1. What are the pros and cons of investing in gold and silver? In what form can you invest in them? 2. Discuss the characteristics and investment features of precious stones. 3. What should you bear...

1. What are the pros and cons of investing in gold and silver? In what form can you invest in them?

2. Discuss the characteristics and investment features of precious stones.

3. What should you bear in mind while investing in paintings and antiques?

4. Mahesh is considering an investment in a commercial property costing Rs. 20 million. Mahesh can get a bank loan of Rs. 8 million at the rate of 12 percent per annum, for purchasing the property. The loan will be repaid in 10 equal installments; the first installment will fall due one year from now. Mahesh expects that the property will fetch a rental income of Rs. 1.8 million for the first year; thereafter the rental income will increase at the rate of 5 percent per year. After 10 years, the property is expected to fetch a net salvage value of Rs.40 million. Mahesh’s required hurdle rate for this project is 13 percent. Is this a worthwhile proposal? Assume that the tax rate is 30 percent.

5. In problem 1, assume that Mahesh collects a deposit equal to 2 years of rent, but the rental income increases by 25 percent every five years. What will be the IRR of the proposal?