Prelim: Investment analysis and portfolio management
Q1. Solve any 2 (15 marks)
- What are advantages of investing in a mutual fund?
- How can one raise money from primary market?
- What is yield curve, Repo and reverse Repo, Margin Trading.
Q2. You are a portfolio manager and are approached by a middle aged man with an investable surplus of Rs 50 lacs. However he requires a sum of Rs 10 lacs after 3 years for his son’s higher education and Rs 25 lacs after 5 years for his daughter`s marriage. He seems financially well off and can take a risk of around 20% of his portfolio. Help him design an appropriate portfolio to suit his immediate 2 needs. Also help him in tax planning. (15 marks)
Q3. Solve any 2 (15 marks)
- Who do you differentiate between technical and fundamental analysis
- What are the roles of SEBI in investor protection?
- What are the approaches in portfolio management?
Q4. Solve any 2 (15 marks)
- Evaluate the following portfolios and give your suggestions
Market Return is 12% and risk free rate is 8%
|Portfolio A||Portfolio B||Portfolio C|
- Arun is contemplating to invest in any one of the two opportunities. Invest Rs 50,000 every year at 10% for 5 years or invest Rs 35,000 at 12% for 5 years. Which one is a better investment.
- Radha purchased 100 shares of Shyam Ltd on Jan 1, 2012 at Rs 230 per share. She paid a brokerage of 1%. Shyam gave a bonus of 1:2 on March 31st, 2012. There were 2 dividends received 10% each on June 1,2012 and June 1, 2013. Radha sold all the shares on June 30, 2013 at Rs 243 per share and paid 1% brokerage. What is her holding period return.
Q5. Solve any 2 (15 marks)
- The following information about Alpha Ltd is given
|5% Preference shares||2,00,000|
Tax rate-30% and MPS is Rs 22. Compute the following
- Net profit ratio
- Return on equity
- Interest coverage ratio
- Book value.
- A GOI bond with coupon 10% of FV 1000 is available at a discount of 12%. The bond matures in 20 years. Find the YTM. A similar bond is available at a 10% premium however the coupon is 15%. Which is a better bond to invest.
- Information about 2 securities is available. Evaluate both the securities for risk and return.
Probability Return % of X Return % of Y
0.2 12 14
0.3 11 15
0.1 -2 -3
0.4 10 8
For any doubts, contact :
Prof Vipin Saboo 9820779873