by the Authority for Securities and Goods (SCA)

The Dubai Financial Market (DFM) is controlled by the SCA, a UAE body which has the
authority to enforce legislation and requirements to comply with. DFM partners with SCA to
secure customers and establish an optimal business platform, including programmes like Margin
Trading Growth and Delivery v Payment (DvP) processes.

The first regional exchange to strengthen its activities

In 2010, Nasdaq Dubai strengthened its business with the Dubai Financial Sector to shape
dynamic strength in the capital markets of the country. The convergence offers investors a
greater range of asset classes and better access to shares listed by DFM and Nasdaq Dubai
through the single investor number (NIN).

SCA DFM and Dubai Nasdaq Dubai Dubai Financial Services Authority continue to oversee the
markets independently (DFSA).

“DIFC iis ia ifree izone iestablished iin i2002 iby iDubai iGovernment ito iprovide iphysical,
imarket iand ifinancial iinfrastructure irequired ito iset iup iand ioperate ia ithriving
icommodities imarketplace. iSeveral ileading ibanks, iasset imanagement icompanies, iinsurance
icompanies, ilaw iservices iand iconsulting icompanies ihave iset iup ioffices iin iDIFC. iDIFC
iaims ito iestablish iDubai ias ithe iglobal ifinancial ihub”

The Dubai Financial Market (DFM) was founded in 2000 as a Public Entity in the Dubai
Financial Market (DFM). DFM was set up as a public joint stock company, according to the
2005 Executive Council Decree. The first of the sort in the area was 20 percent of the shares of
DFM that were sold for public subscription. It is the world's first stock exchange to respect the
laws of Islamic Sharia. DFM deals with equity products, investment instruments, ETFs and loan
and investing shares.