Examination Paper: Portfolio Management
6
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Investments Analysis and Behaviour
Section A: Objective Type (30 marks)
•This section consists of Multiple choices & short note questions.
•Answer all the questions.
•Part one questions carry 1 mark each & Part Two questions carry 5 marks each.
Part One:
Multiple Choices:
1. Which one of the following is the world’s first electronic stock market?
a. American Stock Exchange
b. Nasdaq National Market
c. Bombay stock Exchange
d. New York stock Exchange
2. The highest price that market maker is willing to pay to buy a security, is referred as:
a. Bid
b. Ask
c. Bid Size
d. Ask Size
3. IPOs stands for ________.
a. Indian Premier Offerings
b. Initial Public Offerings
c. Initial Premier Offerings
d. Initial Private Offerings
4. Under the securities act of ______, when a company makes a public offering, it must file a
registration statement with the SEC.
a. 1934
b. 1936
c. 1935
d. 1933
5. It is the chance of loss in the value of fixed- income investment following a rise in interest rates.
a. Risk
b. Credit Risk
c. Interest Rate Risk
d. Expected Return
Examination Paper: Portfolio Management
7
IIBM Institute of Business Management
6. Extreme changes in financial asset values tied to changing economic fundamentals are defined
as______.
a. Irrational Bubbles
b. Rational Bubbles
c. Market bubbles
d. None of the above
7. Rhythmic pattern of contraction and expansion in the overall economy is referred as ______.
a. Contraction
b. Expansion
c. Business Cycle
d. Recession
8. A measure that assesses what others are doing and suggests you should do the opposite, is:
a. Odd lot Indicators
b. Contrary Indicators
c. Mutual fund flow Indicators
d. Brokerage account credit balance indicators
9. Individuals and Institutions that purchase bonds for interest income and long term capital gains
are:
a. Primary Bond Market
b. Bond Dealers
c. Bond Investors
d. Bond Issuers
10. Funds that charge sales feels ranging from One to three percent, are called:
a. Low-Load Funds
b. No-Load Funds
c. Exchange Fee
d. Back- End Load
Part Two:
1. Write a short note on ‘New York Stock Exchange’.
2. What do you understand by ‘Micro Cap Fraud”?
3. Explain the term ‘Treasury Bonds’.
4. Explain the meaning of ‘Mutual Fund’ and its advantages.
END OF SECTION A
Examination Paper: Portfolio Management
8
IIBM Institute of Business Management
Section B: Caselets (40 Marks)
•This section consists of Caselets.
•Answer all the questions.
•Each Caselets carries 20 marks.
•Detailed information should form the part of your answer (Word limit 150 to 200 words).
Case let 1
Recently, In India, we had a issue from Hughes Software Solutions (HSS) which was a milestone in our
growth from fixed price offerings to true price discovery IPOs. While the HSS issue has many positive
IPOs. While the HSS issue has many positive and fascinating features, the design adopted was still
riddled with flaws, and we can do much better. How did the Hughes issue worked?
I. The merchant bankers selected ‘syndicate members’ who helped in selling the issue.
II. Disorders were collected by the merchant bankers or syndicate members (only), and submitted using
the computerized IPO system created by NSE. The NSE system only accepted these orders; it did not
reveal any information to investors.
III. Investors could place, modify or delete orders in the book building period- however; they were doing
this in the blind since the system gave them no information.
IV. The NSE system revealed information to the merchant bankers. The full database of orders was
passes on by NSE to the merchant bankers, who could then use this for discretionary allocation of shares.
Questions:
1. What do you think are the flaws in the public issue of Hughes Software? Enumerate them.
2. Can you construct a model for IPO process, which can help in price discovery in setting the
price at the IPO?
Case let 2
Indian corporate is on the verge of testing the US equity markets. Infosys, despite the volatility in the
international market and the continuous downslide in the Bank of New York American Depository
Receipts (ADRs) index has decided to continue offering its $ 125 million level 3 ADR. It would be the
first Indian company to have the issue listed on the NASDAQ. Many more companies were expected to
follow the suit.
ADRs were first created in 1972, when the UK passed a law that restricted British companies from
registering their shares overseas without a British- based transfer agent. So to meet the appetite of US
investors, a new instrument called the ADRs were created.
Questions:
1. What are the unique features of ADRs that attract Indian companies to list on NASDAQ or
NYSE?
2. What is unsponsored ADR? Why did it become obsolete?
END OF SECTION B
Examination Paper: Portfolio Management
9
IIBM Institute of Business Management
Section C: Applied Theory (30 Marks)
•This section consists of Applied Theory Questions.
•Answer all the questions.
•Each question carries 15 marks.
•Detailed information should from the part of your answer (Word limit 200 to 250 words).
1. Discuss the concept of Macroeconomics environment. What are the major forces that drive the
economy?
2. Explain the following terms:
a. Capital Market Line
b. Security Market Line
S-2-210311
END OF SECTION C
6
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Investments Analysis and Behaviour
Section A: Objective Type (30 marks)
•This section consists of Multiple choices & short note questions.
•Answer all the questions.
•Part one questions carry 1 mark each & Part Two questions carry 5 marks each.
Part One:
Multiple Choices:
1. Which one of the following is the world’s first electronic stock market?
a. American Stock Exchange
b. Nasdaq National Market
c. Bombay stock Exchange
d. New York stock Exchange
2. The highest price that market maker is willing to pay to buy a security, is referred as:
a. Bid
b. Ask
c. Bid Size
d. Ask Size
3. IPOs stands for ________.
a. Indian Premier Offerings
b. Initial Public Offerings
c. Initial Premier Offerings
d. Initial Private Offerings
4. Under the securities act of ______, when a company makes a public offering, it must file a
registration statement with the SEC.
a. 1934
b. 1936
c. 1935
d. 1933
5. It is the chance of loss in the value of fixed- income investment following a rise in interest rates.
a. Risk
b. Credit Risk
c. Interest Rate Risk
d. Expected Return
Examination Paper: Portfolio Management
7
IIBM Institute of Business Management
6. Extreme changes in financial asset values tied to changing economic fundamentals are defined
as______.
a. Irrational Bubbles
b. Rational Bubbles
c. Market bubbles
d. None of the above
7. Rhythmic pattern of contraction and expansion in the overall economy is referred as ______.
a. Contraction
b. Expansion
c. Business Cycle
d. Recession
8. A measure that assesses what others are doing and suggests you should do the opposite, is:
a. Odd lot Indicators
b. Contrary Indicators
c. Mutual fund flow Indicators
d. Brokerage account credit balance indicators
9. Individuals and Institutions that purchase bonds for interest income and long term capital gains
are:
a. Primary Bond Market
b. Bond Dealers
c. Bond Investors
d. Bond Issuers
10. Funds that charge sales feels ranging from One to three percent, are called:
a. Low-Load Funds
b. No-Load Funds
c. Exchange Fee
d. Back- End Load
Part Two:
1. Write a short note on ‘New York Stock Exchange’.
2. What do you understand by ‘Micro Cap Fraud”?
3. Explain the term ‘Treasury Bonds’.
4. Explain the meaning of ‘Mutual Fund’ and its advantages.
END OF SECTION A
Examination Paper: Portfolio Management
8
IIBM Institute of Business Management
Section B: Caselets (40 Marks)
•This section consists of Caselets.
•Answer all the questions.
•Each Caselets carries 20 marks.
•Detailed information should form the part of your answer (Word limit 150 to 200 words).
Case let 1
Recently, In India, we had a issue from Hughes Software Solutions (HSS) which was a milestone in our
growth from fixed price offerings to true price discovery IPOs. While the HSS issue has many positive
IPOs. While the HSS issue has many positive and fascinating features, the design adopted was still
riddled with flaws, and we can do much better. How did the Hughes issue worked?
I. The merchant bankers selected ‘syndicate members’ who helped in selling the issue.
II. Disorders were collected by the merchant bankers or syndicate members (only), and submitted using
the computerized IPO system created by NSE. The NSE system only accepted these orders; it did not
reveal any information to investors.
III. Investors could place, modify or delete orders in the book building period- however; they were doing
this in the blind since the system gave them no information.
IV. The NSE system revealed information to the merchant bankers. The full database of orders was
passes on by NSE to the merchant bankers, who could then use this for discretionary allocation of shares.
Questions:
1. What do you think are the flaws in the public issue of Hughes Software? Enumerate them.
2. Can you construct a model for IPO process, which can help in price discovery in setting the
price at the IPO?
Case let 2
Indian corporate is on the verge of testing the US equity markets. Infosys, despite the volatility in the
international market and the continuous downslide in the Bank of New York American Depository
Receipts (ADRs) index has decided to continue offering its $ 125 million level 3 ADR. It would be the
first Indian company to have the issue listed on the NASDAQ. Many more companies were expected to
follow the suit.
ADRs were first created in 1972, when the UK passed a law that restricted British companies from
registering their shares overseas without a British- based transfer agent. So to meet the appetite of US
investors, a new instrument called the ADRs were created.
Questions:
1. What are the unique features of ADRs that attract Indian companies to list on NASDAQ or
NYSE?
2. What is unsponsored ADR? Why did it become obsolete?
END OF SECTION B
Examination Paper: Portfolio Management
9
IIBM Institute of Business Management
Section C: Applied Theory (30 Marks)
•This section consists of Applied Theory Questions.
•Answer all the questions.
•Each question carries 15 marks.
•Detailed information should from the part of your answer (Word limit 200 to 250 words).
1. Discuss the concept of Macroeconomics environment. What are the major forces that drive the
economy?
2. Explain the following terms:
a. Capital Market Line
b. Security Market Line
S-2-210311
END OF SECTION C
No comments:
Post a Comment