FIN301-Security Analysis and Portfolio Management

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Master of Business Administration - MBA Semester 3

FIN301-Security Analysis and Portfolio Management

Assignment (60 Marks)

Note: Answer all questions must be written within 300 to 400 words each. Each Question carries 10 marks 6 X 10=60

Q.1. Elucidate the implications of Efficient Market Hypothesis EMH for security analysis and portfolio management.  10

1. Implications for active and passive investment   5     

2. Implications for investors and companies 5 

Answer.

1. Implications for active and passive investment        

Proponents of EMH often advocate passive as opposed to active investment strategies. Active management is the art of stock-picking and market-timing. The policy of passive investors is to buy and hold a broad-based market

Q2.

Calculate Risk of Portfolio

Answer. The expected return of the portfolio

E(Rp) is   E(RP) = x1R1 + x2E(R2)

Q3. Explain the business cycle and leading coincidental & lagging indicators. Analyze the issues in fundamental analysis.   

● Explanation of business cycle-leading coincidental and lagging indicator

● Analysis and explanation of the issues in fundamental analysis all the four points 

Answer. Explanation of the business cycle and leading coincidental & lagging indicators:

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SET-II

Q1.

1. Explain the meaning of Risk Diversification.

2. How do we measure Portfolio Risk?

1. Explain Risk Diversification 5

2. Measurement of Portfolio Risk 5

Answer. Risk Diversification:-

1. Diversification is a risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio constructed of different kinds of

Q2. Explain the Meaning and Benefits of Mutual Fund.

● Explain the Meaning of Mutual Fund

● Elucidate the various Benefits of Mutual Funds

Answer. A mutual fund is a type of financial intermediary that pools funds of investors with similar investment objectives

Q3.

This distribution of returns for share P and the market portfolio M is given above. Calculate the Expected Return of Security P and the market portfolio, the covariance between the market portfolio and security P and beta for the security.

● Calculate

1. Expected Return of Security P and the market portfolio,

2. Covariance between the market portfolio and security P

3. Beta for the security. 5+3+2=10

Answer.

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