Rajasthan Technical University 2009 M.B.A Finance Security Analysis & Portfolio Management (Major Elective) - Question Paper

Rajasthan tech. University
M.B.A. three sem (Main/Back)
Year 2009

Security Analysis & Portfolio Management (Major Elective)

Roll No.___

Total No. of Questions : 7]    . [Total No. of Pages : 2

[2129]

M.B.A. Illrd Semester (Main/Back) Examination - 2009 Finance Security Analysis & Portfolio Management (Major Elective) 3M6303

Time : 3 Hours    Maximum Marks : 70

Min. Passing Marks : 28

Instructions to Candidates:

1)    The question paper is divided in two sections.

2)    There are sections A & B. Section A contains 6 questions out of which the candidate is required to attempt any 4 questions. Section B contains short case study/application based 1 question which is compulsory.

3)    All questions are carrying equal marks.

Section - A

i

1.    What is investment? How is it different from speculation? What qualities are required for successful investment?    (4+4+6=14)

2.    Explain the following

a)    Trading and settlement procedure

b)    Capital market line.

c)    Listing of securities.

d)    Demat.    (4+4+3+3=14)

3.    Differentiate between the fol lowing

a)    Systematic Risk and Unsystematic Risk.

b)    Portfolio Risk and Portfolio Return.

c)    Industry Analysis and company Analysis.

d)    Investment and saving.    (4+3+4+3

3M6303/3,400    (1)    [Contd..

4. Consider the data for a sample of 4 Shares tor two years, me UilSC ytcu anu jvtu i.

Share	Price in base year Rs.	Price in year t Rs.	Number of out standing shares in millions
A	40	30	3
B	60	75	12
C	20	40	6
D	75	90	5

What is the price weighted index, equal weighted index, and value weighted index for year t?    (14)

5.    a) What is portfolio management? How does diversification reduces risks?

(3+4=7)

b) A security has a standard deviation of 4%. The correlation coefficient of the security with the market is 0.8 and market standard deviation is 3.5%. The return on risk free securities is 12% and from the market portfolio is 16%. What is the required rate of return of portfolio as per CAPM model? (7)

6.    Discuss the role of SEBI in regulating Indian capital market and explain the guidelines issued by SEBI on Book-Building.    (7+7=14)

7.    The following table gives an analysts expected return on two stocks for particular market returns:

Market Return Aggressive stock Defensive stock 6% 2% 8% 20% 30% 16% a) What are the betas of the two stocks?

b)    What is the expected return on each stock if the market return is equally likely to be 6% or 20%?

c)    If the risk-free rate is 7% and the market return is equally likely to be 6% or 20% what is SML?

d)    What are the alphas of the two stocks?    (3V2^X4=14)

3 M6303    (2)

Attachment: rajasthan-technical-university-2009-m-b-a-finance-36682-1.png rajasthan-technical-university-2009-m-b-a-finance-36682-2.png

Earning:   Approval pending.