Get fully
solved assignments at nominal price of Rs.100 each.
08627023490
Summer-2013
Master of
Business Administration- MBA Semester 4
MF0010–Security
Analysis and Portfolio Management-4 Credits
(Book ID:
1759)
Assignment
(60 Marks)
Note: Answer
all questions (with 300 to 400 words each) must be written within 6-8 pages.
Each Question carries 10 marks 6 X 10=60
Q1. Explain the characteristics of
investment. Differentiate between investment and speculation.
Answer. Characteristics:-
1) High
Dividends (or high rental for properties) - must be at least 10% yield per year
2) Good
long-term growth prospects (good fundamentals) - must at least beat the
country's inflation
3) On
technical analysis point of view, it would be best if that particular
investment is near its bottom (near support line)
4) Flexible
exit point if things didn’t go your way (i always put a stop-loss on most of my
investments) - properties would be hard to satisfy this requirement since the
process of selling a property may takes ages!
Q2.What do you understand by risk and
measurement of risk? Explain the factors that affect risk.
Answer. Risk is the potential of loss (an
undesirable outcome, however not necessarily so) resulting from a given action,
activity and/or inaction. The notion implies that a choice having an influence
on the outcome sometimes exists (or existed). Potential losses themselves may
also be called "risks".
Any human endeavor carries some risk, but some are much riskier than others.
Q3.Compare and contrast the
fundamental and technical analysis.
Answer. Fundamental analysis is a method of evaluating securities
by attempting to measure the intrinsic value of a stock. Fundamental analysts
study everything from the overall economy and industry conditions to the
financial condition and management of companies.
Technical analysis is the evaluation of securities by
means of studying statistics generated by market activity, such as past prices
and volume. Technical analysts do not attempt to measure a security's intrinsic
value but instead use stock charts to identify patterns and trends that may
suggest what a stock will do in the future.
Q4. Write the assumptions of CAPM.
Explain the limitations of CAPM.(Assumptions of CAPM 5 marks; Limitations of
CAPM 5 marks)10 marks
Answer. Assumptions:-
1. All
investors focus on a single holding period, and they seek to maximize the
expected utility of their terminal wealth by choosing among alternative
portfolios on the basis of each portfolio's expected return and standard
deviation.
2. All
investors can borrow or lend an unlimited amount at a given risk-free rate of
interest and there are no restrictions on short sales of any assets.
3. All
investors have identical estimated of the expected returns, variances, and
covariance’s among all assets (that is, investors have homogeneous expectations).
Q5. Write about emerging markets.
Explain the risks involved in international investing.
Answer. Emerging markets are nations with social or business
activity in the process of rapid growth and industrialization. The economies of
China and India are considered to be the largest. According to the Economist
many people find the term outdated, but no new term has yet to gain much
traction.
The
defining features of emerging markets
include at least the following factors. The markets are actively growing under
governmental policies that favor a capitalist-style economy. Governments are
predictably stable but not necessarily democratic. Substantial future growth is
guaranteed because their internal resources and infrastructure still remain
unexploited and
Q6.What is economy analysis? Explain
the factors to be considered in economy analysis.
Answer. A systematic approach to determining
the optimum use of scarce resources, involving comparison of two or more
alternatives in achieving a specific objective under the given assumptions and
constraints.
Economic analysis takes into account the opportunity
costs of resources employed and attempts to measure in monetary terms the
private and social costs and benefits of a project to the community or economy.
You may
recognize some of these economic reports, such as the unemployment numbers,
which are well publicized. Others, like housing starts, receive little
coverage. However, each
Get fully
solved assignments at nominal price of Rs.150 each.
08627023490
No comments:
Post a Comment