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1. b 2. a 3. d 4. b 5. c 6. b 7. a 8. d 9. c 10. a 11. a 12. b 13. b 14. c 15. b 16. b 17. a 18. c 19. d 20. d
21. A
B. The net asset value of a mutual fund investing in stock rises with
a. higher stock prices
b. lower equity values
c. an increased number of shares
d. increased liabilities
D. Which of the following is on the horizontal axis of the Security Market Line?
a. Standard deviation
b. Beta
c. Expected return
d Required return
E. What is a call?
a. An option to sell stock at a specified price
b. An option to buy stock at a specified price
c. An option to sell stock on a specified date
d. An option to buy stock on a specified date
c) Inefficient portfolios
d) Efficient portfolios
Section – B
Section – C
LONG ANSWER TYPE QUESTIONS:
This contains 12 Marks each
1. Define Fundamental Analysis? Explain the concept and significance of economic Analysis.
2. What is Ratio Analysis? Discuss the merits and demerits of ratio analysis.
3. What are derivatives? Explain concept and characteristics of FUTURE contract?
4. Explain the benefits and limitations of CAPM.
5. Define CAPM. Write on its assumptions.
6. Write on Arbitrage Pricing Model.
7. Define Arbitrage Pricing Theory.
8. What is the need for portfolio revision?
9. What are the portfolio revision strategies?
10. Write on portfolio revision practices.
11. Write about the constraints in portfolio revision.
12. What are the basic assumptions and ground rules of formula plans?
13. Write a short note on constant dollar-value plan.
14. What do you understand by dollar cost averaging?
15. Why should capital markets be efficient?
16. Explain overall efficient market hypothesis (EMH) and the empirical tests of the hypothesis into three
sub-hypotheses.
17. Write on efficient frontier (i) risk-free and (ii) risky lending and borrowing.
18. What are the tools of evidence for market efficiency?
19. What do you mean by leveraged portfolio?
20. Write on weak-form and the random walk.
21. Explain testing market efficiency.
22. Why are considerations of time important in financial decision making? How can time be adjusted.
23. Critically examine the advantages and disadvantages of raising of funds by issuing shares of different
types?
24. What different forms of securities can limited company issue? Discuss their significance in detail in
relation to the financial structure of the company.
25. Give the meaning of preference shares and mention its various kinds. Write also its advantages and
disadvantages.
26. What is equity share? What are its advantages and disadvantages. Give the distinctions between shares
and debentures.
27. Explain clearing and settlement in the case of derivatives.
28. What are the factors have been driving the growth of financial derivatives?
29. Enumerate the basic difference between a forward contract and a futures contract.
30. Write notes on SWOT Analysis.
31. Who are the major players in the futures market?
32. How are prices determined under futures contracts?
33. List out the simple strategies played in the futures market.
34. Explain return and risk characteristics of individual assets.
35. Write a note on expected return and risk of a portfolio.
36. What do you mean by portfolio selection problem?
37. Write on portfolio selection process that entails four basic steps.
38. Define optimal portfolio. How is it important in investment decisions?
39. Write on weak-form and the random walk.
40. Explain testing market efficiency.
41. Write a brief note on risk and investor preferences.
Composed by: - PIYUSH R SAHAY
Asst. Professor/St. Xavier’s College, Patna /PIYUSHRSAHAY@GMAIL.COM
Course/semester: BBA Semester–V | Course Code: BBA 503
Name of the Paper: Security analysis and portfolio Management
Name of the Teacher: Mr. Piyush Ranjan Sahay
YEAR—2018
42. What are the steps we take when selecting the best portfolio?
43. Write a note on simple Sharpe portfolio optimization.
44. Explain Markowitz model – the mean-variance criterion.
45. Explain the benefits and limitations of CAPM.
46. Define CAPM. Write on its assumptions.
47. Define Technical Analysis? Explain various techniques of technical Analysis?
48. Explain DOW Theory?
49. Explain Empirical Test? Illustrate Comparison of random walk, technical & fundamental analysis.
50. What is investment Management? Explain the philosophy of individual & institutional investors.
2. How would you measure Market Risk, Business Risk, Interest Rate Risk and Inflation Risk?
3. Using CAPM, how do you go about calculating risk premium for a given equity share. Elucidate.
4. What are. the basic assumptions of Arbitrage Pricing Theory? State its merits and demerits.
5. "In an efficient capital market, individual security prices fully reflect all available information". Discuss.
6. What do you mean by Company Analysis? What financial statements are helpful in understanding the
company's prospects?
7. Explain EMH in its various forms and state its assumptions and uses.
8. Explain 'Dow Theory'. How can it be used to determine the direction of the stock market?
9. Explain the Security Market Line with the help of a diagram. How does it differ from the Capital
Market Line?
10. What is Portfolio Theory? Explain the assumptions and principles underlying the portfolio theory.
11. As an investment consultant, what features would you suggest to be included in the investment
bunch of a client? Explain these features briefly.
12. Why does diversification lead to a reduction in unique risk? Explain both intuitively and
mathematically.
13. What is an income fund? Explain its objective and investment priorities.
14. Portfolios that buy new securities and sell old holdings frequently will outperform portfolios that are
managed more passively. Do you agree with this statement?
15. What does the efficient market hypothesis imply with respect to technical market analysis,
fundamental analysis, and portfolio policy of investors?
16. Based on the current theoretical and empirical development of APT, do you think that this approach
offers a practical alternative to the CAPM for individual investors?
Q31. What are the basic assumptions and limitations of CAPM model?
Q32. List down any five differences between futures contract and forward contract.
Q33. Explain the modern approach in the construction of the portfolio.
Q34. Discuss the scope of index futures in Indian capital market.
Q35. How does technical analysis differ from the fundamental analysis?
Q36. How do volume and breadth of the market indicate the trend of the market?
Q37. What are point and figure chart, and how it is used?
Q38. Explain the strong form of market efficiency with empirical evidences.
Q39. Carry out SWOT analysis for any industry of your choice.
Q40. Explain the factors that have the most significant effect on the industry’searnings.
Composed by: - PIYUSH R SAHAY
Asst. Professor/St. Xavier’s College, Patna /PIYUSHRSAHAY@GMAIL.COM
Course/semester: BBA Semester–V | Course Code: BBA 503
Name of the Paper: Security analysis and portfolio Management
Name of the Teacher: Mr. Piyush Ranjan Sahay
YEAR—2018
44. "No Investment Decisions are made wiihout calculating risk." Do you agree ? As an Investment
Manager of a firm, discuss the various steps involved in the investment decision making process.
45. What are the various methods of floating the new issue ? Discuss the roles played by the
Underwriter and the Bankers to the issue.
46. 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 (prerent value) of
the bond. Should Vamsi buy the bond ?(ii) Calculate the yield to maturing of the bond.
47. Explain fully the role played by the SEBI in the securities market as a regulator and as a developer of
the capital market.
48. What are the major criticisms of the technical analysis ? Do the technical analysis and the
fundamental analysis give complementary information about securities for making informal decisions ?
Explain.
49. Explain
a) Explain briefly capital Market line.
b) Explain the process of calculating the portfolio return.
c) What is meant by security market line?
d) Distinguish between put and call options.
e) What are the basic features of futures
50. Discuss the Markowitz Theory of Portfolio Selection. How does Markowitz Theory help in planning
an investor's portfolio ?
51 An aggressive Mutul Fund promises an expected rate of retum of 18% with a standard deviation of
22%. On the other hand, a conservative mutual fund promises an expected rate of return of 16% and
fluctuations of 13%.(i) In which of the funds would you like to invest ?(ii) Would you like io invest in both
the funds ?(iii) If you can borrow money from you provident fund at an opportunity cost of 15%, in
which fund would you invest your money ?
52. Explain the concept of 'Mutual Fund'. What factors should be considered before selecting a Mutual
Fund ? Discuss the present state of the Muiual Funds in India and outline the risks involved in investing
in Mutual Funds.
53. What is Technical Analysis ? Explain it's limitations.
54. Distinguish between Bond and Debenture. 55 What are the various types of risk in portfolio
management ? Also discuss relationship between them.
56 What is importance of diversification in portfolio management
57.(a) Define efficient market hypothesis in each of its its three forms.(b) Explain in detail Random Walk
Theory.
58. Explain connectivity between primary market and secondary market.
59. Distinguish between capital market line and security market line.
60 (a) Explain in brief various intermediaries of financial market and in detail explain "Broker" and
different types of broker.(b) Role of underwriters.
Composed by: - PIYUSH R SAHAY
Asst. Professor/St. Xavier’s College, Patna /PIYUSHRSAHAY@GMAIL.COM
Course/semester: BBA Semester–V | Course Code: BBA 503
Name of the Paper: Security analysis and portfolio Management
Name of the Teacher: Mr. Piyush Ranjan Sahay
YEAR—2018
61 A bond has a remaining maturity of 5 years. It pays a coupon of 8% annually for first two years and
10% for next three years and is currently trading at Rs. 140. If Mr. X expected yield is 10%, calculate
price of the bond of maturity if it redeemed at a premium of Rs. 2. Should Mr. X buy these bonds at Rs.
94 ?
62. What is the value of zero-coupon bond that has 10 years remaining to maturity and has yield to
maturity of 10% and when we know that half of the face is redeemed after 5 years.
63. List out various investment options ? Explain any five of them in detail.
Q.64 Explain: (a) Dow theory(b) Odd lot trading(c) Point and Figure charts(d) Serial bond(e) Superfluous
Diversification(f) Market Risk65.(a) What are the two major types of information necessary for security
analysis(b) What are the features of preference shares.
(c) . What do you mean by underwriting.
66(a). What do you understand by fundamental approach to security analysis (b) . Explain the three
types of trends in stock prices(c). What do you infer from the moving average theory of technical
analysis
67. (a) . What is an index fund.(b) What is the difference between SML AND CML.(c). What is
demutualization of stock exchanges
68. As an investment advisor what features would you suggest to be included in the investment bunch
of a client explain the features briefly.
69. security analysis requires as first step the sources of information on the basis of which analysis is
made. What are different types of information used for security analysis
70. Who are the key players involved in the new issues market.
71. What are the objectives and functions of SEBI
72. Industry life cycle exhibits the status of the industry and gives the clue to entry and exit for investors.
Elucidate.
73. How does ratio analysis reflect the financial healthof a company.
74. How would you use ROC to predict the stock price movement . kindly elucidate with example.
75.Chart patterns are helpful in predicting the stock price movement comment.
76. What are the basic assumptions of CAPM. What are the advantages of adopting CAPM model in the
portfolio management.
77. What factors might an individual take into account in determining his or her investment policy?
Distinguish between technical and fundamental Security Analysis.
78. Discuss why the concepts of covariance and diversification are closely related.
79. Assume the two securities, A and B, constitute the market portfolio. Their proportions and variances
are .39, 160, and .61, 340, respectively.The covariance of the two securities is 190. Calculate the betas of
the two securities.
80. How would you expect yield spreads to respond to the following macroeconomic events: recession,
high inflation, Tax cuts, Stock Market decline, improved trade balance? Explain the reasoning behind
each of your answers.
81. How would an increase in the perceived riskiness of a common stock’s future cash flows affect its
price-earnings ratio? Explain intuitively and Mathematically.
82. Give an example of an industry you feel has positive competitive conditions for your selection as an
industry to invest in. Why have you selected this industry?
Composed by: - PIYUSH R SAHAY
Asst. Professor/St. Xavier’s College, Patna /PIYUSHRSAHAY@GMAIL.COM
Course/semester: BBA Semester–V | Course Code: BBA 503
Name of the Paper: Security analysis and portfolio Management
Name of the Teacher: Mr. Piyush Ranjan Sahay
YEAR—2018
83. A ratio spread amounts to buying a call option and selling two call options. The exercise price of the
option purchased is loss than that of the two options sold. How does this strategy differ from a more
regular bull or bear spread?
84. Analysis of mutual fund performance has been extensive. What does the evidence indicate about the
ability of mutual fund managers, as a group, to produce positive abnormal returns consistently?
85. Explain any FOUR of the following: (a) Zero Coupon Bonds.(b) Yield-to-maturity.(c) Underwriters(d)
Technical Analysis(e) Sweat Equity.(f) Return on equity
86. What is meant by fundamental analysis? How does fundamental analysis differ from technical
analysis?
87. Explain the Sharper Index Model? How does it differ from Markowitz model?
88. Explain CAPM theory and its validity in the stock market.
89. What are the statistical tools used to measure the risk of securities return? Explain.
90. Discuss the relationship between fundamental analysis and efficient market hypothesis.
91. The Company ABC’s next year dividend per share is expected to be Rs.3.50. The dividend in
subsequent years is expected to grow at a rate of 10% per year. If the required rate of return is 15% per
year, what should be its price? The prevailing market price is Rs.75.
92. The following information is available.Stock A Stock BExpected return 16% 12%Standard deviation
15% 8%Coefficient of correlation 0.60.(a) What is the covariance between stocks A and B?(b) What is
the expected return and risk of a portfolio in which A and B have weights of 0.6 and 0.4?
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93. Define Risk. What are different types of risks ? Explain the methods of risks handling.
94. Explain briefly the functions of the Stock Market in India. Critically evaluate the role of SEBI as stock
market developer and regulator.
95.Define Industry Analysis and bring out its relevance for selecting equity snlares for investment.
96. Why should an investor include non-security forms of investment in his portfolio ? Outline the
various investment avenues in the Indian Money Market.
97. What is the risk of a Portfolio ? Under what conditions can the portfolio risk be minimized ?
98.What is efficient frontier ? Explain about the capital market line and choice of an optimal portfolio, if
borrowing rate is allowed to exceed the lending rate.
(b) A security pays a dividend of Rs. 385 and currently sells at Rs. 83. The security is expected to sell at
Rs. 90 at the end of the year. The security has a beta of 1.15. The risk free rate is 5 per cent and the
expected return on market index is 12 per cent.
Assess whether the security is correctly priced.
99. What are benchmark portfolios ? How are they used to evaluate the performance of a portfolio
manag er ? Discuss with suitable examples.