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    Security Analysis and Portfolio Management

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    Security Analysis and Portfolio Management

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    gagan0084
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    1. Security Analysis and Portfolio Management

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    Security Analysis and Portfolio Management

    Uploaded by

    gagan0084

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    © All Rights Reserved
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    of 2

    EXECUTIVE MASTER IN BUSINESS ADMINISTRATION

    SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT


    Maximum Marks: 70 Time: 2 Hours
    Section – A
    Objective type (1-10) (Answer all questions. Each question carries 1 mark)
    1. The stock is
    a. Made of all small units of equal called shares c. Expressed in terms of money
    b. Expressed in terms of number of shares d. Fully paid-up and partly paid-up shares
    2. Which one of the following is not a money market security?
    a. Treasury bills c. National savings certificate
    b. Certificate of deposit d. Commercial paper
    3. The common practice in the traditional approach is to
    a. Evaluate the entire stock market
    b. Maximize the expected return for a given level of risk
    c. Evaluate the entire financial plan of the individual
    d. Select the portfolios
    4. Diversification reduces
    a. Interest rate risk b. Market risk c. Unique risk d. Inflation risk
    5. Markowitz approach has roots in
    a. Good portfolio management c. Proper entry and exit in the market
    b. Estimation of stock return d. Analyzing the risk and return related to stocks
    6. The relationship between potential unsystematic risk and reward is given by
    a. Excess return to beta ratio c. Excess return to security’s standard deviation ratio
    b. Excess return to security’s variances ratio d. Excess return to beta square ratio
    7. The security market line’s first point is a risk-free with beta of zero and the second point on the line is one
    with a beta of
    a. 1 b. 1.5 c. 2.0 d. 0.5
    8. The Sharpe index assigns the high value to funds that have
    a. Low standard deviations c. Higher returns
    b. Higher risk adjusted returns d. Higher risk premium
    9. The market return is 20% and the riskless rate of return is 7%. The funds beta coefficient is 1.2. What is its
    expected return?
    a. 2.5 b. 22.6 c. 31.0 d. 24.8
    10. The NSE-Nifty index fund consists of
    a. The stocks of high market capitalization in NSE
    b. Blue-chip companies’ stocks of the index
    c. All the stocks of the Nifty index
    d. Consists 90% of the stocks of the index leaving stocks of lesser importance

    Section-B
    Answer in 300 to 400 words. (Brief answer type). (Answer any 5 questions. Each question carries 6 marks)
    11. What is Investment?
    12. Explain the subsidiary objectives of investment.
    13. Write a note on SIP.
    14. What is beta? Is it a better measure of risk than the standard deviation?
    15. What are the various forms of post office investments?
    16. What are the statistical tools used to measure the risk of the securities return? Explain
    17. What are the basic assumptions of CAPM?
    18. What is meant by levered portfolio? How is it constructed?
    19. What is meant by mutual funds?
    20. Assume that the risk-free rate of return is 7 per cent. The market portfolio has an expected return of 14 per cent
    and a standard deviation of return of 25 per cent. Under equilibrium conditions as described by CAPM, what
    would be the expected return for a portfolio having no unsystematic risk and 20 per cent standard deviation of
    return?

    Section-C
    Answer in 600 to 700 words. (Long answer type). (Answer any 2 questions. Each question carries 15 marks)
    21. Investment and speculation are somewhat different and yet similar in certain respects. Explain.
    22. A stock casting Rs.50 pays no dividend. The possible prices of the stock at the end of year and their
    probabilities are given below.
    End of year price Probability
    60 0.1
    65 0.2
    70 0.4
    75 0.2
    80 0.1
    a. Find out the expected return
    b. Find out the slandered deviation of the returns.
    23. The following table provides information regarding portfolio return and risk.
    Portfolio Expected return E (R) o
    1 10 4
    2 12 7
    3 13 5
    4 16 12
    5 20 14
    a. The Treasury bill rate in 5%. Which portfolio is the best?
    b. Would it be possible to earn 12% return o of 4%?
    c. If o is 12%, what would be the expected return?
    24. How does a strategy aid the investor to invest in a defensive portfolio?

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