Download JNTU-Hyderabad MBA 3rd Sem R15 2018 Dec 723AH Security Analysis And Portfolio Management Question Paper

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Code No: 723AH

JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD

MBA III Semester Examinations, December - 2018

SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT

Time: 3hours

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Max.Marks:75

Note: This question paper contains two parts A and B.

Part A is compulsory which carries 25 marks. Answer all questions in Part A. Part B consists of 5 Units. Answer any one full question from each unit. Each question carries 10 marks and may have a, b, c as sub questions.

PART - A 5×5 Marks = 25

1. a) Differentiate among investment, speculation and gambling. [5]

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2. b) Describe stages of company life cycle. [5]
3. c) Discuss advantages of investment in bond market. [5]
4. d) What is dividend discount model? [5]
5. e) Differentiate between constant ratio plan and variable ratio plan. [5]

PART - B 5 × 10 Marks = 50

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1. Discuss in detail the various methods of trading financial instrument in secondary market. OR What do you mean by investment? Discuss in detail objectives of investment, what are various alternatives investment available in India in the era of globalization. [10]
2. a) Define margin trading and discuss pros and cons. [10] OR
3. a) What is technical analysis? Discuss following technical analysis tools in details
   1. Stochastic oscillator
   2. moving average
   3. relative strength

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   [5+5]
4. a) Define Efficient Market Hypothesis (EMH)
5. b) What is efficient frontier?
6. c) What are the assumptions of Dow Theory? [10]
7. a) The price of a bond is $920 with a face value of $1000 which is the face value of many bonds. Assume that the annual coupons are $100, which is a 10% coupon rate, and that there are 10 years remaining until maturity. Calculate YTM.

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8. b) What is inflation rate risk and interest risk associated with bonds price? [5+5] OR
9. Write short notes on:
   1. Asset-Backed Securities bonds and Corporate Bonds
   2. How Bond laddering and diversifications reduces the risk associated with bonds? [10]
10. a) If a stock pays a Rs. 4 dividend this year, and the dividend has been growing 6% annually, then what will be the intrinsic value of the stock, assuming a required rate of return of 12%?

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11. b) What are the draw backs using dividend discount model?
12. c) What is Gordons Model for growth firm? [10] OR
13. a) How do we calculate price earning ratio and book value ratio? Mention formula also.
14. b) What is Discounted Cash Flow Valuation Method? [5+5]
15. a) What is the portfolio standard deviation for a two-asset portfolio comprised of the following two assets if the correlation of their returns is 0.5?

    	Asset A	Asset B
    Expected return	10%	20%
    Standard deviation of expected returns	5%	20%
    Amount invested	Rs.40,000	Rs.60,000

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16. b) What is the portfolio return and standard deviation for a two-asset portfolio comprised of the following two assets if the correlation of their returns is 0.5?

    	Asset P	Asset Q
    Expected return	7%	25%
    Standard deviation of expected returns	5%	30%
    Amount invested	Rs.50,000	Rs 50,000
    Correlation	0.40

    [5+5] OR
17. a) What are the assumptions of Capital Assets Pricing Model (CAPM)?
18. b) Following are the information about a stock:
    The current yield on a 10-year treasury is 2.5%
    The average excess historical annual return for stocks is 7.5%
    

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    The beta of the stock is 1.25 (meaning its average weekly return is 1.25x as volatile as the BSE500 over the last 2 years)
    What is the expected return of the security using the CAPM formula? [4+6]

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