M.B.A.

DEGREE EXAMINATION, NOVEMBER/DECEMBER 2010 Elective BA 9257 SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT (Regulation 2009) Time : Three hours Maximum : 100 Marks Answer ALL questions PART A (10 2 = 20 Marks)] 1. What are the three components of an investors required rate of return on an investment? 2. Differentiate an investor from speculator. 3. What is reverse book building? 4. Explain the current settlement system in NSE. 5. What is industry life cycle analysis? 6. What are Graham and Dodds investor ratios? 7. Differentiate fundamental analysis from technical analysis. 8. Explain the importance of Oscillators in technical analysis. 9. Explain CAPM. 10. How are the portfolios evaluated? PART B (5 16 = 80 Marks)

11. (a) Explain the steps in portfolio / investment management. Or (b) Explain the different types of investment alternatives available for a common investor. 12. (a) Discuss the trading system in stock exchanges. Mention some of the recent reforms in the trading system. Or (b) Discuss the SEBIs Guidelines to the share trading. 13. (a) Explain the salient features you will take into account while doing fundamental analysis. Or (b) Explain some of the key ratios that you will be considering before investing in a stock. Can you depend only on these ratios for making the decision? 14. (a) What are the important points that you will be taking into account while doing Technical analysis? Is Technical analysis a substitute for fundamental analysis? Discuss. Or (b) Explain efficient market theory. 15. (a) Explain the various facets of CAPM in detail.

Or (b) From the given data, evaluate the portfolios using Sharpe, Treynor and Jensens model. Portfolio A Portfolio B Portfolio C Return 20% 25% 18% Beta 1.5 1.6 1.4 Std. Deviation 5% 6% 4% Market return 12% Risk free rate 7%

MS-44 Security Analysis and Portfolio Management June 2010 Question Paper
1. What do you understand by Investment ? Explain the steps involved in the investment process. 2. (a) Define risk. What are the statistical tools that are used to measure risk of securities return ? (b) Mr. Vamsi is considering the purchase of a bond currently selling at Rs. 878.50. The bond has four years to maturity, face value of Rs. 1,000 and 8% coupon rate. The next annual interest payment is due after one year from today. The required rate of return is 10%. (i) Calculate the intrinsic value (present value) of the bond. Should Vamsi buy the bond ? (ii) Calculate the yield to maturity of the bond. 3. Discuss the various measures that have been adopted in India to protect investors interest in securities market. 4. What is market efficiency ? Explain the various anomalies in efficient market hypothesis. 5. (a) In the context of Risk Adjusted returns, briefly explain : (i) Treynors Ratio (ii) Sharpes Ratio (b) Puja and Devika are the two mutual funds Puja has a mean success of 0.15 and Devika has 0.22. The Devika has double the beta of Puja funds 1.5. The standard deviations of Puja and Devika funds are 15% and 21.43%. The mean return of market index is 12% and its standard deviation is 7. The risk free rate is 8%. (i) Compute the Jensen Index for each fund. (ii)Compute the Treynor and Sharpe indices for the funds. Interpret the results. 6. What is portfolio revision ? Why does it arise ? Discuss the various constraints in portfolio revision. 7. Distinguish between any four of the following : (a)Growth Fund and Balanced Fund (b)Ex-dividend and Cum-dividend

(c) Commercial Paper and Commercial Bill of Exchange (d) Self-regulation and Legislative regulation (e) Buy-back of Shares and Surrender of Shares (f)Money Market and Capital Market 8. Write short notes on any four of the following : (a) Investment Vs. Speculation (b) Bullish market (c) Capital market line (d) Technical analysis (e) Efficient portfolio (f) Price-earnings approach