FM03
Security Analysis and Portfolio Management
(For CNM Cases)
Assignment – I
Assignment Code: 2016FM03A1 Last Date of Submission: 30th April 2016
Attempt all the questions. All the questions are compulsory and carry equal marks.
Section-A
1. a. ‘No investment is risk free’. In view of this statement, discuss the meaning and
types of investment-risk. Can this be eliminated or minimized, how?
b. Distinguish between the financial and economic meaning of investment. Describe the various stages of investment.
2. Discuss the features of investment avenues available in India. Categorize them into tax saving and non-tax saving avenues and bring out the main features of each avenues.
3. a. Discuss the trading system in stock exchanges in India. Mention some of the recent reforms in the trading system.
b. Explain the institutional structure in Indian capital market.
4. a. Explain the benefit of investment in mutual funds. What are various types of
mutual funds schemes? What are loads and NAV in mutual funds?
b. Use closing price data of June 2013 (from June 1 till June 30) of Sensex and Infosys Ltd. calculate beta of Infosys Ltd. Visit www.bseindia.com for closing price data.
Section-B
Case Study
The following data is offered on two stocks – A and B:
Stock Expected return Standard deviation
A 0.15 0.30
B 0.10 0.20
The correlation between the two stocks is 0.85
Determine the expected return and risk on the following combination of these two stocks:
Combinations % of Stock A % of Stock B
I 70 30
II 50 50
III 40 60
IV 10 90
Case Question:
What will be your conclusion if the correlation between two stocks is negative 0.67 and they are held in the proportion of 60% and 40% respectively?
Security Analysis and Portfolio Management
(For CNM Cases)
Assignment – I
Assignment Code: 2016FM03A1 Last Date of Submission: 30th April 2016
Attempt all the questions. All the questions are compulsory and carry equal marks.
Section-A
1. a. ‘No investment is risk free’. In view of this statement, discuss the meaning and
types of investment-risk. Can this be eliminated or minimized, how?
b. Distinguish between the financial and economic meaning of investment. Describe the various stages of investment.
2. Discuss the features of investment avenues available in India. Categorize them into tax saving and non-tax saving avenues and bring out the main features of each avenues.
3. a. Discuss the trading system in stock exchanges in India. Mention some of the recent reforms in the trading system.
b. Explain the institutional structure in Indian capital market.
4. a. Explain the benefit of investment in mutual funds. What are various types of
mutual funds schemes? What are loads and NAV in mutual funds?
b. Use closing price data of June 2013 (from June 1 till June 30) of Sensex and Infosys Ltd. calculate beta of Infosys Ltd. Visit www.bseindia.com for closing price data.
Section-B
Case Study
The following data is offered on two stocks – A and B:
Stock Expected return Standard deviation
A 0.15 0.30
B 0.10 0.20
The correlation between the two stocks is 0.85
Determine the expected return and risk on the following combination of these two stocks:
Combinations % of Stock A % of Stock B
I 70 30
II 50 50
III 40 60
IV 10 90
Case Question:
What will be your conclusion if the correlation between two stocks is negative 0.67 and they are held in the proportion of 60% and 40% respectively?
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