Download Anna University (AU) MBA ( Master of Business Administration) Important Question Bank 3rd Sem BA5012 Security Analysis and Portfolio Management (Latest Important Questions Unit Wise)
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
FirstRanker.com - FirstRanker's Choice
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
FirstRanker.com - FirstRanker's Choice
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
What are the investor?s objectives in investing his funds in the stock
market?
Level 1 Remembering
2
Explain the various choices of Investment alternatives
available for an Investor with moderate risk taking capabilities.
Level 2 Understanding
3
Identify the different investment alternatives in India.
Level 3 Applying
4
(i)Without adequate information the investor cannot carry out his
investment programme. Analyse.(8 marks)
Level 4 Analysing
(ii)Elucidate if there will be a trade- off between risk and return in
Investments? (5 marks)
5
(i)Discuss the various features of mutual funds. (5 marks)
Level 5 Evaluating
(ii)Discuss the various mutual fund schemes available for
investors. (8 marks)
6.
(i) There are so many types of bonds - Interpret. (7marks)
Level 6 Creating
(ii) Interpret the various types of preference shares. (6marks)
7
A bond of Rs.1000 face value bearing a Coupon rate of 12%
will mature after 7 years.
(i)What is the value of the bond if the discount rates is 14%?(7marks)
(ii)What is the value of the bond if the discount rates is12%?(6 marks)
Level 1 Remembering
8
Anand owns Rs.1000 face value bond with five years to maturity.
The bond has an annual coupon of Rs.75. The bond is currently
priced at Rs.970.
Given an appropriate discount rate of 10%, Explain whether Anand
should hold or sell the Bond?
Level 2 Understanding
9
i) Identify the price of Rs.1000 Zero Coupon bond with yield to
maturity of 18% and 10 years to maturity.(5 marks)
ii) What is YTM of this bond if its price is Rs.220? (8 marks)
Level 3 Applying
10
Prem is considering the purchase of a bond Currently selling at
Rs.878.50. The bond has four years of maturity, face value of
Rs.1000 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
Prem buy the bond? (5 marks)
ii) Calculate the yield to maturity of the bond. (8 marks)
Level 4 Analysing
11
The returns on securities A and B are given below :
Probability Security A Security B
0.5 4 0
Level 1 Remembering
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?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
What are the investor?s objectives in investing his funds in the stock
market?
Level 1 Remembering
2
Explain the various choices of Investment alternatives
available for an Investor with moderate risk taking capabilities.
Level 2 Understanding
3
Identify the different investment alternatives in India.
Level 3 Applying
4
(i)Without adequate information the investor cannot carry out his
investment programme. Analyse.(8 marks)
Level 4 Analysing
(ii)Elucidate if there will be a trade- off between risk and return in
Investments? (5 marks)
5
(i)Discuss the various features of mutual funds. (5 marks)
Level 5 Evaluating
(ii)Discuss the various mutual fund schemes available for
investors. (8 marks)
6.
(i) There are so many types of bonds - Interpret. (7marks)
Level 6 Creating
(ii) Interpret the various types of preference shares. (6marks)
7
A bond of Rs.1000 face value bearing a Coupon rate of 12%
will mature after 7 years.
(i)What is the value of the bond if the discount rates is 14%?(7marks)
(ii)What is the value of the bond if the discount rates is12%?(6 marks)
Level 1 Remembering
8
Anand owns Rs.1000 face value bond with five years to maturity.
The bond has an annual coupon of Rs.75. The bond is currently
priced at Rs.970.
Given an appropriate discount rate of 10%, Explain whether Anand
should hold or sell the Bond?
Level 2 Understanding
9
i) Identify the price of Rs.1000 Zero Coupon bond with yield to
maturity of 18% and 10 years to maturity.(5 marks)
ii) What is YTM of this bond if its price is Rs.220? (8 marks)
Level 3 Applying
10
Prem is considering the purchase of a bond Currently selling at
Rs.878.50. The bond has four years of maturity, face value of
Rs.1000 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
Prem buy the bond? (5 marks)
ii) Calculate the yield to maturity of the bond. (8 marks)
Level 4 Analysing
11
The returns on securities A and B are given below :
Probability Security A Security B
0.5 4 0
Level 1 Remembering
0.4 2 3
0.1 0 3
i) What is the expected return for security A and B.? The security
has to be selected on the basis of return and risk.(4 marks )
ii) If the investor invests an equal proportion on both the scrips,
what would be the return? ( 4 marks )
iii)If the proportion is changed to 25 % and 75 % what would be the
return?( 5 marks)
12
How would you summarize the statement ?The investment process
involves a series of activities starting from the policy formulation??
Level 2 Understanding
13
Returns for a stock has the following probability distribution :
Possible Returns Probability of
Occurrence
-25 0.05
-10 0.10
0 0.10
15 0.15
20 0.25
30 0.20
35 0.15
(i)Calculate the variance (9 marks )
(ii)Also calculate the standard deviation( 4 marks )
Level 4 Analysing
14
i) Mention the Characteristics Of Investment in Real Estate. (5marks)
Level 1 Remembering
ii) What are the characteristics of investments in Mutual funds?
(8 marks)
PART - C
S.NO QUESTIONS
1
Assume that you know for certain that market is heading towards the boom period. Should you
buy a common stock based upon this information?
2
R.S Verma is considering investing in a bond currently selling for Rs.8785.07. The bond has
four years to maturity, a Rs.10, 000 face value and a 8% Coupon rate. The next annual interest
payment is due one year from today. The approximate discount factor for investments of
similar risk is 10%.
i)Calculate the intrinsic value of the bond. Based on this calculation, should Verma purchase
the bond.(8 marks)
ii)Calculate the YTM of the bond .Based on this calculation, should Verma purchase the
bond.(7 marks)
3
A mutual fund has earned an average annual return of 24 per cent over a five year period while
the average market return over the same period was only 18 per cent. The risk free rate
prevailing at the time was 7.5 per cent. The mutual fund had a beta of 1.45. The standard
deviation of return of the mutual fund and the market index were 40 percent and 30 per cent
FirstRanker.com - FirstRanker's Choice
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
What are the investor?s objectives in investing his funds in the stock
market?
Level 1 Remembering
2
Explain the various choices of Investment alternatives
available for an Investor with moderate risk taking capabilities.
Level 2 Understanding
3
Identify the different investment alternatives in India.
Level 3 Applying
4
(i)Without adequate information the investor cannot carry out his
investment programme. Analyse.(8 marks)
Level 4 Analysing
(ii)Elucidate if there will be a trade- off between risk and return in
Investments? (5 marks)
5
(i)Discuss the various features of mutual funds. (5 marks)
Level 5 Evaluating
(ii)Discuss the various mutual fund schemes available for
investors. (8 marks)
6.
(i) There are so many types of bonds - Interpret. (7marks)
Level 6 Creating
(ii) Interpret the various types of preference shares. (6marks)
7
A bond of Rs.1000 face value bearing a Coupon rate of 12%
will mature after 7 years.
(i)What is the value of the bond if the discount rates is 14%?(7marks)
(ii)What is the value of the bond if the discount rates is12%?(6 marks)
Level 1 Remembering
8
Anand owns Rs.1000 face value bond with five years to maturity.
The bond has an annual coupon of Rs.75. The bond is currently
priced at Rs.970.
Given an appropriate discount rate of 10%, Explain whether Anand
should hold or sell the Bond?
Level 2 Understanding
9
i) Identify the price of Rs.1000 Zero Coupon bond with yield to
maturity of 18% and 10 years to maturity.(5 marks)
ii) What is YTM of this bond if its price is Rs.220? (8 marks)
Level 3 Applying
10
Prem is considering the purchase of a bond Currently selling at
Rs.878.50. The bond has four years of maturity, face value of
Rs.1000 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
Prem buy the bond? (5 marks)
ii) Calculate the yield to maturity of the bond. (8 marks)
Level 4 Analysing
11
The returns on securities A and B are given below :
Probability Security A Security B
0.5 4 0
Level 1 Remembering
0.4 2 3
0.1 0 3
i) What is the expected return for security A and B.? The security
has to be selected on the basis of return and risk.(4 marks )
ii) If the investor invests an equal proportion on both the scrips,
what would be the return? ( 4 marks )
iii)If the proportion is changed to 25 % and 75 % what would be the
return?( 5 marks)
12
How would you summarize the statement ?The investment process
involves a series of activities starting from the policy formulation??
Level 2 Understanding
13
Returns for a stock has the following probability distribution :
Possible Returns Probability of
Occurrence
-25 0.05
-10 0.10
0 0.10
15 0.15
20 0.25
30 0.20
35 0.15
(i)Calculate the variance (9 marks )
(ii)Also calculate the standard deviation( 4 marks )
Level 4 Analysing
14
i) Mention the Characteristics Of Investment in Real Estate. (5marks)
Level 1 Remembering
ii) What are the characteristics of investments in Mutual funds?
(8 marks)
PART - C
S.NO QUESTIONS
1
Assume that you know for certain that market is heading towards the boom period. Should you
buy a common stock based upon this information?
2
R.S Verma is considering investing in a bond currently selling for Rs.8785.07. The bond has
four years to maturity, a Rs.10, 000 face value and a 8% Coupon rate. The next annual interest
payment is due one year from today. The approximate discount factor for investments of
similar risk is 10%.
i)Calculate the intrinsic value of the bond. Based on this calculation, should Verma purchase
the bond.(8 marks)
ii)Calculate the YTM of the bond .Based on this calculation, should Verma purchase the
bond.(7 marks)
3
A mutual fund has earned an average annual return of 24 per cent over a five year period while
the average market return over the same period was only 18 per cent. The risk free rate
prevailing at the time was 7.5 per cent. The mutual fund had a beta of 1.45. The standard
deviation of return of the mutual fund and the market index were 40 percent and 30 per cent
respectively. Calculate Fama?s net selectivity for the fund, showing the decomposition of
performance.
4
Consider two situations: a young man X in early twenties and another young man Y in the
late thirties. X and Y earns same amount of money. Mr. Y has a family, a car and all the
encumbrances related with the marital status. Both of them like to invest in securities, what
would be their constraints and objectives.
UNIT ? II ? SECURITIES MARKETS
SYLLABUS: Financial Market - Segments ? Types - - Participants in financial Market ? Regulatory
Environment, Primary Market ? Methods of floating new issues, Book building ? Role of primary
market ? Regulation of primary market, Stock exchanges in India ? BSE, OTCEI , NSE, ISE, and
Regulations of stock exchanges ? Trading system in stock exchanges ?SEBI.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is Book building and IPO?
Level 1 Remembering
2
Explain reverse book building
Level 2 Understanding
3
Identify the different types of security markets.
Level 3 Applying
4
Analyse the meaning of underwriting.
Level 4 Analysing
5
What is your opinion about primary market?
Level 5 Evaluating
6
Interpret the role of Capital Market.
Level 6 Creating
7
Identify the importance of IPO grading. What decisions
are taken before going in for IPO?
Level 1 Remembering
8
Explain the meaning of oversubscription.
Level 2 Understanding
9
What facts would you select to show that OCTEI is
different from other stock?
Level 3 Applying
10
Analyse the parties involved in issue of shares in stock
market.
Level 4 Analysing
11
What is the rolling settlement in trading of securities?
Level 5 Evaluating
12
Interpret whether trading on margin a good idea.
Level 6 Creating
13
Who are the participants in financial market?
Level 1 Remembering
14
Distinguish between capital market and money market.
Level 2 Understanding
15
Identify objectives of OTCEI.
Level 3 Applying
16
Compare BSE and NSE.
Level 4 Analysing
17
What is insider trading?
Level 1 Remembering
18
Explain an odd lot.
Level 2 Understanding
FirstRanker.com - FirstRanker's Choice
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
What are the investor?s objectives in investing his funds in the stock
market?
Level 1 Remembering
2
Explain the various choices of Investment alternatives
available for an Investor with moderate risk taking capabilities.
Level 2 Understanding
3
Identify the different investment alternatives in India.
Level 3 Applying
4
(i)Without adequate information the investor cannot carry out his
investment programme. Analyse.(8 marks)
Level 4 Analysing
(ii)Elucidate if there will be a trade- off between risk and return in
Investments? (5 marks)
5
(i)Discuss the various features of mutual funds. (5 marks)
Level 5 Evaluating
(ii)Discuss the various mutual fund schemes available for
investors. (8 marks)
6.
(i) There are so many types of bonds - Interpret. (7marks)
Level 6 Creating
(ii) Interpret the various types of preference shares. (6marks)
7
A bond of Rs.1000 face value bearing a Coupon rate of 12%
will mature after 7 years.
(i)What is the value of the bond if the discount rates is 14%?(7marks)
(ii)What is the value of the bond if the discount rates is12%?(6 marks)
Level 1 Remembering
8
Anand owns Rs.1000 face value bond with five years to maturity.
The bond has an annual coupon of Rs.75. The bond is currently
priced at Rs.970.
Given an appropriate discount rate of 10%, Explain whether Anand
should hold or sell the Bond?
Level 2 Understanding
9
i) Identify the price of Rs.1000 Zero Coupon bond with yield to
maturity of 18% and 10 years to maturity.(5 marks)
ii) What is YTM of this bond if its price is Rs.220? (8 marks)
Level 3 Applying
10
Prem is considering the purchase of a bond Currently selling at
Rs.878.50. The bond has four years of maturity, face value of
Rs.1000 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
Prem buy the bond? (5 marks)
ii) Calculate the yield to maturity of the bond. (8 marks)
Level 4 Analysing
11
The returns on securities A and B are given below :
Probability Security A Security B
0.5 4 0
Level 1 Remembering
0.4 2 3
0.1 0 3
i) What is the expected return for security A and B.? The security
has to be selected on the basis of return and risk.(4 marks )
ii) If the investor invests an equal proportion on both the scrips,
what would be the return? ( 4 marks )
iii)If the proportion is changed to 25 % and 75 % what would be the
return?( 5 marks)
12
How would you summarize the statement ?The investment process
involves a series of activities starting from the policy formulation??
Level 2 Understanding
13
Returns for a stock has the following probability distribution :
Possible Returns Probability of
Occurrence
-25 0.05
-10 0.10
0 0.10
15 0.15
20 0.25
30 0.20
35 0.15
(i)Calculate the variance (9 marks )
(ii)Also calculate the standard deviation( 4 marks )
Level 4 Analysing
14
i) Mention the Characteristics Of Investment in Real Estate. (5marks)
Level 1 Remembering
ii) What are the characteristics of investments in Mutual funds?
(8 marks)
PART - C
S.NO QUESTIONS
1
Assume that you know for certain that market is heading towards the boom period. Should you
buy a common stock based upon this information?
2
R.S Verma is considering investing in a bond currently selling for Rs.8785.07. The bond has
four years to maturity, a Rs.10, 000 face value and a 8% Coupon rate. The next annual interest
payment is due one year from today. The approximate discount factor for investments of
similar risk is 10%.
i)Calculate the intrinsic value of the bond. Based on this calculation, should Verma purchase
the bond.(8 marks)
ii)Calculate the YTM of the bond .Based on this calculation, should Verma purchase the
bond.(7 marks)
3
A mutual fund has earned an average annual return of 24 per cent over a five year period while
the average market return over the same period was only 18 per cent. The risk free rate
prevailing at the time was 7.5 per cent. The mutual fund had a beta of 1.45. The standard
deviation of return of the mutual fund and the market index were 40 percent and 30 per cent
respectively. Calculate Fama?s net selectivity for the fund, showing the decomposition of
performance.
4
Consider two situations: a young man X in early twenties and another young man Y in the
late thirties. X and Y earns same amount of money. Mr. Y has a family, a car and all the
encumbrances related with the marital status. Both of them like to invest in securities, what
would be their constraints and objectives.
UNIT ? II ? SECURITIES MARKETS
SYLLABUS: Financial Market - Segments ? Types - - Participants in financial Market ? Regulatory
Environment, Primary Market ? Methods of floating new issues, Book building ? Role of primary
market ? Regulation of primary market, Stock exchanges in India ? BSE, OTCEI , NSE, ISE, and
Regulations of stock exchanges ? Trading system in stock exchanges ?SEBI.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is Book building and IPO?
Level 1 Remembering
2
Explain reverse book building
Level 2 Understanding
3
Identify the different types of security markets.
Level 3 Applying
4
Analyse the meaning of underwriting.
Level 4 Analysing
5
What is your opinion about primary market?
Level 5 Evaluating
6
Interpret the role of Capital Market.
Level 6 Creating
7
Identify the importance of IPO grading. What decisions
are taken before going in for IPO?
Level 1 Remembering
8
Explain the meaning of oversubscription.
Level 2 Understanding
9
What facts would you select to show that OCTEI is
different from other stock?
Level 3 Applying
10
Analyse the parties involved in issue of shares in stock
market.
Level 4 Analysing
11
What is the rolling settlement in trading of securities?
Level 5 Evaluating
12
Interpret whether trading on margin a good idea.
Level 6 Creating
13
Who are the participants in financial market?
Level 1 Remembering
14
Distinguish between capital market and money market.
Level 2 Understanding
15
Identify objectives of OTCEI.
Level 3 Applying
16
Compare BSE and NSE.
Level 4 Analysing
17
What is insider trading?
Level 1 Remembering
18
Explain an odd lot.
Level 2 Understanding
19
Name any four market indices in Indian stock market.
Level 1 Remembering
20
List the functions of SEBI.
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
How would you explain the Role of SEBI in primary and secondary
market?
Level 1 Remembering
2
Explain the characteristics of Book Building and its process.
Level 2 Understanding
3
i) Describe functions of NSDL(6 marks)
Level 3 Applying
ii) Identify the various ways in which an initial public offer can be
made? (7 marks)
4
i) The strength of the economy depends upon the capital market-
Discuss ( 7 marks)
Level 4 Analysing
ii) Compare Primary and Secondary market.(6 marks)
5 Evaluate the different segments of financial market? Level 5 Evaluating
6.
?Stock exchange provides the linkage between the savings in the
household sector and the investments in the corporate sector?.
Explain.
Level 6 Creating
7
i) What are NSE, BSE and ISE? (5 marks)
Level 1 Remembering
ii) Discuss their features and advantages. (8 marks)
8
What can you say about the investors? protection measures taken by
the regulatory authorities in the primary market?
Level 2 Understanding
9
i) How do you show your understanding of IPO ?(5 marks )
Level 3 Applying
ii) Identify the steps taken by SEBI to protect the investors in the
secondary market.(8 marks)
10
i) Analyse how stock indices are formed.(5 marks)
Level 4 Analysing
ii) Compare the major indices and how it helps investors. (8 marks)
11
What are the functions of Stock Exchange?
Level 1 Remembering
12
i) Describe functions of primary market.(6 marks )
Level 2 Understanding
ii) Explain the changes in the trading system of stock exchanges
brought forth by SEBI in the recent years. (7 marks)
13
Analyse the factors to be taken into account when an
investor decides to invest in the primary market.
Level 4 Analysing
14
i) What are the Objectives of OTCEI? (5 marks)
Level 1 Remembering
ii) What are the features and benefits of OTCEI? (8 marks)
FirstRanker.com - FirstRanker's Choice
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
What are the investor?s objectives in investing his funds in the stock
market?
Level 1 Remembering
2
Explain the various choices of Investment alternatives
available for an Investor with moderate risk taking capabilities.
Level 2 Understanding
3
Identify the different investment alternatives in India.
Level 3 Applying
4
(i)Without adequate information the investor cannot carry out his
investment programme. Analyse.(8 marks)
Level 4 Analysing
(ii)Elucidate if there will be a trade- off between risk and return in
Investments? (5 marks)
5
(i)Discuss the various features of mutual funds. (5 marks)
Level 5 Evaluating
(ii)Discuss the various mutual fund schemes available for
investors. (8 marks)
6.
(i) There are so many types of bonds - Interpret. (7marks)
Level 6 Creating
(ii) Interpret the various types of preference shares. (6marks)
7
A bond of Rs.1000 face value bearing a Coupon rate of 12%
will mature after 7 years.
(i)What is the value of the bond if the discount rates is 14%?(7marks)
(ii)What is the value of the bond if the discount rates is12%?(6 marks)
Level 1 Remembering
8
Anand owns Rs.1000 face value bond with five years to maturity.
The bond has an annual coupon of Rs.75. The bond is currently
priced at Rs.970.
Given an appropriate discount rate of 10%, Explain whether Anand
should hold or sell the Bond?
Level 2 Understanding
9
i) Identify the price of Rs.1000 Zero Coupon bond with yield to
maturity of 18% and 10 years to maturity.(5 marks)
ii) What is YTM of this bond if its price is Rs.220? (8 marks)
Level 3 Applying
10
Prem is considering the purchase of a bond Currently selling at
Rs.878.50. The bond has four years of maturity, face value of
Rs.1000 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
Prem buy the bond? (5 marks)
ii) Calculate the yield to maturity of the bond. (8 marks)
Level 4 Analysing
11
The returns on securities A and B are given below :
Probability Security A Security B
0.5 4 0
Level 1 Remembering
0.4 2 3
0.1 0 3
i) What is the expected return for security A and B.? The security
has to be selected on the basis of return and risk.(4 marks )
ii) If the investor invests an equal proportion on both the scrips,
what would be the return? ( 4 marks )
iii)If the proportion is changed to 25 % and 75 % what would be the
return?( 5 marks)
12
How would you summarize the statement ?The investment process
involves a series of activities starting from the policy formulation??
Level 2 Understanding
13
Returns for a stock has the following probability distribution :
Possible Returns Probability of
Occurrence
-25 0.05
-10 0.10
0 0.10
15 0.15
20 0.25
30 0.20
35 0.15
(i)Calculate the variance (9 marks )
(ii)Also calculate the standard deviation( 4 marks )
Level 4 Analysing
14
i) Mention the Characteristics Of Investment in Real Estate. (5marks)
Level 1 Remembering
ii) What are the characteristics of investments in Mutual funds?
(8 marks)
PART - C
S.NO QUESTIONS
1
Assume that you know for certain that market is heading towards the boom period. Should you
buy a common stock based upon this information?
2
R.S Verma is considering investing in a bond currently selling for Rs.8785.07. The bond has
four years to maturity, a Rs.10, 000 face value and a 8% Coupon rate. The next annual interest
payment is due one year from today. The approximate discount factor for investments of
similar risk is 10%.
i)Calculate the intrinsic value of the bond. Based on this calculation, should Verma purchase
the bond.(8 marks)
ii)Calculate the YTM of the bond .Based on this calculation, should Verma purchase the
bond.(7 marks)
3
A mutual fund has earned an average annual return of 24 per cent over a five year period while
the average market return over the same period was only 18 per cent. The risk free rate
prevailing at the time was 7.5 per cent. The mutual fund had a beta of 1.45. The standard
deviation of return of the mutual fund and the market index were 40 percent and 30 per cent
respectively. Calculate Fama?s net selectivity for the fund, showing the decomposition of
performance.
4
Consider two situations: a young man X in early twenties and another young man Y in the
late thirties. X and Y earns same amount of money. Mr. Y has a family, a car and all the
encumbrances related with the marital status. Both of them like to invest in securities, what
would be their constraints and objectives.
UNIT ? II ? SECURITIES MARKETS
SYLLABUS: Financial Market - Segments ? Types - - Participants in financial Market ? Regulatory
Environment, Primary Market ? Methods of floating new issues, Book building ? Role of primary
market ? Regulation of primary market, Stock exchanges in India ? BSE, OTCEI , NSE, ISE, and
Regulations of stock exchanges ? Trading system in stock exchanges ?SEBI.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is Book building and IPO?
Level 1 Remembering
2
Explain reverse book building
Level 2 Understanding
3
Identify the different types of security markets.
Level 3 Applying
4
Analyse the meaning of underwriting.
Level 4 Analysing
5
What is your opinion about primary market?
Level 5 Evaluating
6
Interpret the role of Capital Market.
Level 6 Creating
7
Identify the importance of IPO grading. What decisions
are taken before going in for IPO?
Level 1 Remembering
8
Explain the meaning of oversubscription.
Level 2 Understanding
9
What facts would you select to show that OCTEI is
different from other stock?
Level 3 Applying
10
Analyse the parties involved in issue of shares in stock
market.
Level 4 Analysing
11
What is the rolling settlement in trading of securities?
Level 5 Evaluating
12
Interpret whether trading on margin a good idea.
Level 6 Creating
13
Who are the participants in financial market?
Level 1 Remembering
14
Distinguish between capital market and money market.
Level 2 Understanding
15
Identify objectives of OTCEI.
Level 3 Applying
16
Compare BSE and NSE.
Level 4 Analysing
17
What is insider trading?
Level 1 Remembering
18
Explain an odd lot.
Level 2 Understanding
19
Name any four market indices in Indian stock market.
Level 1 Remembering
20
List the functions of SEBI.
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
How would you explain the Role of SEBI in primary and secondary
market?
Level 1 Remembering
2
Explain the characteristics of Book Building and its process.
Level 2 Understanding
3
i) Describe functions of NSDL(6 marks)
Level 3 Applying
ii) Identify the various ways in which an initial public offer can be
made? (7 marks)
4
i) The strength of the economy depends upon the capital market-
Discuss ( 7 marks)
Level 4 Analysing
ii) Compare Primary and Secondary market.(6 marks)
5 Evaluate the different segments of financial market? Level 5 Evaluating
6.
?Stock exchange provides the linkage between the savings in the
household sector and the investments in the corporate sector?.
Explain.
Level 6 Creating
7
i) What are NSE, BSE and ISE? (5 marks)
Level 1 Remembering
ii) Discuss their features and advantages. (8 marks)
8
What can you say about the investors? protection measures taken by
the regulatory authorities in the primary market?
Level 2 Understanding
9
i) How do you show your understanding of IPO ?(5 marks )
Level 3 Applying
ii) Identify the steps taken by SEBI to protect the investors in the
secondary market.(8 marks)
10
i) Analyse how stock indices are formed.(5 marks)
Level 4 Analysing
ii) Compare the major indices and how it helps investors. (8 marks)
11
What are the functions of Stock Exchange?
Level 1 Remembering
12
i) Describe functions of primary market.(6 marks )
Level 2 Understanding
ii) Explain the changes in the trading system of stock exchanges
brought forth by SEBI in the recent years. (7 marks)
13
Analyse the factors to be taken into account when an
investor decides to invest in the primary market.
Level 4 Analysing
14
i) What are the Objectives of OTCEI? (5 marks)
Level 1 Remembering
ii) What are the features and benefits of OTCEI? (8 marks)
PART - C
S.NO QUESTIONS
1 Discuss the recent policy initiatives and developments in the capital market in India.
2 What are the Objectives, functions and powers of SEBI?
3 Comment on the role played by the key players involved in the new issue market.
4 What are the main objectives of NSE? Explain the trends in NSE.
UNIT ? III ? FUNDAMENTAL ANALYSIS
SYLLABUS: Economic Analysis ? Economic forecasting and stock Investment Decisions ?
Forecasting techniques. Industry Analysis : Industry classification, Industry life cycle ? Company
Analysis Measuring Earnings ? Forecasting Earnings ? Applied Valuation Techniques ? Graham and
Dodds investor ratios.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is industry life cycle analysis?
Level 1 Remembering
2
Explain the meaning of leading indicators of the economy?
Give 2 Examples
Level 2 Understanding
3
What do you understand by EIC framework to security
analysis?
Level 3 Applying
4
Analyse how Economic Forecasting is done.
Level 4 Analysing
5
Discuss the meaning economic analysis
Level 5 Evaluating
6
Interpret the industry life cycle stages.
Level 6 Creating
7
What is the importance of P/E ratio?
Level 1 Remembering
8
What is Value vs. Growth investing?
Level 2 Understanding
9
Identify the meaning of opportunistic building model.
Level 3 Applying
10
Analyse the ratios listed by Graham and Dodd for value
investing.
Level 4 Analysing
11
Discuss the significance of ROI in company analysis.
Level 5 Evaluating
12
Interpret the concept of company analysis
Level 6 Creating
13
What do you mean by lagging indicators of the
economy? Give 2 Examples
Level 1 Remembering
14
Explain Graham and Dodd?s investor ratios?
Level 2 Understanding
15
Identify the meaning of coincidental and lagging
indicators of the economy? Give 2 Examples.
Level 3 Applying
16
Classify industry according to cycle.
Level 4 Analysing
FirstRanker.com - FirstRanker's Choice
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
What are the investor?s objectives in investing his funds in the stock
market?
Level 1 Remembering
2
Explain the various choices of Investment alternatives
available for an Investor with moderate risk taking capabilities.
Level 2 Understanding
3
Identify the different investment alternatives in India.
Level 3 Applying
4
(i)Without adequate information the investor cannot carry out his
investment programme. Analyse.(8 marks)
Level 4 Analysing
(ii)Elucidate if there will be a trade- off between risk and return in
Investments? (5 marks)
5
(i)Discuss the various features of mutual funds. (5 marks)
Level 5 Evaluating
(ii)Discuss the various mutual fund schemes available for
investors. (8 marks)
6.
(i) There are so many types of bonds - Interpret. (7marks)
Level 6 Creating
(ii) Interpret the various types of preference shares. (6marks)
7
A bond of Rs.1000 face value bearing a Coupon rate of 12%
will mature after 7 years.
(i)What is the value of the bond if the discount rates is 14%?(7marks)
(ii)What is the value of the bond if the discount rates is12%?(6 marks)
Level 1 Remembering
8
Anand owns Rs.1000 face value bond with five years to maturity.
The bond has an annual coupon of Rs.75. The bond is currently
priced at Rs.970.
Given an appropriate discount rate of 10%, Explain whether Anand
should hold or sell the Bond?
Level 2 Understanding
9
i) Identify the price of Rs.1000 Zero Coupon bond with yield to
maturity of 18% and 10 years to maturity.(5 marks)
ii) What is YTM of this bond if its price is Rs.220? (8 marks)
Level 3 Applying
10
Prem is considering the purchase of a bond Currently selling at
Rs.878.50. The bond has four years of maturity, face value of
Rs.1000 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
Prem buy the bond? (5 marks)
ii) Calculate the yield to maturity of the bond. (8 marks)
Level 4 Analysing
11
The returns on securities A and B are given below :
Probability Security A Security B
0.5 4 0
Level 1 Remembering
0.4 2 3
0.1 0 3
i) What is the expected return for security A and B.? The security
has to be selected on the basis of return and risk.(4 marks )
ii) If the investor invests an equal proportion on both the scrips,
what would be the return? ( 4 marks )
iii)If the proportion is changed to 25 % and 75 % what would be the
return?( 5 marks)
12
How would you summarize the statement ?The investment process
involves a series of activities starting from the policy formulation??
Level 2 Understanding
13
Returns for a stock has the following probability distribution :
Possible Returns Probability of
Occurrence
-25 0.05
-10 0.10
0 0.10
15 0.15
20 0.25
30 0.20
35 0.15
(i)Calculate the variance (9 marks )
(ii)Also calculate the standard deviation( 4 marks )
Level 4 Analysing
14
i) Mention the Characteristics Of Investment in Real Estate. (5marks)
Level 1 Remembering
ii) What are the characteristics of investments in Mutual funds?
(8 marks)
PART - C
S.NO QUESTIONS
1
Assume that you know for certain that market is heading towards the boom period. Should you
buy a common stock based upon this information?
2
R.S Verma is considering investing in a bond currently selling for Rs.8785.07. The bond has
four years to maturity, a Rs.10, 000 face value and a 8% Coupon rate. The next annual interest
payment is due one year from today. The approximate discount factor for investments of
similar risk is 10%.
i)Calculate the intrinsic value of the bond. Based on this calculation, should Verma purchase
the bond.(8 marks)
ii)Calculate the YTM of the bond .Based on this calculation, should Verma purchase the
bond.(7 marks)
3
A mutual fund has earned an average annual return of 24 per cent over a five year period while
the average market return over the same period was only 18 per cent. The risk free rate
prevailing at the time was 7.5 per cent. The mutual fund had a beta of 1.45. The standard
deviation of return of the mutual fund and the market index were 40 percent and 30 per cent
respectively. Calculate Fama?s net selectivity for the fund, showing the decomposition of
performance.
4
Consider two situations: a young man X in early twenties and another young man Y in the
late thirties. X and Y earns same amount of money. Mr. Y has a family, a car and all the
encumbrances related with the marital status. Both of them like to invest in securities, what
would be their constraints and objectives.
UNIT ? II ? SECURITIES MARKETS
SYLLABUS: Financial Market - Segments ? Types - - Participants in financial Market ? Regulatory
Environment, Primary Market ? Methods of floating new issues, Book building ? Role of primary
market ? Regulation of primary market, Stock exchanges in India ? BSE, OTCEI , NSE, ISE, and
Regulations of stock exchanges ? Trading system in stock exchanges ?SEBI.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is Book building and IPO?
Level 1 Remembering
2
Explain reverse book building
Level 2 Understanding
3
Identify the different types of security markets.
Level 3 Applying
4
Analyse the meaning of underwriting.
Level 4 Analysing
5
What is your opinion about primary market?
Level 5 Evaluating
6
Interpret the role of Capital Market.
Level 6 Creating
7
Identify the importance of IPO grading. What decisions
are taken before going in for IPO?
Level 1 Remembering
8
Explain the meaning of oversubscription.
Level 2 Understanding
9
What facts would you select to show that OCTEI is
different from other stock?
Level 3 Applying
10
Analyse the parties involved in issue of shares in stock
market.
Level 4 Analysing
11
What is the rolling settlement in trading of securities?
Level 5 Evaluating
12
Interpret whether trading on margin a good idea.
Level 6 Creating
13
Who are the participants in financial market?
Level 1 Remembering
14
Distinguish between capital market and money market.
Level 2 Understanding
15
Identify objectives of OTCEI.
Level 3 Applying
16
Compare BSE and NSE.
Level 4 Analysing
17
What is insider trading?
Level 1 Remembering
18
Explain an odd lot.
Level 2 Understanding
19
Name any four market indices in Indian stock market.
Level 1 Remembering
20
List the functions of SEBI.
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
How would you explain the Role of SEBI in primary and secondary
market?
Level 1 Remembering
2
Explain the characteristics of Book Building and its process.
Level 2 Understanding
3
i) Describe functions of NSDL(6 marks)
Level 3 Applying
ii) Identify the various ways in which an initial public offer can be
made? (7 marks)
4
i) The strength of the economy depends upon the capital market-
Discuss ( 7 marks)
Level 4 Analysing
ii) Compare Primary and Secondary market.(6 marks)
5 Evaluate the different segments of financial market? Level 5 Evaluating
6.
?Stock exchange provides the linkage between the savings in the
household sector and the investments in the corporate sector?.
Explain.
Level 6 Creating
7
i) What are NSE, BSE and ISE? (5 marks)
Level 1 Remembering
ii) Discuss their features and advantages. (8 marks)
8
What can you say about the investors? protection measures taken by
the regulatory authorities in the primary market?
Level 2 Understanding
9
i) How do you show your understanding of IPO ?(5 marks )
Level 3 Applying
ii) Identify the steps taken by SEBI to protect the investors in the
secondary market.(8 marks)
10
i) Analyse how stock indices are formed.(5 marks)
Level 4 Analysing
ii) Compare the major indices and how it helps investors. (8 marks)
11
What are the functions of Stock Exchange?
Level 1 Remembering
12
i) Describe functions of primary market.(6 marks )
Level 2 Understanding
ii) Explain the changes in the trading system of stock exchanges
brought forth by SEBI in the recent years. (7 marks)
13
Analyse the factors to be taken into account when an
investor decides to invest in the primary market.
Level 4 Analysing
14
i) What are the Objectives of OTCEI? (5 marks)
Level 1 Remembering
ii) What are the features and benefits of OTCEI? (8 marks)
PART - C
S.NO QUESTIONS
1 Discuss the recent policy initiatives and developments in the capital market in India.
2 What are the Objectives, functions and powers of SEBI?
3 Comment on the role played by the key players involved in the new issue market.
4 What are the main objectives of NSE? Explain the trends in NSE.
UNIT ? III ? FUNDAMENTAL ANALYSIS
SYLLABUS: Economic Analysis ? Economic forecasting and stock Investment Decisions ?
Forecasting techniques. Industry Analysis : Industry classification, Industry life cycle ? Company
Analysis Measuring Earnings ? Forecasting Earnings ? Applied Valuation Techniques ? Graham and
Dodds investor ratios.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is industry life cycle analysis?
Level 1 Remembering
2
Explain the meaning of leading indicators of the economy?
Give 2 Examples
Level 2 Understanding
3
What do you understand by EIC framework to security
analysis?
Level 3 Applying
4
Analyse how Economic Forecasting is done.
Level 4 Analysing
5
Discuss the meaning economic analysis
Level 5 Evaluating
6
Interpret the industry life cycle stages.
Level 6 Creating
7
What is the importance of P/E ratio?
Level 1 Remembering
8
What is Value vs. Growth investing?
Level 2 Understanding
9
Identify the meaning of opportunistic building model.
Level 3 Applying
10
Analyse the ratios listed by Graham and Dodd for value
investing.
Level 4 Analysing
11
Discuss the significance of ROI in company analysis.
Level 5 Evaluating
12
Interpret the concept of company analysis
Level 6 Creating
13
What do you mean by lagging indicators of the
economy? Give 2 Examples
Level 1 Remembering
14
Explain Graham and Dodd?s investor ratios?
Level 2 Understanding
15
Identify the meaning of coincidental and lagging
indicators of the economy? Give 2 Examples.
Level 3 Applying
16
Classify industry according to cycle.
Level 4 Analysing
17
What is SWOT analysis?
Level 1 Remembering
18
Explain the use of ratio analysis?
Level 2 Understanding
19
What is meant by fundamental analysis?
Level 1 Remembering
20
What is intrinsic value of a share?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
i) Define ROI .(3 marks)
Level 1 Remembering
ii) What are the methods of computation of ROI in company
analysis.(10 marks)
2
Explain two commonly used ways of decomposing ROE into its
underlying determinant.
Level 2 Understanding
3
i) Identify the need for company analysis.(3 marks)
Level 3 Applying
ii) Discuss the key tools used in Company analysis.(10 marks)
4
Why do you think industry analysis is important? Why should it
include the economic analysis?
Level 4 Analysing
5
Discus the ratios calculated by the investor before making the
investments.
Level 5 Evaluating
6.
Can you elaborate Graham and Dodd's investor ratios with respect to
Fundamental analysis?
Level 6 Creating
7
What are the factors affecting Industry analysis?
Level 1 Remembering
8
?Fundamental analysis provides an analytical frame work for
rational investment decision - making?. Explain.
Level 2 Understanding
9
How would you show your understanding of EIC framework?
Level 3 Applying
10
Analyze the factors considered to be most important in appraising
companies in different industries. Level 4 Analysing
11
i) Do you think that knowing the current status of economy is useful
in analyzing stock market movements.( 4 marks)
Level 1 Remembering
ii) What are the factors affecting economic analysis?(9 marks)
12
Summarize on the concept of stock investment decision.
Level 2 Understanding
13
Compare the different stages in Industry life cycle.
Level 4 Analysing
14
How would you explain that various indicators predict the prospect
for investment in stocks?
Level 1 Remembering
FirstRanker.com - FirstRanker's Choice
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
What are the investor?s objectives in investing his funds in the stock
market?
Level 1 Remembering
2
Explain the various choices of Investment alternatives
available for an Investor with moderate risk taking capabilities.
Level 2 Understanding
3
Identify the different investment alternatives in India.
Level 3 Applying
4
(i)Without adequate information the investor cannot carry out his
investment programme. Analyse.(8 marks)
Level 4 Analysing
(ii)Elucidate if there will be a trade- off between risk and return in
Investments? (5 marks)
5
(i)Discuss the various features of mutual funds. (5 marks)
Level 5 Evaluating
(ii)Discuss the various mutual fund schemes available for
investors. (8 marks)
6.
(i) There are so many types of bonds - Interpret. (7marks)
Level 6 Creating
(ii) Interpret the various types of preference shares. (6marks)
7
A bond of Rs.1000 face value bearing a Coupon rate of 12%
will mature after 7 years.
(i)What is the value of the bond if the discount rates is 14%?(7marks)
(ii)What is the value of the bond if the discount rates is12%?(6 marks)
Level 1 Remembering
8
Anand owns Rs.1000 face value bond with five years to maturity.
The bond has an annual coupon of Rs.75. The bond is currently
priced at Rs.970.
Given an appropriate discount rate of 10%, Explain whether Anand
should hold or sell the Bond?
Level 2 Understanding
9
i) Identify the price of Rs.1000 Zero Coupon bond with yield to
maturity of 18% and 10 years to maturity.(5 marks)
ii) What is YTM of this bond if its price is Rs.220? (8 marks)
Level 3 Applying
10
Prem is considering the purchase of a bond Currently selling at
Rs.878.50. The bond has four years of maturity, face value of
Rs.1000 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
Prem buy the bond? (5 marks)
ii) Calculate the yield to maturity of the bond. (8 marks)
Level 4 Analysing
11
The returns on securities A and B are given below :
Probability Security A Security B
0.5 4 0
Level 1 Remembering
0.4 2 3
0.1 0 3
i) What is the expected return for security A and B.? The security
has to be selected on the basis of return and risk.(4 marks )
ii) If the investor invests an equal proportion on both the scrips,
what would be the return? ( 4 marks )
iii)If the proportion is changed to 25 % and 75 % what would be the
return?( 5 marks)
12
How would you summarize the statement ?The investment process
involves a series of activities starting from the policy formulation??
Level 2 Understanding
13
Returns for a stock has the following probability distribution :
Possible Returns Probability of
Occurrence
-25 0.05
-10 0.10
0 0.10
15 0.15
20 0.25
30 0.20
35 0.15
(i)Calculate the variance (9 marks )
(ii)Also calculate the standard deviation( 4 marks )
Level 4 Analysing
14
i) Mention the Characteristics Of Investment in Real Estate. (5marks)
Level 1 Remembering
ii) What are the characteristics of investments in Mutual funds?
(8 marks)
PART - C
S.NO QUESTIONS
1
Assume that you know for certain that market is heading towards the boom period. Should you
buy a common stock based upon this information?
2
R.S Verma is considering investing in a bond currently selling for Rs.8785.07. The bond has
four years to maturity, a Rs.10, 000 face value and a 8% Coupon rate. The next annual interest
payment is due one year from today. The approximate discount factor for investments of
similar risk is 10%.
i)Calculate the intrinsic value of the bond. Based on this calculation, should Verma purchase
the bond.(8 marks)
ii)Calculate the YTM of the bond .Based on this calculation, should Verma purchase the
bond.(7 marks)
3
A mutual fund has earned an average annual return of 24 per cent over a five year period while
the average market return over the same period was only 18 per cent. The risk free rate
prevailing at the time was 7.5 per cent. The mutual fund had a beta of 1.45. The standard
deviation of return of the mutual fund and the market index were 40 percent and 30 per cent
respectively. Calculate Fama?s net selectivity for the fund, showing the decomposition of
performance.
4
Consider two situations: a young man X in early twenties and another young man Y in the
late thirties. X and Y earns same amount of money. Mr. Y has a family, a car and all the
encumbrances related with the marital status. Both of them like to invest in securities, what
would be their constraints and objectives.
UNIT ? II ? SECURITIES MARKETS
SYLLABUS: Financial Market - Segments ? Types - - Participants in financial Market ? Regulatory
Environment, Primary Market ? Methods of floating new issues, Book building ? Role of primary
market ? Regulation of primary market, Stock exchanges in India ? BSE, OTCEI , NSE, ISE, and
Regulations of stock exchanges ? Trading system in stock exchanges ?SEBI.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is Book building and IPO?
Level 1 Remembering
2
Explain reverse book building
Level 2 Understanding
3
Identify the different types of security markets.
Level 3 Applying
4
Analyse the meaning of underwriting.
Level 4 Analysing
5
What is your opinion about primary market?
Level 5 Evaluating
6
Interpret the role of Capital Market.
Level 6 Creating
7
Identify the importance of IPO grading. What decisions
are taken before going in for IPO?
Level 1 Remembering
8
Explain the meaning of oversubscription.
Level 2 Understanding
9
What facts would you select to show that OCTEI is
different from other stock?
Level 3 Applying
10
Analyse the parties involved in issue of shares in stock
market.
Level 4 Analysing
11
What is the rolling settlement in trading of securities?
Level 5 Evaluating
12
Interpret whether trading on margin a good idea.
Level 6 Creating
13
Who are the participants in financial market?
Level 1 Remembering
14
Distinguish between capital market and money market.
Level 2 Understanding
15
Identify objectives of OTCEI.
Level 3 Applying
16
Compare BSE and NSE.
Level 4 Analysing
17
What is insider trading?
Level 1 Remembering
18
Explain an odd lot.
Level 2 Understanding
19
Name any four market indices in Indian stock market.
Level 1 Remembering
20
List the functions of SEBI.
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
How would you explain the Role of SEBI in primary and secondary
market?
Level 1 Remembering
2
Explain the characteristics of Book Building and its process.
Level 2 Understanding
3
i) Describe functions of NSDL(6 marks)
Level 3 Applying
ii) Identify the various ways in which an initial public offer can be
made? (7 marks)
4
i) The strength of the economy depends upon the capital market-
Discuss ( 7 marks)
Level 4 Analysing
ii) Compare Primary and Secondary market.(6 marks)
5 Evaluate the different segments of financial market? Level 5 Evaluating
6.
?Stock exchange provides the linkage between the savings in the
household sector and the investments in the corporate sector?.
Explain.
Level 6 Creating
7
i) What are NSE, BSE and ISE? (5 marks)
Level 1 Remembering
ii) Discuss their features and advantages. (8 marks)
8
What can you say about the investors? protection measures taken by
the regulatory authorities in the primary market?
Level 2 Understanding
9
i) How do you show your understanding of IPO ?(5 marks )
Level 3 Applying
ii) Identify the steps taken by SEBI to protect the investors in the
secondary market.(8 marks)
10
i) Analyse how stock indices are formed.(5 marks)
Level 4 Analysing
ii) Compare the major indices and how it helps investors. (8 marks)
11
What are the functions of Stock Exchange?
Level 1 Remembering
12
i) Describe functions of primary market.(6 marks )
Level 2 Understanding
ii) Explain the changes in the trading system of stock exchanges
brought forth by SEBI in the recent years. (7 marks)
13
Analyse the factors to be taken into account when an
investor decides to invest in the primary market.
Level 4 Analysing
14
i) What are the Objectives of OTCEI? (5 marks)
Level 1 Remembering
ii) What are the features and benefits of OTCEI? (8 marks)
PART - C
S.NO QUESTIONS
1 Discuss the recent policy initiatives and developments in the capital market in India.
2 What are the Objectives, functions and powers of SEBI?
3 Comment on the role played by the key players involved in the new issue market.
4 What are the main objectives of NSE? Explain the trends in NSE.
UNIT ? III ? FUNDAMENTAL ANALYSIS
SYLLABUS: Economic Analysis ? Economic forecasting and stock Investment Decisions ?
Forecasting techniques. Industry Analysis : Industry classification, Industry life cycle ? Company
Analysis Measuring Earnings ? Forecasting Earnings ? Applied Valuation Techniques ? Graham and
Dodds investor ratios.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is industry life cycle analysis?
Level 1 Remembering
2
Explain the meaning of leading indicators of the economy?
Give 2 Examples
Level 2 Understanding
3
What do you understand by EIC framework to security
analysis?
Level 3 Applying
4
Analyse how Economic Forecasting is done.
Level 4 Analysing
5
Discuss the meaning economic analysis
Level 5 Evaluating
6
Interpret the industry life cycle stages.
Level 6 Creating
7
What is the importance of P/E ratio?
Level 1 Remembering
8
What is Value vs. Growth investing?
Level 2 Understanding
9
Identify the meaning of opportunistic building model.
Level 3 Applying
10
Analyse the ratios listed by Graham and Dodd for value
investing.
Level 4 Analysing
11
Discuss the significance of ROI in company analysis.
Level 5 Evaluating
12
Interpret the concept of company analysis
Level 6 Creating
13
What do you mean by lagging indicators of the
economy? Give 2 Examples
Level 1 Remembering
14
Explain Graham and Dodd?s investor ratios?
Level 2 Understanding
15
Identify the meaning of coincidental and lagging
indicators of the economy? Give 2 Examples.
Level 3 Applying
16
Classify industry according to cycle.
Level 4 Analysing
17
What is SWOT analysis?
Level 1 Remembering
18
Explain the use of ratio analysis?
Level 2 Understanding
19
What is meant by fundamental analysis?
Level 1 Remembering
20
What is intrinsic value of a share?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
i) Define ROI .(3 marks)
Level 1 Remembering
ii) What are the methods of computation of ROI in company
analysis.(10 marks)
2
Explain two commonly used ways of decomposing ROE into its
underlying determinant.
Level 2 Understanding
3
i) Identify the need for company analysis.(3 marks)
Level 3 Applying
ii) Discuss the key tools used in Company analysis.(10 marks)
4
Why do you think industry analysis is important? Why should it
include the economic analysis?
Level 4 Analysing
5
Discus the ratios calculated by the investor before making the
investments.
Level 5 Evaluating
6.
Can you elaborate Graham and Dodd's investor ratios with respect to
Fundamental analysis?
Level 6 Creating
7
What are the factors affecting Industry analysis?
Level 1 Remembering
8
?Fundamental analysis provides an analytical frame work for
rational investment decision - making?. Explain.
Level 2 Understanding
9
How would you show your understanding of EIC framework?
Level 3 Applying
10
Analyze the factors considered to be most important in appraising
companies in different industries. Level 4 Analysing
11
i) Do you think that knowing the current status of economy is useful
in analyzing stock market movements.( 4 marks)
Level 1 Remembering
ii) What are the factors affecting economic analysis?(9 marks)
12
Summarize on the concept of stock investment decision.
Level 2 Understanding
13
Compare the different stages in Industry life cycle.
Level 4 Analysing
14
How would you explain that various indicators predict the prospect
for investment in stocks?
Level 1 Remembering
PART - C
S.NO QUESTIONS
1
i) As an analyst, discuss the concept of an industry lifecycle by describing each of its four
phases .In which phase of the lifecycle, investments in an industry are most attractive?
(12marks)
ii) Why is industry life cycle important to investors? (3marks)
2
Foreign investors look for certain key factors before investing in Indian Economy. -
Elaborate.
3 Enumerate the significance of economic forecasting in fundamental analysis.
4
?The level, trend and stability of earnings of a company depend upon a number of factors
concerning the operation of the company. Discuss.
UNIT ? IV ? TECHNICAL ANALYSIS
SYLLABUS: Fundamental Analysis Vs Technical Analysis ? Charting methods ? Market Indicators.
Trend ? Trend reversals ? Patterns - Moving Average ? Exponential moving Average ? Oscillators ?
Market Indicators ? Efficient Market theory.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Explain the three types of trends in stock prices
Level 1 Remembering
2
Explain the importance of Oscillators in technical analysis.
Level 2 Understanding
3
Differentiate fundamental analysis from technical analysis.
Level 3 Applying
4
Analyse the moving average theory of technical analysis.
Level 4 Analysing
5
What is the theme of Technical analysis?
Level 5 Evaluating
6
Draw and Interpret a Line Chart.
Level 6 Creating
7
Define RSI and its usage.
Level 1 Remembering
8
Explain MACD
Level 2 Understanding
9
Compare ROC I and ROC II.
Level 3 Applying
10
Analyse the two major market indicators considered
as a barometer of Indian capital market.
Level 4 Analysing
11
How do the leverage policies affect the company
performances?
Level 5 Evaluating
12
What do you mean by security market line? Define
?Efficient frontier?.
Level 6 Creating
13
What is Random Walk Hypothesis? What are the
various levels of market Efficiency?
Level 1 Remembering
14
Explain trend reversal.
Level 2 Understanding
FirstRanker.com - FirstRanker's Choice
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
What are the investor?s objectives in investing his funds in the stock
market?
Level 1 Remembering
2
Explain the various choices of Investment alternatives
available for an Investor with moderate risk taking capabilities.
Level 2 Understanding
3
Identify the different investment alternatives in India.
Level 3 Applying
4
(i)Without adequate information the investor cannot carry out his
investment programme. Analyse.(8 marks)
Level 4 Analysing
(ii)Elucidate if there will be a trade- off between risk and return in
Investments? (5 marks)
5
(i)Discuss the various features of mutual funds. (5 marks)
Level 5 Evaluating
(ii)Discuss the various mutual fund schemes available for
investors. (8 marks)
6.
(i) There are so many types of bonds - Interpret. (7marks)
Level 6 Creating
(ii) Interpret the various types of preference shares. (6marks)
7
A bond of Rs.1000 face value bearing a Coupon rate of 12%
will mature after 7 years.
(i)What is the value of the bond if the discount rates is 14%?(7marks)
(ii)What is the value of the bond if the discount rates is12%?(6 marks)
Level 1 Remembering
8
Anand owns Rs.1000 face value bond with five years to maturity.
The bond has an annual coupon of Rs.75. The bond is currently
priced at Rs.970.
Given an appropriate discount rate of 10%, Explain whether Anand
should hold or sell the Bond?
Level 2 Understanding
9
i) Identify the price of Rs.1000 Zero Coupon bond with yield to
maturity of 18% and 10 years to maturity.(5 marks)
ii) What is YTM of this bond if its price is Rs.220? (8 marks)
Level 3 Applying
10
Prem is considering the purchase of a bond Currently selling at
Rs.878.50. The bond has four years of maturity, face value of
Rs.1000 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
Prem buy the bond? (5 marks)
ii) Calculate the yield to maturity of the bond. (8 marks)
Level 4 Analysing
11
The returns on securities A and B are given below :
Probability Security A Security B
0.5 4 0
Level 1 Remembering
0.4 2 3
0.1 0 3
i) What is the expected return for security A and B.? The security
has to be selected on the basis of return and risk.(4 marks )
ii) If the investor invests an equal proportion on both the scrips,
what would be the return? ( 4 marks )
iii)If the proportion is changed to 25 % and 75 % what would be the
return?( 5 marks)
12
How would you summarize the statement ?The investment process
involves a series of activities starting from the policy formulation??
Level 2 Understanding
13
Returns for a stock has the following probability distribution :
Possible Returns Probability of
Occurrence
-25 0.05
-10 0.10
0 0.10
15 0.15
20 0.25
30 0.20
35 0.15
(i)Calculate the variance (9 marks )
(ii)Also calculate the standard deviation( 4 marks )
Level 4 Analysing
14
i) Mention the Characteristics Of Investment in Real Estate. (5marks)
Level 1 Remembering
ii) What are the characteristics of investments in Mutual funds?
(8 marks)
PART - C
S.NO QUESTIONS
1
Assume that you know for certain that market is heading towards the boom period. Should you
buy a common stock based upon this information?
2
R.S Verma is considering investing in a bond currently selling for Rs.8785.07. The bond has
four years to maturity, a Rs.10, 000 face value and a 8% Coupon rate. The next annual interest
payment is due one year from today. The approximate discount factor for investments of
similar risk is 10%.
i)Calculate the intrinsic value of the bond. Based on this calculation, should Verma purchase
the bond.(8 marks)
ii)Calculate the YTM of the bond .Based on this calculation, should Verma purchase the
bond.(7 marks)
3
A mutual fund has earned an average annual return of 24 per cent over a five year period while
the average market return over the same period was only 18 per cent. The risk free rate
prevailing at the time was 7.5 per cent. The mutual fund had a beta of 1.45. The standard
deviation of return of the mutual fund and the market index were 40 percent and 30 per cent
respectively. Calculate Fama?s net selectivity for the fund, showing the decomposition of
performance.
4
Consider two situations: a young man X in early twenties and another young man Y in the
late thirties. X and Y earns same amount of money. Mr. Y has a family, a car and all the
encumbrances related with the marital status. Both of them like to invest in securities, what
would be their constraints and objectives.
UNIT ? II ? SECURITIES MARKETS
SYLLABUS: Financial Market - Segments ? Types - - Participants in financial Market ? Regulatory
Environment, Primary Market ? Methods of floating new issues, Book building ? Role of primary
market ? Regulation of primary market, Stock exchanges in India ? BSE, OTCEI , NSE, ISE, and
Regulations of stock exchanges ? Trading system in stock exchanges ?SEBI.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is Book building and IPO?
Level 1 Remembering
2
Explain reverse book building
Level 2 Understanding
3
Identify the different types of security markets.
Level 3 Applying
4
Analyse the meaning of underwriting.
Level 4 Analysing
5
What is your opinion about primary market?
Level 5 Evaluating
6
Interpret the role of Capital Market.
Level 6 Creating
7
Identify the importance of IPO grading. What decisions
are taken before going in for IPO?
Level 1 Remembering
8
Explain the meaning of oversubscription.
Level 2 Understanding
9
What facts would you select to show that OCTEI is
different from other stock?
Level 3 Applying
10
Analyse the parties involved in issue of shares in stock
market.
Level 4 Analysing
11
What is the rolling settlement in trading of securities?
Level 5 Evaluating
12
Interpret whether trading on margin a good idea.
Level 6 Creating
13
Who are the participants in financial market?
Level 1 Remembering
14
Distinguish between capital market and money market.
Level 2 Understanding
15
Identify objectives of OTCEI.
Level 3 Applying
16
Compare BSE and NSE.
Level 4 Analysing
17
What is insider trading?
Level 1 Remembering
18
Explain an odd lot.
Level 2 Understanding
19
Name any four market indices in Indian stock market.
Level 1 Remembering
20
List the functions of SEBI.
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
How would you explain the Role of SEBI in primary and secondary
market?
Level 1 Remembering
2
Explain the characteristics of Book Building and its process.
Level 2 Understanding
3
i) Describe functions of NSDL(6 marks)
Level 3 Applying
ii) Identify the various ways in which an initial public offer can be
made? (7 marks)
4
i) The strength of the economy depends upon the capital market-
Discuss ( 7 marks)
Level 4 Analysing
ii) Compare Primary and Secondary market.(6 marks)
5 Evaluate the different segments of financial market? Level 5 Evaluating
6.
?Stock exchange provides the linkage between the savings in the
household sector and the investments in the corporate sector?.
Explain.
Level 6 Creating
7
i) What are NSE, BSE and ISE? (5 marks)
Level 1 Remembering
ii) Discuss their features and advantages. (8 marks)
8
What can you say about the investors? protection measures taken by
the regulatory authorities in the primary market?
Level 2 Understanding
9
i) How do you show your understanding of IPO ?(5 marks )
Level 3 Applying
ii) Identify the steps taken by SEBI to protect the investors in the
secondary market.(8 marks)
10
i) Analyse how stock indices are formed.(5 marks)
Level 4 Analysing
ii) Compare the major indices and how it helps investors. (8 marks)
11
What are the functions of Stock Exchange?
Level 1 Remembering
12
i) Describe functions of primary market.(6 marks )
Level 2 Understanding
ii) Explain the changes in the trading system of stock exchanges
brought forth by SEBI in the recent years. (7 marks)
13
Analyse the factors to be taken into account when an
investor decides to invest in the primary market.
Level 4 Analysing
14
i) What are the Objectives of OTCEI? (5 marks)
Level 1 Remembering
ii) What are the features and benefits of OTCEI? (8 marks)
PART - C
S.NO QUESTIONS
1 Discuss the recent policy initiatives and developments in the capital market in India.
2 What are the Objectives, functions and powers of SEBI?
3 Comment on the role played by the key players involved in the new issue market.
4 What are the main objectives of NSE? Explain the trends in NSE.
UNIT ? III ? FUNDAMENTAL ANALYSIS
SYLLABUS: Economic Analysis ? Economic forecasting and stock Investment Decisions ?
Forecasting techniques. Industry Analysis : Industry classification, Industry life cycle ? Company
Analysis Measuring Earnings ? Forecasting Earnings ? Applied Valuation Techniques ? Graham and
Dodds investor ratios.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is industry life cycle analysis?
Level 1 Remembering
2
Explain the meaning of leading indicators of the economy?
Give 2 Examples
Level 2 Understanding
3
What do you understand by EIC framework to security
analysis?
Level 3 Applying
4
Analyse how Economic Forecasting is done.
Level 4 Analysing
5
Discuss the meaning economic analysis
Level 5 Evaluating
6
Interpret the industry life cycle stages.
Level 6 Creating
7
What is the importance of P/E ratio?
Level 1 Remembering
8
What is Value vs. Growth investing?
Level 2 Understanding
9
Identify the meaning of opportunistic building model.
Level 3 Applying
10
Analyse the ratios listed by Graham and Dodd for value
investing.
Level 4 Analysing
11
Discuss the significance of ROI in company analysis.
Level 5 Evaluating
12
Interpret the concept of company analysis
Level 6 Creating
13
What do you mean by lagging indicators of the
economy? Give 2 Examples
Level 1 Remembering
14
Explain Graham and Dodd?s investor ratios?
Level 2 Understanding
15
Identify the meaning of coincidental and lagging
indicators of the economy? Give 2 Examples.
Level 3 Applying
16
Classify industry according to cycle.
Level 4 Analysing
17
What is SWOT analysis?
Level 1 Remembering
18
Explain the use of ratio analysis?
Level 2 Understanding
19
What is meant by fundamental analysis?
Level 1 Remembering
20
What is intrinsic value of a share?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
i) Define ROI .(3 marks)
Level 1 Remembering
ii) What are the methods of computation of ROI in company
analysis.(10 marks)
2
Explain two commonly used ways of decomposing ROE into its
underlying determinant.
Level 2 Understanding
3
i) Identify the need for company analysis.(3 marks)
Level 3 Applying
ii) Discuss the key tools used in Company analysis.(10 marks)
4
Why do you think industry analysis is important? Why should it
include the economic analysis?
Level 4 Analysing
5
Discus the ratios calculated by the investor before making the
investments.
Level 5 Evaluating
6.
Can you elaborate Graham and Dodd's investor ratios with respect to
Fundamental analysis?
Level 6 Creating
7
What are the factors affecting Industry analysis?
Level 1 Remembering
8
?Fundamental analysis provides an analytical frame work for
rational investment decision - making?. Explain.
Level 2 Understanding
9
How would you show your understanding of EIC framework?
Level 3 Applying
10
Analyze the factors considered to be most important in appraising
companies in different industries. Level 4 Analysing
11
i) Do you think that knowing the current status of economy is useful
in analyzing stock market movements.( 4 marks)
Level 1 Remembering
ii) What are the factors affecting economic analysis?(9 marks)
12
Summarize on the concept of stock investment decision.
Level 2 Understanding
13
Compare the different stages in Industry life cycle.
Level 4 Analysing
14
How would you explain that various indicators predict the prospect
for investment in stocks?
Level 1 Remembering
PART - C
S.NO QUESTIONS
1
i) As an analyst, discuss the concept of an industry lifecycle by describing each of its four
phases .In which phase of the lifecycle, investments in an industry are most attractive?
(12marks)
ii) Why is industry life cycle important to investors? (3marks)
2
Foreign investors look for certain key factors before investing in Indian Economy. -
Elaborate.
3 Enumerate the significance of economic forecasting in fundamental analysis.
4
?The level, trend and stability of earnings of a company depend upon a number of factors
concerning the operation of the company. Discuss.
UNIT ? IV ? TECHNICAL ANALYSIS
SYLLABUS: Fundamental Analysis Vs Technical Analysis ? Charting methods ? Market Indicators.
Trend ? Trend reversals ? Patterns - Moving Average ? Exponential moving Average ? Oscillators ?
Market Indicators ? Efficient Market theory.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Explain the three types of trends in stock prices
Level 1 Remembering
2
Explain the importance of Oscillators in technical analysis.
Level 2 Understanding
3
Differentiate fundamental analysis from technical analysis.
Level 3 Applying
4
Analyse the moving average theory of technical analysis.
Level 4 Analysing
5
What is the theme of Technical analysis?
Level 5 Evaluating
6
Draw and Interpret a Line Chart.
Level 6 Creating
7
Define RSI and its usage.
Level 1 Remembering
8
Explain MACD
Level 2 Understanding
9
Compare ROC I and ROC II.
Level 3 Applying
10
Analyse the two major market indicators considered
as a barometer of Indian capital market.
Level 4 Analysing
11
How do the leverage policies affect the company
performances?
Level 5 Evaluating
12
What do you mean by security market line? Define
?Efficient frontier?.
Level 6 Creating
13
What is Random Walk Hypothesis? What are the
various levels of market Efficiency?
Level 1 Remembering
14
Explain trend reversal.
Level 2 Understanding
15
How will you identify support level of a stock?
Level 3 Applying
16
Analyse any two oscillators.
Level 4 Analysing
17
What are Oscillators?
Level 1 Remembering
18
What is resistance level of a stock?
Level 2 Understanding
19
What are price charts and short sale?
Level 1 Remembering
20
What is Beta? Is it a better measure of risk than the
standard deviation?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
i) What are the premises of technical analysis? (5marks)
Level 1 Remembering
ii) What are the differences between Technical and fundamental
analysis? (8marks)
2
Illustrate ?Chart patterns are helpful in predicting the stock price
movement?.
Level 2 Understanding
3
i) How would you use ROC to predict the stock price movement?
(4marks)
Level 3 Applying
ii) Compute and differentiate ROC I and ROC II( 9 marks)
4
Analyse the weak form of the efficient market hypothesis. Describe
the empirical tests used for testing the weak form efficiency.
Level 4 Analysing
5
Moving average not only smoothens the data, but also predict the
market ? Discuss with an example.
Level 5 Evaluating
6.
Interpret how volume and breadth of the market indicate the trend of
the market.
Level 6 Creating
7
i) What are the advantages of oscillators? (5marks)
Level 1 Remembering
ii) Discuss the types of oscillators. (8marks)
8
Explain the various forms of market efficiency and the empirical
tests.
Level 2 Understanding
9
How would you show your understanding on the Dow theory and
explain how is it used to determine the direction of the stock market.
Level 3 Applying
10
Describe the chart patterns which help in identifying trend reversal.
Level 4 Analysing
11
i)What is the concept of random walk theory? (8marks)
Level 1 Remembering
ii)Discuss its implications and limitations.(5marks)
12
Explain the following
i) Bar chart (2marks)
ii) Line Chart(3marks)
iii) Point and figure chart(4marks)
Level 2 Understanding
FirstRanker.com - FirstRanker's Choice
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
What are the investor?s objectives in investing his funds in the stock
market?
Level 1 Remembering
2
Explain the various choices of Investment alternatives
available for an Investor with moderate risk taking capabilities.
Level 2 Understanding
3
Identify the different investment alternatives in India.
Level 3 Applying
4
(i)Without adequate information the investor cannot carry out his
investment programme. Analyse.(8 marks)
Level 4 Analysing
(ii)Elucidate if there will be a trade- off between risk and return in
Investments? (5 marks)
5
(i)Discuss the various features of mutual funds. (5 marks)
Level 5 Evaluating
(ii)Discuss the various mutual fund schemes available for
investors. (8 marks)
6.
(i) There are so many types of bonds - Interpret. (7marks)
Level 6 Creating
(ii) Interpret the various types of preference shares. (6marks)
7
A bond of Rs.1000 face value bearing a Coupon rate of 12%
will mature after 7 years.
(i)What is the value of the bond if the discount rates is 14%?(7marks)
(ii)What is the value of the bond if the discount rates is12%?(6 marks)
Level 1 Remembering
8
Anand owns Rs.1000 face value bond with five years to maturity.
The bond has an annual coupon of Rs.75. The bond is currently
priced at Rs.970.
Given an appropriate discount rate of 10%, Explain whether Anand
should hold or sell the Bond?
Level 2 Understanding
9
i) Identify the price of Rs.1000 Zero Coupon bond with yield to
maturity of 18% and 10 years to maturity.(5 marks)
ii) What is YTM of this bond if its price is Rs.220? (8 marks)
Level 3 Applying
10
Prem is considering the purchase of a bond Currently selling at
Rs.878.50. The bond has four years of maturity, face value of
Rs.1000 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
Prem buy the bond? (5 marks)
ii) Calculate the yield to maturity of the bond. (8 marks)
Level 4 Analysing
11
The returns on securities A and B are given below :
Probability Security A Security B
0.5 4 0
Level 1 Remembering
0.4 2 3
0.1 0 3
i) What is the expected return for security A and B.? The security
has to be selected on the basis of return and risk.(4 marks )
ii) If the investor invests an equal proportion on both the scrips,
what would be the return? ( 4 marks )
iii)If the proportion is changed to 25 % and 75 % what would be the
return?( 5 marks)
12
How would you summarize the statement ?The investment process
involves a series of activities starting from the policy formulation??
Level 2 Understanding
13
Returns for a stock has the following probability distribution :
Possible Returns Probability of
Occurrence
-25 0.05
-10 0.10
0 0.10
15 0.15
20 0.25
30 0.20
35 0.15
(i)Calculate the variance (9 marks )
(ii)Also calculate the standard deviation( 4 marks )
Level 4 Analysing
14
i) Mention the Characteristics Of Investment in Real Estate. (5marks)
Level 1 Remembering
ii) What are the characteristics of investments in Mutual funds?
(8 marks)
PART - C
S.NO QUESTIONS
1
Assume that you know for certain that market is heading towards the boom period. Should you
buy a common stock based upon this information?
2
R.S Verma is considering investing in a bond currently selling for Rs.8785.07. The bond has
four years to maturity, a Rs.10, 000 face value and a 8% Coupon rate. The next annual interest
payment is due one year from today. The approximate discount factor for investments of
similar risk is 10%.
i)Calculate the intrinsic value of the bond. Based on this calculation, should Verma purchase
the bond.(8 marks)
ii)Calculate the YTM of the bond .Based on this calculation, should Verma purchase the
bond.(7 marks)
3
A mutual fund has earned an average annual return of 24 per cent over a five year period while
the average market return over the same period was only 18 per cent. The risk free rate
prevailing at the time was 7.5 per cent. The mutual fund had a beta of 1.45. The standard
deviation of return of the mutual fund and the market index were 40 percent and 30 per cent
respectively. Calculate Fama?s net selectivity for the fund, showing the decomposition of
performance.
4
Consider two situations: a young man X in early twenties and another young man Y in the
late thirties. X and Y earns same amount of money. Mr. Y has a family, a car and all the
encumbrances related with the marital status. Both of them like to invest in securities, what
would be their constraints and objectives.
UNIT ? II ? SECURITIES MARKETS
SYLLABUS: Financial Market - Segments ? Types - - Participants in financial Market ? Regulatory
Environment, Primary Market ? Methods of floating new issues, Book building ? Role of primary
market ? Regulation of primary market, Stock exchanges in India ? BSE, OTCEI , NSE, ISE, and
Regulations of stock exchanges ? Trading system in stock exchanges ?SEBI.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is Book building and IPO?
Level 1 Remembering
2
Explain reverse book building
Level 2 Understanding
3
Identify the different types of security markets.
Level 3 Applying
4
Analyse the meaning of underwriting.
Level 4 Analysing
5
What is your opinion about primary market?
Level 5 Evaluating
6
Interpret the role of Capital Market.
Level 6 Creating
7
Identify the importance of IPO grading. What decisions
are taken before going in for IPO?
Level 1 Remembering
8
Explain the meaning of oversubscription.
Level 2 Understanding
9
What facts would you select to show that OCTEI is
different from other stock?
Level 3 Applying
10
Analyse the parties involved in issue of shares in stock
market.
Level 4 Analysing
11
What is the rolling settlement in trading of securities?
Level 5 Evaluating
12
Interpret whether trading on margin a good idea.
Level 6 Creating
13
Who are the participants in financial market?
Level 1 Remembering
14
Distinguish between capital market and money market.
Level 2 Understanding
15
Identify objectives of OTCEI.
Level 3 Applying
16
Compare BSE and NSE.
Level 4 Analysing
17
What is insider trading?
Level 1 Remembering
18
Explain an odd lot.
Level 2 Understanding
19
Name any four market indices in Indian stock market.
Level 1 Remembering
20
List the functions of SEBI.
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
How would you explain the Role of SEBI in primary and secondary
market?
Level 1 Remembering
2
Explain the characteristics of Book Building and its process.
Level 2 Understanding
3
i) Describe functions of NSDL(6 marks)
Level 3 Applying
ii) Identify the various ways in which an initial public offer can be
made? (7 marks)
4
i) The strength of the economy depends upon the capital market-
Discuss ( 7 marks)
Level 4 Analysing
ii) Compare Primary and Secondary market.(6 marks)
5 Evaluate the different segments of financial market? Level 5 Evaluating
6.
?Stock exchange provides the linkage between the savings in the
household sector and the investments in the corporate sector?.
Explain.
Level 6 Creating
7
i) What are NSE, BSE and ISE? (5 marks)
Level 1 Remembering
ii) Discuss their features and advantages. (8 marks)
8
What can you say about the investors? protection measures taken by
the regulatory authorities in the primary market?
Level 2 Understanding
9
i) How do you show your understanding of IPO ?(5 marks )
Level 3 Applying
ii) Identify the steps taken by SEBI to protect the investors in the
secondary market.(8 marks)
10
i) Analyse how stock indices are formed.(5 marks)
Level 4 Analysing
ii) Compare the major indices and how it helps investors. (8 marks)
11
What are the functions of Stock Exchange?
Level 1 Remembering
12
i) Describe functions of primary market.(6 marks )
Level 2 Understanding
ii) Explain the changes in the trading system of stock exchanges
brought forth by SEBI in the recent years. (7 marks)
13
Analyse the factors to be taken into account when an
investor decides to invest in the primary market.
Level 4 Analysing
14
i) What are the Objectives of OTCEI? (5 marks)
Level 1 Remembering
ii) What are the features and benefits of OTCEI? (8 marks)
PART - C
S.NO QUESTIONS
1 Discuss the recent policy initiatives and developments in the capital market in India.
2 What are the Objectives, functions and powers of SEBI?
3 Comment on the role played by the key players involved in the new issue market.
4 What are the main objectives of NSE? Explain the trends in NSE.
UNIT ? III ? FUNDAMENTAL ANALYSIS
SYLLABUS: Economic Analysis ? Economic forecasting and stock Investment Decisions ?
Forecasting techniques. Industry Analysis : Industry classification, Industry life cycle ? Company
Analysis Measuring Earnings ? Forecasting Earnings ? Applied Valuation Techniques ? Graham and
Dodds investor ratios.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is industry life cycle analysis?
Level 1 Remembering
2
Explain the meaning of leading indicators of the economy?
Give 2 Examples
Level 2 Understanding
3
What do you understand by EIC framework to security
analysis?
Level 3 Applying
4
Analyse how Economic Forecasting is done.
Level 4 Analysing
5
Discuss the meaning economic analysis
Level 5 Evaluating
6
Interpret the industry life cycle stages.
Level 6 Creating
7
What is the importance of P/E ratio?
Level 1 Remembering
8
What is Value vs. Growth investing?
Level 2 Understanding
9
Identify the meaning of opportunistic building model.
Level 3 Applying
10
Analyse the ratios listed by Graham and Dodd for value
investing.
Level 4 Analysing
11
Discuss the significance of ROI in company analysis.
Level 5 Evaluating
12
Interpret the concept of company analysis
Level 6 Creating
13
What do you mean by lagging indicators of the
economy? Give 2 Examples
Level 1 Remembering
14
Explain Graham and Dodd?s investor ratios?
Level 2 Understanding
15
Identify the meaning of coincidental and lagging
indicators of the economy? Give 2 Examples.
Level 3 Applying
16
Classify industry according to cycle.
Level 4 Analysing
17
What is SWOT analysis?
Level 1 Remembering
18
Explain the use of ratio analysis?
Level 2 Understanding
19
What is meant by fundamental analysis?
Level 1 Remembering
20
What is intrinsic value of a share?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
i) Define ROI .(3 marks)
Level 1 Remembering
ii) What are the methods of computation of ROI in company
analysis.(10 marks)
2
Explain two commonly used ways of decomposing ROE into its
underlying determinant.
Level 2 Understanding
3
i) Identify the need for company analysis.(3 marks)
Level 3 Applying
ii) Discuss the key tools used in Company analysis.(10 marks)
4
Why do you think industry analysis is important? Why should it
include the economic analysis?
Level 4 Analysing
5
Discus the ratios calculated by the investor before making the
investments.
Level 5 Evaluating
6.
Can you elaborate Graham and Dodd's investor ratios with respect to
Fundamental analysis?
Level 6 Creating
7
What are the factors affecting Industry analysis?
Level 1 Remembering
8
?Fundamental analysis provides an analytical frame work for
rational investment decision - making?. Explain.
Level 2 Understanding
9
How would you show your understanding of EIC framework?
Level 3 Applying
10
Analyze the factors considered to be most important in appraising
companies in different industries. Level 4 Analysing
11
i) Do you think that knowing the current status of economy is useful
in analyzing stock market movements.( 4 marks)
Level 1 Remembering
ii) What are the factors affecting economic analysis?(9 marks)
12
Summarize on the concept of stock investment decision.
Level 2 Understanding
13
Compare the different stages in Industry life cycle.
Level 4 Analysing
14
How would you explain that various indicators predict the prospect
for investment in stocks?
Level 1 Remembering
PART - C
S.NO QUESTIONS
1
i) As an analyst, discuss the concept of an industry lifecycle by describing each of its four
phases .In which phase of the lifecycle, investments in an industry are most attractive?
(12marks)
ii) Why is industry life cycle important to investors? (3marks)
2
Foreign investors look for certain key factors before investing in Indian Economy. -
Elaborate.
3 Enumerate the significance of economic forecasting in fundamental analysis.
4
?The level, trend and stability of earnings of a company depend upon a number of factors
concerning the operation of the company. Discuss.
UNIT ? IV ? TECHNICAL ANALYSIS
SYLLABUS: Fundamental Analysis Vs Technical Analysis ? Charting methods ? Market Indicators.
Trend ? Trend reversals ? Patterns - Moving Average ? Exponential moving Average ? Oscillators ?
Market Indicators ? Efficient Market theory.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Explain the three types of trends in stock prices
Level 1 Remembering
2
Explain the importance of Oscillators in technical analysis.
Level 2 Understanding
3
Differentiate fundamental analysis from technical analysis.
Level 3 Applying
4
Analyse the moving average theory of technical analysis.
Level 4 Analysing
5
What is the theme of Technical analysis?
Level 5 Evaluating
6
Draw and Interpret a Line Chart.
Level 6 Creating
7
Define RSI and its usage.
Level 1 Remembering
8
Explain MACD
Level 2 Understanding
9
Compare ROC I and ROC II.
Level 3 Applying
10
Analyse the two major market indicators considered
as a barometer of Indian capital market.
Level 4 Analysing
11
How do the leverage policies affect the company
performances?
Level 5 Evaluating
12
What do you mean by security market line? Define
?Efficient frontier?.
Level 6 Creating
13
What is Random Walk Hypothesis? What are the
various levels of market Efficiency?
Level 1 Remembering
14
Explain trend reversal.
Level 2 Understanding
15
How will you identify support level of a stock?
Level 3 Applying
16
Analyse any two oscillators.
Level 4 Analysing
17
What are Oscillators?
Level 1 Remembering
18
What is resistance level of a stock?
Level 2 Understanding
19
What are price charts and short sale?
Level 1 Remembering
20
What is Beta? Is it a better measure of risk than the
standard deviation?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
i) What are the premises of technical analysis? (5marks)
Level 1 Remembering
ii) What are the differences between Technical and fundamental
analysis? (8marks)
2
Illustrate ?Chart patterns are helpful in predicting the stock price
movement?.
Level 2 Understanding
3
i) How would you use ROC to predict the stock price movement?
(4marks)
Level 3 Applying
ii) Compute and differentiate ROC I and ROC II( 9 marks)
4
Analyse the weak form of the efficient market hypothesis. Describe
the empirical tests used for testing the weak form efficiency.
Level 4 Analysing
5
Moving average not only smoothens the data, but also predict the
market ? Discuss with an example.
Level 5 Evaluating
6.
Interpret how volume and breadth of the market indicate the trend of
the market.
Level 6 Creating
7
i) What are the advantages of oscillators? (5marks)
Level 1 Remembering
ii) Discuss the types of oscillators. (8marks)
8
Explain the various forms of market efficiency and the empirical
tests.
Level 2 Understanding
9
How would you show your understanding on the Dow theory and
explain how is it used to determine the direction of the stock market.
Level 3 Applying
10
Describe the chart patterns which help in identifying trend reversal.
Level 4 Analysing
11
i)What is the concept of random walk theory? (8marks)
Level 1 Remembering
ii)Discuss its implications and limitations.(5marks)
12
Explain the following
i) Bar chart (2marks)
ii) Line Chart(3marks)
iii) Point and figure chart(4marks)
Level 2 Understanding
iv) Japanese candlestick chart(4marks)
13
i)Analyse the principles of Technical Analysis.(5marks)
Level 4 Analysing
ii)Classify oscillators used by technical analysts (8 marks)
14
i) What is RSI?(5marks)
Level 1 Remembering
ii) How is it calculated? (8marks)
PART - C
S.NO QUESTIONS
1 Discuss the empirical evidences of the strong form and weak form of market efficiency.
2
How does technical analysis differ from fundamental analysis? Explain the ways in which the
technicians think before they act?
3 What are the statistical tools used to measure the risk of the securities return? Explain.
4 Interpret the various volume indicators in stock market.
UNIT ? V ? PORTFOLIO MANAGEMENT
SYLLABUS: Portfolio analysis ?Portfolio Selection ?Capital Asset Pricing model ? Portfolio
Revision Portfolio Evaluation ? Mutual Funds.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is CAPM?
Level 1 Remembering
2
Explain the criteria for evaluation of portfolio.
Level 2 Understanding
3
What is an index fund?
Level 3 Applying
4
Distinguish between SML AND CML.
Level 4 Analysing
5
Discuss how is Beta computed using CAPM?
Level 5 Evaluating
6
Interpret the term AMC.
Level 6 Creating
7
What do you mean by diversification?
Level 1 Remembering
8
How would you summarize portfolio selection?
Level 2 Understanding
FirstRanker.com - FirstRanker's Choice
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
What are the investor?s objectives in investing his funds in the stock
market?
Level 1 Remembering
2
Explain the various choices of Investment alternatives
available for an Investor with moderate risk taking capabilities.
Level 2 Understanding
3
Identify the different investment alternatives in India.
Level 3 Applying
4
(i)Without adequate information the investor cannot carry out his
investment programme. Analyse.(8 marks)
Level 4 Analysing
(ii)Elucidate if there will be a trade- off between risk and return in
Investments? (5 marks)
5
(i)Discuss the various features of mutual funds. (5 marks)
Level 5 Evaluating
(ii)Discuss the various mutual fund schemes available for
investors. (8 marks)
6.
(i) There are so many types of bonds - Interpret. (7marks)
Level 6 Creating
(ii) Interpret the various types of preference shares. (6marks)
7
A bond of Rs.1000 face value bearing a Coupon rate of 12%
will mature after 7 years.
(i)What is the value of the bond if the discount rates is 14%?(7marks)
(ii)What is the value of the bond if the discount rates is12%?(6 marks)
Level 1 Remembering
8
Anand owns Rs.1000 face value bond with five years to maturity.
The bond has an annual coupon of Rs.75. The bond is currently
priced at Rs.970.
Given an appropriate discount rate of 10%, Explain whether Anand
should hold or sell the Bond?
Level 2 Understanding
9
i) Identify the price of Rs.1000 Zero Coupon bond with yield to
maturity of 18% and 10 years to maturity.(5 marks)
ii) What is YTM of this bond if its price is Rs.220? (8 marks)
Level 3 Applying
10
Prem is considering the purchase of a bond Currently selling at
Rs.878.50. The bond has four years of maturity, face value of
Rs.1000 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
Prem buy the bond? (5 marks)
ii) Calculate the yield to maturity of the bond. (8 marks)
Level 4 Analysing
11
The returns on securities A and B are given below :
Probability Security A Security B
0.5 4 0
Level 1 Remembering
0.4 2 3
0.1 0 3
i) What is the expected return for security A and B.? The security
has to be selected on the basis of return and risk.(4 marks )
ii) If the investor invests an equal proportion on both the scrips,
what would be the return? ( 4 marks )
iii)If the proportion is changed to 25 % and 75 % what would be the
return?( 5 marks)
12
How would you summarize the statement ?The investment process
involves a series of activities starting from the policy formulation??
Level 2 Understanding
13
Returns for a stock has the following probability distribution :
Possible Returns Probability of
Occurrence
-25 0.05
-10 0.10
0 0.10
15 0.15
20 0.25
30 0.20
35 0.15
(i)Calculate the variance (9 marks )
(ii)Also calculate the standard deviation( 4 marks )
Level 4 Analysing
14
i) Mention the Characteristics Of Investment in Real Estate. (5marks)
Level 1 Remembering
ii) What are the characteristics of investments in Mutual funds?
(8 marks)
PART - C
S.NO QUESTIONS
1
Assume that you know for certain that market is heading towards the boom period. Should you
buy a common stock based upon this information?
2
R.S Verma is considering investing in a bond currently selling for Rs.8785.07. The bond has
four years to maturity, a Rs.10, 000 face value and a 8% Coupon rate. The next annual interest
payment is due one year from today. The approximate discount factor for investments of
similar risk is 10%.
i)Calculate the intrinsic value of the bond. Based on this calculation, should Verma purchase
the bond.(8 marks)
ii)Calculate the YTM of the bond .Based on this calculation, should Verma purchase the
bond.(7 marks)
3
A mutual fund has earned an average annual return of 24 per cent over a five year period while
the average market return over the same period was only 18 per cent. The risk free rate
prevailing at the time was 7.5 per cent. The mutual fund had a beta of 1.45. The standard
deviation of return of the mutual fund and the market index were 40 percent and 30 per cent
respectively. Calculate Fama?s net selectivity for the fund, showing the decomposition of
performance.
4
Consider two situations: a young man X in early twenties and another young man Y in the
late thirties. X and Y earns same amount of money. Mr. Y has a family, a car and all the
encumbrances related with the marital status. Both of them like to invest in securities, what
would be their constraints and objectives.
UNIT ? II ? SECURITIES MARKETS
SYLLABUS: Financial Market - Segments ? Types - - Participants in financial Market ? Regulatory
Environment, Primary Market ? Methods of floating new issues, Book building ? Role of primary
market ? Regulation of primary market, Stock exchanges in India ? BSE, OTCEI , NSE, ISE, and
Regulations of stock exchanges ? Trading system in stock exchanges ?SEBI.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is Book building and IPO?
Level 1 Remembering
2
Explain reverse book building
Level 2 Understanding
3
Identify the different types of security markets.
Level 3 Applying
4
Analyse the meaning of underwriting.
Level 4 Analysing
5
What is your opinion about primary market?
Level 5 Evaluating
6
Interpret the role of Capital Market.
Level 6 Creating
7
Identify the importance of IPO grading. What decisions
are taken before going in for IPO?
Level 1 Remembering
8
Explain the meaning of oversubscription.
Level 2 Understanding
9
What facts would you select to show that OCTEI is
different from other stock?
Level 3 Applying
10
Analyse the parties involved in issue of shares in stock
market.
Level 4 Analysing
11
What is the rolling settlement in trading of securities?
Level 5 Evaluating
12
Interpret whether trading on margin a good idea.
Level 6 Creating
13
Who are the participants in financial market?
Level 1 Remembering
14
Distinguish between capital market and money market.
Level 2 Understanding
15
Identify objectives of OTCEI.
Level 3 Applying
16
Compare BSE and NSE.
Level 4 Analysing
17
What is insider trading?
Level 1 Remembering
18
Explain an odd lot.
Level 2 Understanding
19
Name any four market indices in Indian stock market.
Level 1 Remembering
20
List the functions of SEBI.
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
How would you explain the Role of SEBI in primary and secondary
market?
Level 1 Remembering
2
Explain the characteristics of Book Building and its process.
Level 2 Understanding
3
i) Describe functions of NSDL(6 marks)
Level 3 Applying
ii) Identify the various ways in which an initial public offer can be
made? (7 marks)
4
i) The strength of the economy depends upon the capital market-
Discuss ( 7 marks)
Level 4 Analysing
ii) Compare Primary and Secondary market.(6 marks)
5 Evaluate the different segments of financial market? Level 5 Evaluating
6.
?Stock exchange provides the linkage between the savings in the
household sector and the investments in the corporate sector?.
Explain.
Level 6 Creating
7
i) What are NSE, BSE and ISE? (5 marks)
Level 1 Remembering
ii) Discuss their features and advantages. (8 marks)
8
What can you say about the investors? protection measures taken by
the regulatory authorities in the primary market?
Level 2 Understanding
9
i) How do you show your understanding of IPO ?(5 marks )
Level 3 Applying
ii) Identify the steps taken by SEBI to protect the investors in the
secondary market.(8 marks)
10
i) Analyse how stock indices are formed.(5 marks)
Level 4 Analysing
ii) Compare the major indices and how it helps investors. (8 marks)
11
What are the functions of Stock Exchange?
Level 1 Remembering
12
i) Describe functions of primary market.(6 marks )
Level 2 Understanding
ii) Explain the changes in the trading system of stock exchanges
brought forth by SEBI in the recent years. (7 marks)
13
Analyse the factors to be taken into account when an
investor decides to invest in the primary market.
Level 4 Analysing
14
i) What are the Objectives of OTCEI? (5 marks)
Level 1 Remembering
ii) What are the features and benefits of OTCEI? (8 marks)
PART - C
S.NO QUESTIONS
1 Discuss the recent policy initiatives and developments in the capital market in India.
2 What are the Objectives, functions and powers of SEBI?
3 Comment on the role played by the key players involved in the new issue market.
4 What are the main objectives of NSE? Explain the trends in NSE.
UNIT ? III ? FUNDAMENTAL ANALYSIS
SYLLABUS: Economic Analysis ? Economic forecasting and stock Investment Decisions ?
Forecasting techniques. Industry Analysis : Industry classification, Industry life cycle ? Company
Analysis Measuring Earnings ? Forecasting Earnings ? Applied Valuation Techniques ? Graham and
Dodds investor ratios.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is industry life cycle analysis?
Level 1 Remembering
2
Explain the meaning of leading indicators of the economy?
Give 2 Examples
Level 2 Understanding
3
What do you understand by EIC framework to security
analysis?
Level 3 Applying
4
Analyse how Economic Forecasting is done.
Level 4 Analysing
5
Discuss the meaning economic analysis
Level 5 Evaluating
6
Interpret the industry life cycle stages.
Level 6 Creating
7
What is the importance of P/E ratio?
Level 1 Remembering
8
What is Value vs. Growth investing?
Level 2 Understanding
9
Identify the meaning of opportunistic building model.
Level 3 Applying
10
Analyse the ratios listed by Graham and Dodd for value
investing.
Level 4 Analysing
11
Discuss the significance of ROI in company analysis.
Level 5 Evaluating
12
Interpret the concept of company analysis
Level 6 Creating
13
What do you mean by lagging indicators of the
economy? Give 2 Examples
Level 1 Remembering
14
Explain Graham and Dodd?s investor ratios?
Level 2 Understanding
15
Identify the meaning of coincidental and lagging
indicators of the economy? Give 2 Examples.
Level 3 Applying
16
Classify industry according to cycle.
Level 4 Analysing
17
What is SWOT analysis?
Level 1 Remembering
18
Explain the use of ratio analysis?
Level 2 Understanding
19
What is meant by fundamental analysis?
Level 1 Remembering
20
What is intrinsic value of a share?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
i) Define ROI .(3 marks)
Level 1 Remembering
ii) What are the methods of computation of ROI in company
analysis.(10 marks)
2
Explain two commonly used ways of decomposing ROE into its
underlying determinant.
Level 2 Understanding
3
i) Identify the need for company analysis.(3 marks)
Level 3 Applying
ii) Discuss the key tools used in Company analysis.(10 marks)
4
Why do you think industry analysis is important? Why should it
include the economic analysis?
Level 4 Analysing
5
Discus the ratios calculated by the investor before making the
investments.
Level 5 Evaluating
6.
Can you elaborate Graham and Dodd's investor ratios with respect to
Fundamental analysis?
Level 6 Creating
7
What are the factors affecting Industry analysis?
Level 1 Remembering
8
?Fundamental analysis provides an analytical frame work for
rational investment decision - making?. Explain.
Level 2 Understanding
9
How would you show your understanding of EIC framework?
Level 3 Applying
10
Analyze the factors considered to be most important in appraising
companies in different industries. Level 4 Analysing
11
i) Do you think that knowing the current status of economy is useful
in analyzing stock market movements.( 4 marks)
Level 1 Remembering
ii) What are the factors affecting economic analysis?(9 marks)
12
Summarize on the concept of stock investment decision.
Level 2 Understanding
13
Compare the different stages in Industry life cycle.
Level 4 Analysing
14
How would you explain that various indicators predict the prospect
for investment in stocks?
Level 1 Remembering
PART - C
S.NO QUESTIONS
1
i) As an analyst, discuss the concept of an industry lifecycle by describing each of its four
phases .In which phase of the lifecycle, investments in an industry are most attractive?
(12marks)
ii) Why is industry life cycle important to investors? (3marks)
2
Foreign investors look for certain key factors before investing in Indian Economy. -
Elaborate.
3 Enumerate the significance of economic forecasting in fundamental analysis.
4
?The level, trend and stability of earnings of a company depend upon a number of factors
concerning the operation of the company. Discuss.
UNIT ? IV ? TECHNICAL ANALYSIS
SYLLABUS: Fundamental Analysis Vs Technical Analysis ? Charting methods ? Market Indicators.
Trend ? Trend reversals ? Patterns - Moving Average ? Exponential moving Average ? Oscillators ?
Market Indicators ? Efficient Market theory.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Explain the three types of trends in stock prices
Level 1 Remembering
2
Explain the importance of Oscillators in technical analysis.
Level 2 Understanding
3
Differentiate fundamental analysis from technical analysis.
Level 3 Applying
4
Analyse the moving average theory of technical analysis.
Level 4 Analysing
5
What is the theme of Technical analysis?
Level 5 Evaluating
6
Draw and Interpret a Line Chart.
Level 6 Creating
7
Define RSI and its usage.
Level 1 Remembering
8
Explain MACD
Level 2 Understanding
9
Compare ROC I and ROC II.
Level 3 Applying
10
Analyse the two major market indicators considered
as a barometer of Indian capital market.
Level 4 Analysing
11
How do the leverage policies affect the company
performances?
Level 5 Evaluating
12
What do you mean by security market line? Define
?Efficient frontier?.
Level 6 Creating
13
What is Random Walk Hypothesis? What are the
various levels of market Efficiency?
Level 1 Remembering
14
Explain trend reversal.
Level 2 Understanding
15
How will you identify support level of a stock?
Level 3 Applying
16
Analyse any two oscillators.
Level 4 Analysing
17
What are Oscillators?
Level 1 Remembering
18
What is resistance level of a stock?
Level 2 Understanding
19
What are price charts and short sale?
Level 1 Remembering
20
What is Beta? Is it a better measure of risk than the
standard deviation?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
i) What are the premises of technical analysis? (5marks)
Level 1 Remembering
ii) What are the differences between Technical and fundamental
analysis? (8marks)
2
Illustrate ?Chart patterns are helpful in predicting the stock price
movement?.
Level 2 Understanding
3
i) How would you use ROC to predict the stock price movement?
(4marks)
Level 3 Applying
ii) Compute and differentiate ROC I and ROC II( 9 marks)
4
Analyse the weak form of the efficient market hypothesis. Describe
the empirical tests used for testing the weak form efficiency.
Level 4 Analysing
5
Moving average not only smoothens the data, but also predict the
market ? Discuss with an example.
Level 5 Evaluating
6.
Interpret how volume and breadth of the market indicate the trend of
the market.
Level 6 Creating
7
i) What are the advantages of oscillators? (5marks)
Level 1 Remembering
ii) Discuss the types of oscillators. (8marks)
8
Explain the various forms of market efficiency and the empirical
tests.
Level 2 Understanding
9
How would you show your understanding on the Dow theory and
explain how is it used to determine the direction of the stock market.
Level 3 Applying
10
Describe the chart patterns which help in identifying trend reversal.
Level 4 Analysing
11
i)What is the concept of random walk theory? (8marks)
Level 1 Remembering
ii)Discuss its implications and limitations.(5marks)
12
Explain the following
i) Bar chart (2marks)
ii) Line Chart(3marks)
iii) Point and figure chart(4marks)
Level 2 Understanding
iv) Japanese candlestick chart(4marks)
13
i)Analyse the principles of Technical Analysis.(5marks)
Level 4 Analysing
ii)Classify oscillators used by technical analysts (8 marks)
14
i) What is RSI?(5marks)
Level 1 Remembering
ii) How is it calculated? (8marks)
PART - C
S.NO QUESTIONS
1 Discuss the empirical evidences of the strong form and weak form of market efficiency.
2
How does technical analysis differ from fundamental analysis? Explain the ways in which the
technicians think before they act?
3 What are the statistical tools used to measure the risk of the securities return? Explain.
4 Interpret the various volume indicators in stock market.
UNIT ? V ? PORTFOLIO MANAGEMENT
SYLLABUS: Portfolio analysis ?Portfolio Selection ?Capital Asset Pricing model ? Portfolio
Revision Portfolio Evaluation ? Mutual Funds.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is CAPM?
Level 1 Remembering
2
Explain the criteria for evaluation of portfolio.
Level 2 Understanding
3
What is an index fund?
Level 3 Applying
4
Distinguish between SML AND CML.
Level 4 Analysing
5
Discuss how is Beta computed using CAPM?
Level 5 Evaluating
6
Interpret the term AMC.
Level 6 Creating
7
What do you mean by diversification?
Level 1 Remembering
8
How would you summarize portfolio selection?
Level 2 Understanding
9
Compare entry and exit load in mutual fund.
Level 3 Applying
10
Analyse the term Jensen measure.
Level 4 Analysing
11
What is your opinion of portfolio management?
Level 5 Evaluating
12
Interpret the term NAV.
Level 6 Creating
13
What are formula plans?
Level 1 Remembering
14
State the importance of mutual funds.
Level 2 Understanding
15
Compare open ended and closed ended funds
Level 3 Applying
16
What are mutual funds?
Level 4 Analysing
17
What is Treynor?s index?
Level 1 Remembering
18
Can you explain about passive management?
Level 2 Understanding
19
What is portfolio revision?
Level 1 Remembering
20
How would you explain the importance of gilt edged fund?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
How will you explain the concept and process of portfolio analysis?
Level 1 Remembering
2 ?Mutual fund offers best form of investments.? Discuss. Level 2 Understanding
3 Develop a detailed account on the Markowitz?s risk diversification. Level 3 Applying
4
Analyse with example the patterns of portfolio revision.
Level 4 Analysing
5
Trace growth of mutual funds in India. What is the need to regulate
different types of mutual funds in India?
Level 5 Evaluating
6.
Following are the price and other details of 3 stocks.
Stock Beginning
Price
Dividend
Paid
Ending Price
X 30 3.40 34
Y 72 4.70 69
Z 140 4.80 146
Construct a portfolio with these securities having the proportions as
0.7, 0.5 and 0.2 assume the standard deviation (in terms of
percentage) to be 6, 9 and 10 for stocks X, Y and Z respectively.
Interpret the portfolio return.
Level 6 Creating
7
How would you explain the scope and objectives of investment
portfolio Management?
Level 1 Remembering
8
Draw & Explain ?Efficient Frontier?.
Level 2 Understanding
FirstRanker.com - FirstRanker's Choice
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
What are the investor?s objectives in investing his funds in the stock
market?
Level 1 Remembering
2
Explain the various choices of Investment alternatives
available for an Investor with moderate risk taking capabilities.
Level 2 Understanding
3
Identify the different investment alternatives in India.
Level 3 Applying
4
(i)Without adequate information the investor cannot carry out his
investment programme. Analyse.(8 marks)
Level 4 Analysing
(ii)Elucidate if there will be a trade- off between risk and return in
Investments? (5 marks)
5
(i)Discuss the various features of mutual funds. (5 marks)
Level 5 Evaluating
(ii)Discuss the various mutual fund schemes available for
investors. (8 marks)
6.
(i) There are so many types of bonds - Interpret. (7marks)
Level 6 Creating
(ii) Interpret the various types of preference shares. (6marks)
7
A bond of Rs.1000 face value bearing a Coupon rate of 12%
will mature after 7 years.
(i)What is the value of the bond if the discount rates is 14%?(7marks)
(ii)What is the value of the bond if the discount rates is12%?(6 marks)
Level 1 Remembering
8
Anand owns Rs.1000 face value bond with five years to maturity.
The bond has an annual coupon of Rs.75. The bond is currently
priced at Rs.970.
Given an appropriate discount rate of 10%, Explain whether Anand
should hold or sell the Bond?
Level 2 Understanding
9
i) Identify the price of Rs.1000 Zero Coupon bond with yield to
maturity of 18% and 10 years to maturity.(5 marks)
ii) What is YTM of this bond if its price is Rs.220? (8 marks)
Level 3 Applying
10
Prem is considering the purchase of a bond Currently selling at
Rs.878.50. The bond has four years of maturity, face value of
Rs.1000 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
Prem buy the bond? (5 marks)
ii) Calculate the yield to maturity of the bond. (8 marks)
Level 4 Analysing
11
The returns on securities A and B are given below :
Probability Security A Security B
0.5 4 0
Level 1 Remembering
0.4 2 3
0.1 0 3
i) What is the expected return for security A and B.? The security
has to be selected on the basis of return and risk.(4 marks )
ii) If the investor invests an equal proportion on both the scrips,
what would be the return? ( 4 marks )
iii)If the proportion is changed to 25 % and 75 % what would be the
return?( 5 marks)
12
How would you summarize the statement ?The investment process
involves a series of activities starting from the policy formulation??
Level 2 Understanding
13
Returns for a stock has the following probability distribution :
Possible Returns Probability of
Occurrence
-25 0.05
-10 0.10
0 0.10
15 0.15
20 0.25
30 0.20
35 0.15
(i)Calculate the variance (9 marks )
(ii)Also calculate the standard deviation( 4 marks )
Level 4 Analysing
14
i) Mention the Characteristics Of Investment in Real Estate. (5marks)
Level 1 Remembering
ii) What are the characteristics of investments in Mutual funds?
(8 marks)
PART - C
S.NO QUESTIONS
1
Assume that you know for certain that market is heading towards the boom period. Should you
buy a common stock based upon this information?
2
R.S Verma is considering investing in a bond currently selling for Rs.8785.07. The bond has
four years to maturity, a Rs.10, 000 face value and a 8% Coupon rate. The next annual interest
payment is due one year from today. The approximate discount factor for investments of
similar risk is 10%.
i)Calculate the intrinsic value of the bond. Based on this calculation, should Verma purchase
the bond.(8 marks)
ii)Calculate the YTM of the bond .Based on this calculation, should Verma purchase the
bond.(7 marks)
3
A mutual fund has earned an average annual return of 24 per cent over a five year period while
the average market return over the same period was only 18 per cent. The risk free rate
prevailing at the time was 7.5 per cent. The mutual fund had a beta of 1.45. The standard
deviation of return of the mutual fund and the market index were 40 percent and 30 per cent
respectively. Calculate Fama?s net selectivity for the fund, showing the decomposition of
performance.
4
Consider two situations: a young man X in early twenties and another young man Y in the
late thirties. X and Y earns same amount of money. Mr. Y has a family, a car and all the
encumbrances related with the marital status. Both of them like to invest in securities, what
would be their constraints and objectives.
UNIT ? II ? SECURITIES MARKETS
SYLLABUS: Financial Market - Segments ? Types - - Participants in financial Market ? Regulatory
Environment, Primary Market ? Methods of floating new issues, Book building ? Role of primary
market ? Regulation of primary market, Stock exchanges in India ? BSE, OTCEI , NSE, ISE, and
Regulations of stock exchanges ? Trading system in stock exchanges ?SEBI.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is Book building and IPO?
Level 1 Remembering
2
Explain reverse book building
Level 2 Understanding
3
Identify the different types of security markets.
Level 3 Applying
4
Analyse the meaning of underwriting.
Level 4 Analysing
5
What is your opinion about primary market?
Level 5 Evaluating
6
Interpret the role of Capital Market.
Level 6 Creating
7
Identify the importance of IPO grading. What decisions
are taken before going in for IPO?
Level 1 Remembering
8
Explain the meaning of oversubscription.
Level 2 Understanding
9
What facts would you select to show that OCTEI is
different from other stock?
Level 3 Applying
10
Analyse the parties involved in issue of shares in stock
market.
Level 4 Analysing
11
What is the rolling settlement in trading of securities?
Level 5 Evaluating
12
Interpret whether trading on margin a good idea.
Level 6 Creating
13
Who are the participants in financial market?
Level 1 Remembering
14
Distinguish between capital market and money market.
Level 2 Understanding
15
Identify objectives of OTCEI.
Level 3 Applying
16
Compare BSE and NSE.
Level 4 Analysing
17
What is insider trading?
Level 1 Remembering
18
Explain an odd lot.
Level 2 Understanding
19
Name any four market indices in Indian stock market.
Level 1 Remembering
20
List the functions of SEBI.
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
How would you explain the Role of SEBI in primary and secondary
market?
Level 1 Remembering
2
Explain the characteristics of Book Building and its process.
Level 2 Understanding
3
i) Describe functions of NSDL(6 marks)
Level 3 Applying
ii) Identify the various ways in which an initial public offer can be
made? (7 marks)
4
i) The strength of the economy depends upon the capital market-
Discuss ( 7 marks)
Level 4 Analysing
ii) Compare Primary and Secondary market.(6 marks)
5 Evaluate the different segments of financial market? Level 5 Evaluating
6.
?Stock exchange provides the linkage between the savings in the
household sector and the investments in the corporate sector?.
Explain.
Level 6 Creating
7
i) What are NSE, BSE and ISE? (5 marks)
Level 1 Remembering
ii) Discuss their features and advantages. (8 marks)
8
What can you say about the investors? protection measures taken by
the regulatory authorities in the primary market?
Level 2 Understanding
9
i) How do you show your understanding of IPO ?(5 marks )
Level 3 Applying
ii) Identify the steps taken by SEBI to protect the investors in the
secondary market.(8 marks)
10
i) Analyse how stock indices are formed.(5 marks)
Level 4 Analysing
ii) Compare the major indices and how it helps investors. (8 marks)
11
What are the functions of Stock Exchange?
Level 1 Remembering
12
i) Describe functions of primary market.(6 marks )
Level 2 Understanding
ii) Explain the changes in the trading system of stock exchanges
brought forth by SEBI in the recent years. (7 marks)
13
Analyse the factors to be taken into account when an
investor decides to invest in the primary market.
Level 4 Analysing
14
i) What are the Objectives of OTCEI? (5 marks)
Level 1 Remembering
ii) What are the features and benefits of OTCEI? (8 marks)
PART - C
S.NO QUESTIONS
1 Discuss the recent policy initiatives and developments in the capital market in India.
2 What are the Objectives, functions and powers of SEBI?
3 Comment on the role played by the key players involved in the new issue market.
4 What are the main objectives of NSE? Explain the trends in NSE.
UNIT ? III ? FUNDAMENTAL ANALYSIS
SYLLABUS: Economic Analysis ? Economic forecasting and stock Investment Decisions ?
Forecasting techniques. Industry Analysis : Industry classification, Industry life cycle ? Company
Analysis Measuring Earnings ? Forecasting Earnings ? Applied Valuation Techniques ? Graham and
Dodds investor ratios.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is industry life cycle analysis?
Level 1 Remembering
2
Explain the meaning of leading indicators of the economy?
Give 2 Examples
Level 2 Understanding
3
What do you understand by EIC framework to security
analysis?
Level 3 Applying
4
Analyse how Economic Forecasting is done.
Level 4 Analysing
5
Discuss the meaning economic analysis
Level 5 Evaluating
6
Interpret the industry life cycle stages.
Level 6 Creating
7
What is the importance of P/E ratio?
Level 1 Remembering
8
What is Value vs. Growth investing?
Level 2 Understanding
9
Identify the meaning of opportunistic building model.
Level 3 Applying
10
Analyse the ratios listed by Graham and Dodd for value
investing.
Level 4 Analysing
11
Discuss the significance of ROI in company analysis.
Level 5 Evaluating
12
Interpret the concept of company analysis
Level 6 Creating
13
What do you mean by lagging indicators of the
economy? Give 2 Examples
Level 1 Remembering
14
Explain Graham and Dodd?s investor ratios?
Level 2 Understanding
15
Identify the meaning of coincidental and lagging
indicators of the economy? Give 2 Examples.
Level 3 Applying
16
Classify industry according to cycle.
Level 4 Analysing
17
What is SWOT analysis?
Level 1 Remembering
18
Explain the use of ratio analysis?
Level 2 Understanding
19
What is meant by fundamental analysis?
Level 1 Remembering
20
What is intrinsic value of a share?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
i) Define ROI .(3 marks)
Level 1 Remembering
ii) What are the methods of computation of ROI in company
analysis.(10 marks)
2
Explain two commonly used ways of decomposing ROE into its
underlying determinant.
Level 2 Understanding
3
i) Identify the need for company analysis.(3 marks)
Level 3 Applying
ii) Discuss the key tools used in Company analysis.(10 marks)
4
Why do you think industry analysis is important? Why should it
include the economic analysis?
Level 4 Analysing
5
Discus the ratios calculated by the investor before making the
investments.
Level 5 Evaluating
6.
Can you elaborate Graham and Dodd's investor ratios with respect to
Fundamental analysis?
Level 6 Creating
7
What are the factors affecting Industry analysis?
Level 1 Remembering
8
?Fundamental analysis provides an analytical frame work for
rational investment decision - making?. Explain.
Level 2 Understanding
9
How would you show your understanding of EIC framework?
Level 3 Applying
10
Analyze the factors considered to be most important in appraising
companies in different industries. Level 4 Analysing
11
i) Do you think that knowing the current status of economy is useful
in analyzing stock market movements.( 4 marks)
Level 1 Remembering
ii) What are the factors affecting economic analysis?(9 marks)
12
Summarize on the concept of stock investment decision.
Level 2 Understanding
13
Compare the different stages in Industry life cycle.
Level 4 Analysing
14
How would you explain that various indicators predict the prospect
for investment in stocks?
Level 1 Remembering
PART - C
S.NO QUESTIONS
1
i) As an analyst, discuss the concept of an industry lifecycle by describing each of its four
phases .In which phase of the lifecycle, investments in an industry are most attractive?
(12marks)
ii) Why is industry life cycle important to investors? (3marks)
2
Foreign investors look for certain key factors before investing in Indian Economy. -
Elaborate.
3 Enumerate the significance of economic forecasting in fundamental analysis.
4
?The level, trend and stability of earnings of a company depend upon a number of factors
concerning the operation of the company. Discuss.
UNIT ? IV ? TECHNICAL ANALYSIS
SYLLABUS: Fundamental Analysis Vs Technical Analysis ? Charting methods ? Market Indicators.
Trend ? Trend reversals ? Patterns - Moving Average ? Exponential moving Average ? Oscillators ?
Market Indicators ? Efficient Market theory.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Explain the three types of trends in stock prices
Level 1 Remembering
2
Explain the importance of Oscillators in technical analysis.
Level 2 Understanding
3
Differentiate fundamental analysis from technical analysis.
Level 3 Applying
4
Analyse the moving average theory of technical analysis.
Level 4 Analysing
5
What is the theme of Technical analysis?
Level 5 Evaluating
6
Draw and Interpret a Line Chart.
Level 6 Creating
7
Define RSI and its usage.
Level 1 Remembering
8
Explain MACD
Level 2 Understanding
9
Compare ROC I and ROC II.
Level 3 Applying
10
Analyse the two major market indicators considered
as a barometer of Indian capital market.
Level 4 Analysing
11
How do the leverage policies affect the company
performances?
Level 5 Evaluating
12
What do you mean by security market line? Define
?Efficient frontier?.
Level 6 Creating
13
What is Random Walk Hypothesis? What are the
various levels of market Efficiency?
Level 1 Remembering
14
Explain trend reversal.
Level 2 Understanding
15
How will you identify support level of a stock?
Level 3 Applying
16
Analyse any two oscillators.
Level 4 Analysing
17
What are Oscillators?
Level 1 Remembering
18
What is resistance level of a stock?
Level 2 Understanding
19
What are price charts and short sale?
Level 1 Remembering
20
What is Beta? Is it a better measure of risk than the
standard deviation?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
i) What are the premises of technical analysis? (5marks)
Level 1 Remembering
ii) What are the differences between Technical and fundamental
analysis? (8marks)
2
Illustrate ?Chart patterns are helpful in predicting the stock price
movement?.
Level 2 Understanding
3
i) How would you use ROC to predict the stock price movement?
(4marks)
Level 3 Applying
ii) Compute and differentiate ROC I and ROC II( 9 marks)
4
Analyse the weak form of the efficient market hypothesis. Describe
the empirical tests used for testing the weak form efficiency.
Level 4 Analysing
5
Moving average not only smoothens the data, but also predict the
market ? Discuss with an example.
Level 5 Evaluating
6.
Interpret how volume and breadth of the market indicate the trend of
the market.
Level 6 Creating
7
i) What are the advantages of oscillators? (5marks)
Level 1 Remembering
ii) Discuss the types of oscillators. (8marks)
8
Explain the various forms of market efficiency and the empirical
tests.
Level 2 Understanding
9
How would you show your understanding on the Dow theory and
explain how is it used to determine the direction of the stock market.
Level 3 Applying
10
Describe the chart patterns which help in identifying trend reversal.
Level 4 Analysing
11
i)What is the concept of random walk theory? (8marks)
Level 1 Remembering
ii)Discuss its implications and limitations.(5marks)
12
Explain the following
i) Bar chart (2marks)
ii) Line Chart(3marks)
iii) Point and figure chart(4marks)
Level 2 Understanding
iv) Japanese candlestick chart(4marks)
13
i)Analyse the principles of Technical Analysis.(5marks)
Level 4 Analysing
ii)Classify oscillators used by technical analysts (8 marks)
14
i) What is RSI?(5marks)
Level 1 Remembering
ii) How is it calculated? (8marks)
PART - C
S.NO QUESTIONS
1 Discuss the empirical evidences of the strong form and weak form of market efficiency.
2
How does technical analysis differ from fundamental analysis? Explain the ways in which the
technicians think before they act?
3 What are the statistical tools used to measure the risk of the securities return? Explain.
4 Interpret the various volume indicators in stock market.
UNIT ? V ? PORTFOLIO MANAGEMENT
SYLLABUS: Portfolio analysis ?Portfolio Selection ?Capital Asset Pricing model ? Portfolio
Revision Portfolio Evaluation ? Mutual Funds.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is CAPM?
Level 1 Remembering
2
Explain the criteria for evaluation of portfolio.
Level 2 Understanding
3
What is an index fund?
Level 3 Applying
4
Distinguish between SML AND CML.
Level 4 Analysing
5
Discuss how is Beta computed using CAPM?
Level 5 Evaluating
6
Interpret the term AMC.
Level 6 Creating
7
What do you mean by diversification?
Level 1 Remembering
8
How would you summarize portfolio selection?
Level 2 Understanding
9
Compare entry and exit load in mutual fund.
Level 3 Applying
10
Analyse the term Jensen measure.
Level 4 Analysing
11
What is your opinion of portfolio management?
Level 5 Evaluating
12
Interpret the term NAV.
Level 6 Creating
13
What are formula plans?
Level 1 Remembering
14
State the importance of mutual funds.
Level 2 Understanding
15
Compare open ended and closed ended funds
Level 3 Applying
16
What are mutual funds?
Level 4 Analysing
17
What is Treynor?s index?
Level 1 Remembering
18
Can you explain about passive management?
Level 2 Understanding
19
What is portfolio revision?
Level 1 Remembering
20
How would you explain the importance of gilt edged fund?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
How will you explain the concept and process of portfolio analysis?
Level 1 Remembering
2 ?Mutual fund offers best form of investments.? Discuss. Level 2 Understanding
3 Develop a detailed account on the Markowitz?s risk diversification. Level 3 Applying
4
Analyse with example the patterns of portfolio revision.
Level 4 Analysing
5
Trace growth of mutual funds in India. What is the need to regulate
different types of mutual funds in India?
Level 5 Evaluating
6.
Following are the price and other details of 3 stocks.
Stock Beginning
Price
Dividend
Paid
Ending Price
X 30 3.40 34
Y 72 4.70 69
Z 140 4.80 146
Construct a portfolio with these securities having the proportions as
0.7, 0.5 and 0.2 assume the standard deviation (in terms of
percentage) to be 6, 9 and 10 for stocks X, Y and Z respectively.
Interpret the portfolio return.
Level 6 Creating
7
How would you explain the scope and objectives of investment
portfolio Management?
Level 1 Remembering
8
Draw & Explain ?Efficient Frontier?.
Level 2 Understanding
9
For the hypothetical funds:
Fund Return Risk
free
Excess
Return
SD Beta
1 20 10 10 8 0.8
2 30 10 10 15 1.1
i) Calculate Sharpe and rank them(6 marks )
ii) Will the decision change if Treynor?s ratios is used ?( 7 marks)
Level 3 Applying
10
i) Analyse how CML and SML are constructed. (8marks)
Level 4 Analysing
ii) Differentiate between CML and SML. (5marks)
11
i) What is Markowitz model? State its assumptions. (5marks)
Level 1 Remembering
ii) Explain the selection of optimum portfolio. (8marks)
12
Explain the different measures of portfolio performance.
Level 2 Understanding
13
What are the basic assumptions of CAPM? What are the advantages
of adopting CAPM model in the portfolio management?
Level 4 Analysing
14
i) What do you mean by Mutual Fund and explain various types of
mutual funds?(5marks)
Level 1 Remembering
ii) Explain its structure and advantages. (8marks)
PART - C
S.NO QUESTIONS
1
The following three portfolios provide the particulars given below:
Port folio
Average
annual
return
Standard
deviation
Correlation
co-
efficient
A 18 27 0.8
B 14 18 0.6
C 15 8 0.9
Market
13
12
-
Risk free rate of interest 9%
Rank these portfolios suing Sharpe's and Treynor's methods. Compare both the indices.
FirstRanker.com - FirstRanker's Choice
?
DEPARTMENT OF MANAGEMENT STUDIES
QUESTION BANK
III SEMESTER
BA5012 ? SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Regulation ? 2017
Academic Year 2019 - 2020
Prepared by
Mrs. L.Sujatha ? Asst. Professor
Mr. M. Ganesan@Kaaj ? Asst. Professor
? .
DEPARTMENT OFMANAGEMENT STUDIES
QUESTION BANK
SUBJECT: BA5012 ? SECURITY ANALYSIS &PORTFOLIO MANAGEMENT
SEM / YEAR: III Semester / II Year
UNIT ? I ? INVESTMENT SETTING
SYLLABUS: Financial and economic meaning of Investment ? Characteristics and objectives of
Investment ? Types of Investment ? Investment alternatives ? Choice and Evaluation ? Risk and return
concepts.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Define Investment and hybrid security?
Level 1 Remembering
2
Differentiate investor from speculator.
Level 2 Understanding
3
Identify the two types of information necessary for security
analysis.
Level 3 Applying
4
Classify the different kinds of bonds.
Level 4 Analysing
5
Give five characteristics of common stock.
Level 5 Evaluating
6
Can you assess the importance of warrants?
Level 6 Creating
7
What are the features of preference shares?
Level 1 Remembering
8
Distinguish investment from gambling.
Level 2 Understanding
9
Identify the features of warrants.
Level 3 Applying
10
State your view point about Financial Investment.
Level 4 Analysing
11
Give five qualities required for successful investing.
Level 5 Evaluating
12
Interpret the objectives of Investment.
Level 6 Creating
13
Define security as per security contract regulation act.
Level 1 Remembering
14
Summarize the concept of Risk and Return.
Level 2 Understanding
15
How do you show your understanding on speculation?
Level 3 Applying
16
Classify the types of risk.
Level 4 Analysing
17
What is risk free rate of return?
Level 1 Remembering
18
Discuss financial risk and risk.
Level 2 Understanding
19
Define systematic risk and unsystematic risk.
Level 1 Remembering
20
Why do investors invest in Gold, Silver and Real estate?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
What are the investor?s objectives in investing his funds in the stock
market?
Level 1 Remembering
2
Explain the various choices of Investment alternatives
available for an Investor with moderate risk taking capabilities.
Level 2 Understanding
3
Identify the different investment alternatives in India.
Level 3 Applying
4
(i)Without adequate information the investor cannot carry out his
investment programme. Analyse.(8 marks)
Level 4 Analysing
(ii)Elucidate if there will be a trade- off between risk and return in
Investments? (5 marks)
5
(i)Discuss the various features of mutual funds. (5 marks)
Level 5 Evaluating
(ii)Discuss the various mutual fund schemes available for
investors. (8 marks)
6.
(i) There are so many types of bonds - Interpret. (7marks)
Level 6 Creating
(ii) Interpret the various types of preference shares. (6marks)
7
A bond of Rs.1000 face value bearing a Coupon rate of 12%
will mature after 7 years.
(i)What is the value of the bond if the discount rates is 14%?(7marks)
(ii)What is the value of the bond if the discount rates is12%?(6 marks)
Level 1 Remembering
8
Anand owns Rs.1000 face value bond with five years to maturity.
The bond has an annual coupon of Rs.75. The bond is currently
priced at Rs.970.
Given an appropriate discount rate of 10%, Explain whether Anand
should hold or sell the Bond?
Level 2 Understanding
9
i) Identify the price of Rs.1000 Zero Coupon bond with yield to
maturity of 18% and 10 years to maturity.(5 marks)
ii) What is YTM of this bond if its price is Rs.220? (8 marks)
Level 3 Applying
10
Prem is considering the purchase of a bond Currently selling at
Rs.878.50. The bond has four years of maturity, face value of
Rs.1000 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
Prem buy the bond? (5 marks)
ii) Calculate the yield to maturity of the bond. (8 marks)
Level 4 Analysing
11
The returns on securities A and B are given below :
Probability Security A Security B
0.5 4 0
Level 1 Remembering
0.4 2 3
0.1 0 3
i) What is the expected return for security A and B.? The security
has to be selected on the basis of return and risk.(4 marks )
ii) If the investor invests an equal proportion on both the scrips,
what would be the return? ( 4 marks )
iii)If the proportion is changed to 25 % and 75 % what would be the
return?( 5 marks)
12
How would you summarize the statement ?The investment process
involves a series of activities starting from the policy formulation??
Level 2 Understanding
13
Returns for a stock has the following probability distribution :
Possible Returns Probability of
Occurrence
-25 0.05
-10 0.10
0 0.10
15 0.15
20 0.25
30 0.20
35 0.15
(i)Calculate the variance (9 marks )
(ii)Also calculate the standard deviation( 4 marks )
Level 4 Analysing
14
i) Mention the Characteristics Of Investment in Real Estate. (5marks)
Level 1 Remembering
ii) What are the characteristics of investments in Mutual funds?
(8 marks)
PART - C
S.NO QUESTIONS
1
Assume that you know for certain that market is heading towards the boom period. Should you
buy a common stock based upon this information?
2
R.S Verma is considering investing in a bond currently selling for Rs.8785.07. The bond has
four years to maturity, a Rs.10, 000 face value and a 8% Coupon rate. The next annual interest
payment is due one year from today. The approximate discount factor for investments of
similar risk is 10%.
i)Calculate the intrinsic value of the bond. Based on this calculation, should Verma purchase
the bond.(8 marks)
ii)Calculate the YTM of the bond .Based on this calculation, should Verma purchase the
bond.(7 marks)
3
A mutual fund has earned an average annual return of 24 per cent over a five year period while
the average market return over the same period was only 18 per cent. The risk free rate
prevailing at the time was 7.5 per cent. The mutual fund had a beta of 1.45. The standard
deviation of return of the mutual fund and the market index were 40 percent and 30 per cent
respectively. Calculate Fama?s net selectivity for the fund, showing the decomposition of
performance.
4
Consider two situations: a young man X in early twenties and another young man Y in the
late thirties. X and Y earns same amount of money. Mr. Y has a family, a car and all the
encumbrances related with the marital status. Both of them like to invest in securities, what
would be their constraints and objectives.
UNIT ? II ? SECURITIES MARKETS
SYLLABUS: Financial Market - Segments ? Types - - Participants in financial Market ? Regulatory
Environment, Primary Market ? Methods of floating new issues, Book building ? Role of primary
market ? Regulation of primary market, Stock exchanges in India ? BSE, OTCEI , NSE, ISE, and
Regulations of stock exchanges ? Trading system in stock exchanges ?SEBI.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is Book building and IPO?
Level 1 Remembering
2
Explain reverse book building
Level 2 Understanding
3
Identify the different types of security markets.
Level 3 Applying
4
Analyse the meaning of underwriting.
Level 4 Analysing
5
What is your opinion about primary market?
Level 5 Evaluating
6
Interpret the role of Capital Market.
Level 6 Creating
7
Identify the importance of IPO grading. What decisions
are taken before going in for IPO?
Level 1 Remembering
8
Explain the meaning of oversubscription.
Level 2 Understanding
9
What facts would you select to show that OCTEI is
different from other stock?
Level 3 Applying
10
Analyse the parties involved in issue of shares in stock
market.
Level 4 Analysing
11
What is the rolling settlement in trading of securities?
Level 5 Evaluating
12
Interpret whether trading on margin a good idea.
Level 6 Creating
13
Who are the participants in financial market?
Level 1 Remembering
14
Distinguish between capital market and money market.
Level 2 Understanding
15
Identify objectives of OTCEI.
Level 3 Applying
16
Compare BSE and NSE.
Level 4 Analysing
17
What is insider trading?
Level 1 Remembering
18
Explain an odd lot.
Level 2 Understanding
19
Name any four market indices in Indian stock market.
Level 1 Remembering
20
List the functions of SEBI.
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
How would you explain the Role of SEBI in primary and secondary
market?
Level 1 Remembering
2
Explain the characteristics of Book Building and its process.
Level 2 Understanding
3
i) Describe functions of NSDL(6 marks)
Level 3 Applying
ii) Identify the various ways in which an initial public offer can be
made? (7 marks)
4
i) The strength of the economy depends upon the capital market-
Discuss ( 7 marks)
Level 4 Analysing
ii) Compare Primary and Secondary market.(6 marks)
5 Evaluate the different segments of financial market? Level 5 Evaluating
6.
?Stock exchange provides the linkage between the savings in the
household sector and the investments in the corporate sector?.
Explain.
Level 6 Creating
7
i) What are NSE, BSE and ISE? (5 marks)
Level 1 Remembering
ii) Discuss their features and advantages. (8 marks)
8
What can you say about the investors? protection measures taken by
the regulatory authorities in the primary market?
Level 2 Understanding
9
i) How do you show your understanding of IPO ?(5 marks )
Level 3 Applying
ii) Identify the steps taken by SEBI to protect the investors in the
secondary market.(8 marks)
10
i) Analyse how stock indices are formed.(5 marks)
Level 4 Analysing
ii) Compare the major indices and how it helps investors. (8 marks)
11
What are the functions of Stock Exchange?
Level 1 Remembering
12
i) Describe functions of primary market.(6 marks )
Level 2 Understanding
ii) Explain the changes in the trading system of stock exchanges
brought forth by SEBI in the recent years. (7 marks)
13
Analyse the factors to be taken into account when an
investor decides to invest in the primary market.
Level 4 Analysing
14
i) What are the Objectives of OTCEI? (5 marks)
Level 1 Remembering
ii) What are the features and benefits of OTCEI? (8 marks)
PART - C
S.NO QUESTIONS
1 Discuss the recent policy initiatives and developments in the capital market in India.
2 What are the Objectives, functions and powers of SEBI?
3 Comment on the role played by the key players involved in the new issue market.
4 What are the main objectives of NSE? Explain the trends in NSE.
UNIT ? III ? FUNDAMENTAL ANALYSIS
SYLLABUS: Economic Analysis ? Economic forecasting and stock Investment Decisions ?
Forecasting techniques. Industry Analysis : Industry classification, Industry life cycle ? Company
Analysis Measuring Earnings ? Forecasting Earnings ? Applied Valuation Techniques ? Graham and
Dodds investor ratios.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is industry life cycle analysis?
Level 1 Remembering
2
Explain the meaning of leading indicators of the economy?
Give 2 Examples
Level 2 Understanding
3
What do you understand by EIC framework to security
analysis?
Level 3 Applying
4
Analyse how Economic Forecasting is done.
Level 4 Analysing
5
Discuss the meaning economic analysis
Level 5 Evaluating
6
Interpret the industry life cycle stages.
Level 6 Creating
7
What is the importance of P/E ratio?
Level 1 Remembering
8
What is Value vs. Growth investing?
Level 2 Understanding
9
Identify the meaning of opportunistic building model.
Level 3 Applying
10
Analyse the ratios listed by Graham and Dodd for value
investing.
Level 4 Analysing
11
Discuss the significance of ROI in company analysis.
Level 5 Evaluating
12
Interpret the concept of company analysis
Level 6 Creating
13
What do you mean by lagging indicators of the
economy? Give 2 Examples
Level 1 Remembering
14
Explain Graham and Dodd?s investor ratios?
Level 2 Understanding
15
Identify the meaning of coincidental and lagging
indicators of the economy? Give 2 Examples.
Level 3 Applying
16
Classify industry according to cycle.
Level 4 Analysing
17
What is SWOT analysis?
Level 1 Remembering
18
Explain the use of ratio analysis?
Level 2 Understanding
19
What is meant by fundamental analysis?
Level 1 Remembering
20
What is intrinsic value of a share?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
i) Define ROI .(3 marks)
Level 1 Remembering
ii) What are the methods of computation of ROI in company
analysis.(10 marks)
2
Explain two commonly used ways of decomposing ROE into its
underlying determinant.
Level 2 Understanding
3
i) Identify the need for company analysis.(3 marks)
Level 3 Applying
ii) Discuss the key tools used in Company analysis.(10 marks)
4
Why do you think industry analysis is important? Why should it
include the economic analysis?
Level 4 Analysing
5
Discus the ratios calculated by the investor before making the
investments.
Level 5 Evaluating
6.
Can you elaborate Graham and Dodd's investor ratios with respect to
Fundamental analysis?
Level 6 Creating
7
What are the factors affecting Industry analysis?
Level 1 Remembering
8
?Fundamental analysis provides an analytical frame work for
rational investment decision - making?. Explain.
Level 2 Understanding
9
How would you show your understanding of EIC framework?
Level 3 Applying
10
Analyze the factors considered to be most important in appraising
companies in different industries. Level 4 Analysing
11
i) Do you think that knowing the current status of economy is useful
in analyzing stock market movements.( 4 marks)
Level 1 Remembering
ii) What are the factors affecting economic analysis?(9 marks)
12
Summarize on the concept of stock investment decision.
Level 2 Understanding
13
Compare the different stages in Industry life cycle.
Level 4 Analysing
14
How would you explain that various indicators predict the prospect
for investment in stocks?
Level 1 Remembering
PART - C
S.NO QUESTIONS
1
i) As an analyst, discuss the concept of an industry lifecycle by describing each of its four
phases .In which phase of the lifecycle, investments in an industry are most attractive?
(12marks)
ii) Why is industry life cycle important to investors? (3marks)
2
Foreign investors look for certain key factors before investing in Indian Economy. -
Elaborate.
3 Enumerate the significance of economic forecasting in fundamental analysis.
4
?The level, trend and stability of earnings of a company depend upon a number of factors
concerning the operation of the company. Discuss.
UNIT ? IV ? TECHNICAL ANALYSIS
SYLLABUS: Fundamental Analysis Vs Technical Analysis ? Charting methods ? Market Indicators.
Trend ? Trend reversals ? Patterns - Moving Average ? Exponential moving Average ? Oscillators ?
Market Indicators ? Efficient Market theory.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
Explain the three types of trends in stock prices
Level 1 Remembering
2
Explain the importance of Oscillators in technical analysis.
Level 2 Understanding
3
Differentiate fundamental analysis from technical analysis.
Level 3 Applying
4
Analyse the moving average theory of technical analysis.
Level 4 Analysing
5
What is the theme of Technical analysis?
Level 5 Evaluating
6
Draw and Interpret a Line Chart.
Level 6 Creating
7
Define RSI and its usage.
Level 1 Remembering
8
Explain MACD
Level 2 Understanding
9
Compare ROC I and ROC II.
Level 3 Applying
10
Analyse the two major market indicators considered
as a barometer of Indian capital market.
Level 4 Analysing
11
How do the leverage policies affect the company
performances?
Level 5 Evaluating
12
What do you mean by security market line? Define
?Efficient frontier?.
Level 6 Creating
13
What is Random Walk Hypothesis? What are the
various levels of market Efficiency?
Level 1 Remembering
14
Explain trend reversal.
Level 2 Understanding
15
How will you identify support level of a stock?
Level 3 Applying
16
Analyse any two oscillators.
Level 4 Analysing
17
What are Oscillators?
Level 1 Remembering
18
What is resistance level of a stock?
Level 2 Understanding
19
What are price charts and short sale?
Level 1 Remembering
20
What is Beta? Is it a better measure of risk than the
standard deviation?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
i) What are the premises of technical analysis? (5marks)
Level 1 Remembering
ii) What are the differences between Technical and fundamental
analysis? (8marks)
2
Illustrate ?Chart patterns are helpful in predicting the stock price
movement?.
Level 2 Understanding
3
i) How would you use ROC to predict the stock price movement?
(4marks)
Level 3 Applying
ii) Compute and differentiate ROC I and ROC II( 9 marks)
4
Analyse the weak form of the efficient market hypothesis. Describe
the empirical tests used for testing the weak form efficiency.
Level 4 Analysing
5
Moving average not only smoothens the data, but also predict the
market ? Discuss with an example.
Level 5 Evaluating
6.
Interpret how volume and breadth of the market indicate the trend of
the market.
Level 6 Creating
7
i) What are the advantages of oscillators? (5marks)
Level 1 Remembering
ii) Discuss the types of oscillators. (8marks)
8
Explain the various forms of market efficiency and the empirical
tests.
Level 2 Understanding
9
How would you show your understanding on the Dow theory and
explain how is it used to determine the direction of the stock market.
Level 3 Applying
10
Describe the chart patterns which help in identifying trend reversal.
Level 4 Analysing
11
i)What is the concept of random walk theory? (8marks)
Level 1 Remembering
ii)Discuss its implications and limitations.(5marks)
12
Explain the following
i) Bar chart (2marks)
ii) Line Chart(3marks)
iii) Point and figure chart(4marks)
Level 2 Understanding
iv) Japanese candlestick chart(4marks)
13
i)Analyse the principles of Technical Analysis.(5marks)
Level 4 Analysing
ii)Classify oscillators used by technical analysts (8 marks)
14
i) What is RSI?(5marks)
Level 1 Remembering
ii) How is it calculated? (8marks)
PART - C
S.NO QUESTIONS
1 Discuss the empirical evidences of the strong form and weak form of market efficiency.
2
How does technical analysis differ from fundamental analysis? Explain the ways in which the
technicians think before they act?
3 What are the statistical tools used to measure the risk of the securities return? Explain.
4 Interpret the various volume indicators in stock market.
UNIT ? V ? PORTFOLIO MANAGEMENT
SYLLABUS: Portfolio analysis ?Portfolio Selection ?Capital Asset Pricing model ? Portfolio
Revision Portfolio Evaluation ? Mutual Funds.
PART- A
S.NO QUESTIONS BT LEVEL COMPETENCE
1
What is CAPM?
Level 1 Remembering
2
Explain the criteria for evaluation of portfolio.
Level 2 Understanding
3
What is an index fund?
Level 3 Applying
4
Distinguish between SML AND CML.
Level 4 Analysing
5
Discuss how is Beta computed using CAPM?
Level 5 Evaluating
6
Interpret the term AMC.
Level 6 Creating
7
What do you mean by diversification?
Level 1 Remembering
8
How would you summarize portfolio selection?
Level 2 Understanding
9
Compare entry and exit load in mutual fund.
Level 3 Applying
10
Analyse the term Jensen measure.
Level 4 Analysing
11
What is your opinion of portfolio management?
Level 5 Evaluating
12
Interpret the term NAV.
Level 6 Creating
13
What are formula plans?
Level 1 Remembering
14
State the importance of mutual funds.
Level 2 Understanding
15
Compare open ended and closed ended funds
Level 3 Applying
16
What are mutual funds?
Level 4 Analysing
17
What is Treynor?s index?
Level 1 Remembering
18
Can you explain about passive management?
Level 2 Understanding
19
What is portfolio revision?
Level 1 Remembering
20
How would you explain the importance of gilt edged fund?
Level 1 Remembering
PART- B
S.NO QUESTIONS
BT
LEVEL
COMPETENCE
1
How will you explain the concept and process of portfolio analysis?
Level 1 Remembering
2 ?Mutual fund offers best form of investments.? Discuss. Level 2 Understanding
3 Develop a detailed account on the Markowitz?s risk diversification. Level 3 Applying
4
Analyse with example the patterns of portfolio revision.
Level 4 Analysing
5
Trace growth of mutual funds in India. What is the need to regulate
different types of mutual funds in India?
Level 5 Evaluating
6.
Following are the price and other details of 3 stocks.
Stock Beginning
Price
Dividend
Paid
Ending Price
X 30 3.40 34
Y 72 4.70 69
Z 140 4.80 146
Construct a portfolio with these securities having the proportions as
0.7, 0.5 and 0.2 assume the standard deviation (in terms of
percentage) to be 6, 9 and 10 for stocks X, Y and Z respectively.
Interpret the portfolio return.
Level 6 Creating
7
How would you explain the scope and objectives of investment
portfolio Management?
Level 1 Remembering
8
Draw & Explain ?Efficient Frontier?.
Level 2 Understanding
9
For the hypothetical funds:
Fund Return Risk
free
Excess
Return
SD Beta
1 20 10 10 8 0.8
2 30 10 10 15 1.1
i) Calculate Sharpe and rank them(6 marks )
ii) Will the decision change if Treynor?s ratios is used ?( 7 marks)
Level 3 Applying
10
i) Analyse how CML and SML are constructed. (8marks)
Level 4 Analysing
ii) Differentiate between CML and SML. (5marks)
11
i) What is Markowitz model? State its assumptions. (5marks)
Level 1 Remembering
ii) Explain the selection of optimum portfolio. (8marks)
12
Explain the different measures of portfolio performance.
Level 2 Understanding
13
What are the basic assumptions of CAPM? What are the advantages
of adopting CAPM model in the portfolio management?
Level 4 Analysing
14
i) What do you mean by Mutual Fund and explain various types of
mutual funds?(5marks)
Level 1 Remembering
ii) Explain its structure and advantages. (8marks)
PART - C
S.NO QUESTIONS
1
The following three portfolios provide the particulars given below:
Port folio
Average
annual
return
Standard
deviation
Correlation
co-
efficient
A 18 27 0.8
B 14 18 0.6
C 15 8 0.9
Market
13
12
-
Risk free rate of interest 9%
Rank these portfolios suing Sharpe's and Treynor's methods. Compare both the indices.
2
The following information is provided regarding the performance of the fund
namely Birla advantage , Sundaram growth and F&C value for a period of a
six months ending August 2012 the risk free rate of interest is assumed to be
9%.Rank them with the Sharpe index and discuss.
Rp
Standard
deviation
Beta
Birla
Advantage
25.38 4 0.23
Sundaram
Growth
25.11 9.01 0.56
Sun F & C
value
25.01 3.55 0.59
3
i) Explain how the efficient frontier is determined using the Markowitz approach. (4marks)
ii) What are the characteristics of assets that lie on the efficient frontier? (8marks)
iii) What are the strength and weakness of the Markowitz approach? (3marks)
4
Mr. X has owned units of three different mutual funds namely R, S and T. The following
particulars are available to him.
Funds Excess Average
return
Beta
R 7.7 1.02
S 11.3 0.99
T 11.6 1.07
Market 7.8 1.00
i) Calculate the performance using the appropriate measure ( 11 marks )
ii) He wants to dispose anyone of the mutual fund for his personal expenditure. Which
fund should he dispose? (4 marks)
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This post was last modified on 29 February 2020