Financial Forensics End Term: 22 December 2024 (September 2024 term)

A company is facing a lawsuit from a customer. It is possible, but not probable, that the company will have to pay a settlement that management estimates to be ₹3,000,000. How would this fact be reported in the financial statements to be issued at the end of the current month?

You have been offered a job that pays an annual salary of ₹48,000, ₹51,000, and ₹55,000 over the next three years, respectively. The offer also includes a starting bonus of ₹2,500 payable immediately. What is this offer worth to you today at a discount rate of 6.5 percent?

Phil's Carvings wants to have a weighted average cost of capital of 9.5 percent. The firm has an after tax cost of debt of 6.5 percent and a cost of equity of 12.75 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?

A firm has a return on equity of 25 percent. The total asset turnover is 2.4 and the profit margin is 8 percent. The total equity is ₹ 4,100. What is the net income?

According to the CAPM, the expected return on a security is:

What is the relationship between the IRR and the cost of capital?

PQR financials is a loan provider for businesses, and it is evaluating the following companies for providing a loan.
a. Company A: Debt Equity Ratio: 0.8, Times Interest Earned: 8
b. Company B: Debt Equity Ratio: 0.2, Times Interest Earned: 8
c. Company C: Debt Equity Ratio: 0.8, Times Interest Earned: 2
d. Company D: Debt Equity Ratio: 0.2, Times Interest Earned: 2
As a financial analyst of PQR, you have to review the above information and provide a recommendation to the CEO of the company. What would be your recommendation to the CEO, regarding the best company to give the loan to?

At the beginning of the month the company hired workers and employees for a total monthly remuneration of ₹ 75,000 payable at the end of each month. How would this transaction reflect in the income statement and balance sheet at the beginning of the month?

All of the following are long-term liabilities except:

A company provided the following cash flow details under financing activities for the year: ● Proceeds from issuing shares: ₹8,00,000
● Repayment of a long-term loan: ₹4,50,000
● Payment of dividends: ₹1,25,000
● Issuance of new debt: ₹3,00,000
● Share buyback: ₹2,50,000
What is the net cash flow from financing activities?

A fintech company has a ML system that identifies transaction frauds that occur in its system. The model currently has a recall of 99.9%. The fraud rate, as reported by the company in its system is 20 BPS. On a regular day there are close to above 1 million transactions that happens via the company’s payment system, and for each fraudulent transaction the company losses INR 10 on an average. The annual savings (INR) brought in by the ML system is:

A time series dataset shows quarterly sales data for a company over 5 years. The company observes the following characteristics:
● The sales exhibit a linear upward trend of 5 units per quarter.
● A seasonal pattern is present, where sales increase by +20 units in Quater 2 and Quater 4, and decrease by −15 units in Quater 1 and Quater 3.
● The time series is non-stationary due to the trend.
If the sales in Q1 of the first year were 200, what will be the forecasted sales in Q4 of the 5th year, assuming no randomness?

What does the autocorrelation function (ACF) measure in time series analysis?

If a model predicts the positive class for all observations in a binary classification problem with both positive and negative cases present with class balance 1:99 (positive : negative), which of the following statements is true?

What is the KS of the below gains table?

What is the Capture Rate of Bads at top 10%?

What is the Capture Rate of applications having score greater than 273?

The Bankruptcy Bank, one of the major lending banks, has hired you to build a credit underwriting model to help their automated lending decisions. Their definition of default is 60-89 DPD. There is historical loans data since January 1, 2021 till November 30, 2024. Which of the following is true?

Which of the following is used to decide target variable definition?

Which of the following is the last step in credit lifecycle?

Which of the following is the first step in credit lifecycle?

Which of the following is a key property of Shapley values?

What does a large horizontal spread of points in a SHAP summary plot indicate?

In the below summary plot find the model predicted value

Story: The Final Puzzle of the Cursed Map
In the heart of an ancient temple, Emma, Liam, Noah, and Sophia uncovered four fragments of a long-lost map, believed to lead to a hidden treasure—the Heart of Eternity. However, the map was cursed: only three of the four fragments fit together to reveal the location of the treasure. Using their AI assistant, the team converted the fragments into vectors:

The curse demanded that the team identify the three most aligned fragments to unlock the treasure. Using cosine similarity, they must calculate the alignment between every pair of fragments to decide which one to discard. Time is ticking, and the howls of the jungle grow louder…
Based on the above data, answer the given subquestions.

Which three fragments fit best?

Story: The Final Puzzle of the Cursed Map
In the heart of an ancient temple, Emma, Liam, Noah, and Sophia uncovered four fragments of a long-lost map, believed to lead to a hidden treasure—the Heart of Eternity. However, the map was cursed: only three of the four fragments fit together to reveal the location of the treasure. Using their AI assistant, the team converted the fragments into vectors:

The curse demanded that the team identify the three most aligned fragments to unlock the treasure. Using cosine similarity, they must calculate the alignment between every pair of fragments to decide which one to discard. Time is ticking, and the howls of the jungle grow louder…
Based on the above data, answer the given subquestions.

Which pair has the least similarity?

Story: The Final Puzzle of the Cursed Map
In the heart of an ancient temple, Emma, Liam, Noah, and Sophia uncovered four fragments of a long-lost map, believed to lead to a hidden treasure—the Heart of Eternity. However, the map was cursed: only three of the four fragments fit together to reveal the location of the treasure. Using their AI assistant, the team converted the fragments into vectors:

The curse demanded that the team identify the three most aligned fragments to unlock the treasure. Using cosine similarity, they must calculate the alignment between every pair of fragments to decide which one to discard. Time is ticking, and the howls of the jungle grow louder…
Based on the above data, answer the given subquestions.

The highest cosine similarity among the pairs is:

Story: The Final Puzzle of the Cursed Map
In the heart of an ancient temple, Emma, Liam, Noah, and Sophia uncovered four fragments of a long-lost map, believed to lead to a hidden treasure—the Heart of Eternity. However, the map was cursed: only three of the four fragments fit together to reveal the location of the treasure. Using their AI assistant, the team converted the fragments into vectors:

The curse demanded that the team identify the three most aligned fragments to unlock the treasure. Using cosine similarity, they must calculate the alignment between every pair of fragments to decide which one to discard. Time is ticking, and the howls of the jungle grow louder…
Based on the above data, answer the given subquestions.

The cosine similarity between B,D is:

You have a binary classifier that classifies a transaction as "fraud" (model says it is fraud), otherwise we assume it is "not fraud". Assume that:
- 1% of all transactions is fraud
- When an transaction is fraud, the model classifies it as "fraud" 99% of the time
- When an transaction is not fraud, the model classifies it as "not fraud" 99% of the time. What is the precision of the model? Express your answer as a percentage

What is the Roll Back rate for 120-149 DPD after 18 MOB?(in %)

What is the Roll Forward rate for 60-89 DPD after 18 MOB in ?(in %)