INSTITUTE OF PUBLIC ENTERPRISE

Shamirpet Campus: Hyderabad-s001 01

POST GRADUATE PROGRAMMES
End Trimester Examinations: October 2O2g

Programme : PGPs \ Trimester. : lV

Subject : Security Analysis and Portfolio Management Time : 2 hours
Code : 23EF403 Max Marks : 30
Note: Answer all questions,
Section -I (6Xl = 6 Marks)
[Link] QUESTION BTL co
Q. 1 Outline any two effects of lnflation in lnvestment decisions for an 1 1
individual investor.
Q.2 Explain the application of sharpe Ratio in performance evaluation of a 2 3
fund.
Q.3 List any two advantages of listing of shares in a stock exchange. 1 1

Q.4 state any two assumptions of capital Asset pricing Theory (cApM) in 1 2
portfolio selection.
Q.5 Discuss the concept of YTM in fixed income securities. 1 1

Q.6 summarize the importance of intrinsic value in security anatysis. 2 1

Section - ll (4X3=12Marks)
[Link] QUESTION BTL co
Q.7a Suppose you have a project that has a 0.7 chance of doubling your 3 1
investment in a year and a 0.3 chance of halving your investment in
a year. calculate the standard deviation and the rate of return on
this investment?
OR
Q. 7b "Money market securities are sometimes preferred aJ cash
3 1
equivalent"- Analyze
Q.8a compare and contrast constant rupee value plan and constant iatio 5 3
plan.
OR
Q.8b Mr. Akram invested in a mutual fund when the NAV was t12.65 per
5 3
unit. 60 days later the asset value per unit of the fund was 112.25. ln
the meantime, Shyam received a cash dividend of t0.50 and a
capital gain distribution of t0.30. Determine the monthlv return.
Q.9a Two portfolios have the following characteristics: Portfolio A- Seturn 4 2
8%o and Beta 0.7; while Portfolio B- Return 7o/o and Beta 1.1; Given a
market return of 10% and risk-free rate of 4o/o, using Jensen alpha
analyse which portfolio haS performed better.

Page 1i2
 OR
Q. eb "When someone refers efficient capital mart<etsJfrey mean that
4 2
security prices fully reflect all available information".-Analyze the
above statement wllllq perspective of tndian stock marketi.
Q. 10a Calculate the NAV of Excellent Fund from the following data: 3 3
size of the fund, {300 crores; face value {10 per unit; the market
value of investment 1360 crores; receivables {6 crores; accrued
income {4 crorgs; Liabilities {2 crores; accrued expenses {1 crore.
OR

Q. 10b The following information is provided regarding the performance of 3 3

three funds. calculate the best-performing fund. The average annual
rate of return and the standard deviation is as follows:
Fund A: R=25.38%, Std. Dev=4; Fund B: R=25.11%, Std Dev
=9.01; Fund C: R=25.01%, Std Dev =3.55. The risk-free rate of
interest is assumed to be 9%.

Section - lll (2X6=12Marks)

[Link] QUESTION BTL co
Q. 11a Describe the essence of fundamental and technical analysis. would 2,5 2
you support an investor using technical analysis as the only basis for
investment decision?
OR
Q. 11b A company has an EPS of t5 for the current year and a DpS of e2. 5 2
The earnings growth rate during the past four years was 4o/o and is
expected to grow al2% a year in the long run. currenfly, it is trading
7 tlmes its earnings. lf the required rate of return is 14%o, estimate the
P/E ratio.
Q. 12a Explain the term investment. Elaborate on different factors to be 2,6 3
considered while investing in financial markets post pandemic in
lndia.
OR

Q. 12b Stocks Alpha and Beta had the following returns over the last 5 6 3
years.
Year 2019 2020 2021 2022 2023
Return of 9 -10 15 17 21
Stock Alpha
(o/o)

Return of 11 -13 19 21 15
Stock Beta
(Yo)

ls it advisable to have a combination of both the stock in a portfolio of

equal proportions and derive the returns and risk of the portfolio
using the above information.

Ptrgc 212
 tr
INSTITUTE OF PUBLIC ENTERPRISE
Shamirpet Campus: Hyderabad-5001 0 1

POST GRADUATE PROGRAMMES

End Trimester Examinations: December 2022

Programme : PGPs Trimester : lV

.

Subject : Security Analysis and Portfolio Management Time : 2 hours

Code : 22EF-6 Max Marks : 30

Note: Answer all questions,

Section - I (6X1 = 6 Marks)

Q,NO QUESTION BTL co*

Q1 Define Portfolio. 2 1

Q.2 Explain P/E Ratio 2 1

Q3 What is YTC ? 2 1

Q4 Distinguish between the Primary market and Secondary Market. 2 1

Q5 What is Jenson's Alpha. 2 1

Q6 Discuss a semi-strong form of market. 2 1

Section No: ll (4X3=12Marks)

ONO QUESTION BTL co

Q. 7a Discuss in brief the Arbitrage Pricing Theory J 2

OR

Q7b Compare Technical analysis and Fundamental analysis. 3 2

Q. 8a ABC company is proposing to sell a S-year bond of Rs.1000 at an 4 2

8o/o rate of interest per annum. The bond amount will be amortized
(repaid) equally over its life. lf an investor has a minimum required
rate of return of 7o/o, what is the bond's present value?
OR

Q. 8b Explain briefly Markowitz's Portfolio Theory. 4 2

Q. 9a The following information is provided regarding the perforrnance of 3 2

two funds. Suggest the best-performing fund. The average annual I

rate of return and beta are as follows.

Fund A: R=0.0879, beta=0.4990; Fund B. R= 0.1347, beta =1 .2493,
I

The risk-free rate of interest is assumed to be 5% I

OR I

Q9b E-pl"r th" [Link]*. of .""iltv nl"*ut l3 I

Page I of2
Q. 10a A portfolio manager invests in five portfolios namely P, Q, R, S, and 4 2
T in the ratio of 30%,20Yo,25o/o, 15%, and 1Ao/o and the respective
returns of the portfolios are 12o/o, 14o/o, -20%, 10%, and 9%.
Calculate the combined oortfolio return.
OR

Q 10b Mr. Amit bought 10 shares of TCS on 1't April 2018 for {30,050. The 4 2
company paid a dividend of {30 per share and the value of the stock
as on 31st March 20'19 was <34,280. Calculate the holding period
yield of the investor.

Section - lll (2X6=12Marks)

[Link] QUESTION BTL co
Q. 11a Discuss in detailed the various types of mutual funds, and,also, b 3
explain various performance evaluation measures.
OR
Q 11b Explain in detail the CAPM model and illustrate it with an example. 6 3

Q 12a AB Ltd. ls expected to pay a dividend of {4.00 at the end of the first 6 3
year, a dividend of 17.00 at the end of the second year, a dividend of
{11.00 at the end of 3'd year, from 4th year onwards, the dividends
are expected to grow at a constant rate o'f [Link] the required rate of
return is 14%, compute the present value of the stock.
OR

Q 12b What is portfolio revision strategy? Explain in detail various portfolio 6 3

revision starategies.

PageZ of 2 ..;
Subject Name A029515-IPE2-Security Analysis and Portfolio Mgmt
Subject Code 20412-A029515
Marks
Section
Questions Questions to be Answered Per
Name
Question
Question
Section I Answer ALL Questions
Label
Section I 1 Q2669010 Primary Market 1
Section I 2 Q2669011 BETA 1
Section I 3 Q2669012 SENSEX 1
Section I 4 Q2669013 APT 1
Section I 5 Q2669014 Mutual Fund 1
Section I 6 Q2669015 Treasury Bills 1
Section II Answer ANY FOUR Questions
Section II 1 Q2669016 Discuss in brief functions of secondary market.
Section II 2 Q2669017 Discuss in brief EIC analysis. 3
Section II 3 Q2669018 Explain in brief CML and SML. 3
Section II 4 Q2669019 Compute beta from the following data. 3
Section II
Section II
Section II
Section II
Section II
Section II
Section II
Section II
Section II
Section II 5 Q2669020 Explain in brief Open ended and closed ended mutual funds. 3
Section II 6 Q2669021 Discuss in brief various types of Debentures. 3
Section II 7 Q2669022 Discuss in brief EMH. 3
Section II 8 Q2669023 How Technical Analysis is used for stock price prediction? 3
Section III Answer ANY TWO Questions
Section III 1 Q2669024 Discuss in detail the Capital Asset Pricing Model. 6
The following information is provided regarding the performance
of the funds namely Birla Advantage, Sundharam Growth and Sun F
& C value for a period of six months ending August 2019. The risk
free rate of interest is assumed to be 5%. Rank them with the help
of Sharpe Index and discuss.
Section III 2 Q2669025 6

Section III 3 Q2669026 Explain in detail the need for portfolio rebalancing. 6
Discuss in detail various investment avenues available for an
Section III 4 Q2669027 6
individual investor.
 INSTITUTE OF PUBLIC ENTERPRISE
Shamirpet Campus : Hyderabad-sOO1 01

POST GRADUATE PROGRAMMES

End Trimester Examinations : Oct 2019

Programme : PGP's Trimes ter : lV

subject : secur:ity Analysis and Portfolio Management Tirne : 2 hours

Code : 19410 Max Marks : 30
Note: Answer all questions,

Section -l Short Notes (6x1=6marks)

a) Security
b) Portfolio
c) NIFTY
d) APT
e) Bar Chart
f) Efficient Frontier

Section -ll The answer should not exceed 200 words (4 x 3 = 12 marks)

Q 2 a) Discuss briefly the role of Capital Markets in an Economy.

OR
b) What are the advantages of listing from the point of view of the company and
investors?

Q 3 a) Differentiate between CML and SML.

OR
b) What is Constant Dollar Plan?

Q 4 a) Discuss briefly the difference between Risk and Return.

b) Mr. X is planning to buy an equity ,n"rJlo,o it for one year and then sett it. The
expected dividend at the end of year 1 is Rs. 7 and the expected sale proceeds
Rs.200 after 1 year. Determine the value of the share to the investor assuming
the discount rate of 15o/o.

Q 5 a) Table below shows the percentage returns on the market, represented by the
BSE Sensex (Sensitivity lndex) and the share of the Jaya lnfo tech Limited for
recent years. Calculate BETA.
Market Jaya lnfo
Year Return (x) tech (v)
1 18.6 23.46
2 -16.5 -36.13
3 63.83 52.64
4 -20.65 -7.29
5 -17.87 -12.95
 OR
b1 Explain the difference between fundamental analysis and technical analysis.

Section: - lll (2x6= 12 marks)

Q 6 a) Explain in detail the CAPM model and illustrate with an example.

OR
b) XYZ and ABC are the two mutual funds XYZ has a sample mean of success 0.13
and fund ABC has a sample mean of success of 0.18, with the riskier fund ABC
having double the beta at 2.0 as fund XYZ. The respective standard deviations
are 15o/o of ABC and 19% of XYZ. The mean return for market index is 0.12,
which the risk-free rate is 8%.
a. Compute the Jensen lndex for each of the funds. What does it indicate?
b. Compute the Treynor index for the funds. lnterpret the results and compare it
to the Jensen lndex.
Compute the Sharpe's lndex for the funds and the market.

Q 7 a) What is investment? Explain the different factors to be considered in investment

decision.
OR
b) From the following information determine the portfolio return and risk with an
investment proposition of 60% and 40o/o respectively.

Year 2016 2017 2018

Stock - X 14% 160/0 20o/o
Stock - Y 12o/o 18% 15o/o
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 INSTITUTE OF PUBLIC ENTERPRISE
Shamirpet Campus : Hyderabad-SO01 01

POST GRADUATE PROGRAMMES

End Trimester Examinations : Octobet 2016

Programme : PGPs Trimester : lV

subject : security Analysis & portfolio Managemerrt rime : 2 hours
Code : 16411 |l/|ax Marks : 30
Note: Answer all questions,
Section -l Short Notes (6x1=6)
Q 1) Answer the following. The answer should not exceed 40 words.

a) Primary Market
b) Preference shares
c) Minimum risk portfolio
d) Tobin's separation theorem
e) Close ended mutualfund
0 Sharpe Ratio

Section -ll Short Essay, each in about 200 words (4x3=121

Q 2 a) Explain the investment decision process. What are the factors to be considered
whi{re making decisions?
(oR)
b) Dividends per share tor XYZ Ltd. are expected to grow at an annual rate of 25%
for 4 more years. After this period of time, dividends should grow at a more
normal rate of 5 o/o. lt the company expects to pay a dividend of Rs. 2 per share
in the nexi year, what is the required rate of return of this share?

Q 3 a) Explain the Efficient Market Hypothesis.

(oR)
b) A company's bonds have a par value of Rs 100, mature in 7 years and carry a
coupon rate of 12 percent payable semi-annually. lf the appropriate discount rite
is 16 percent, what price should the bond command in the market place?

Q 4 a) Describe the Arbitrage Pricing Theory

(oR)
b) Calculate the expected rate of return for each of the following stocks when the
risk free rate is 8% and you expect the market rate to be 17o/o.
Stock Beta
1 1.23
2 1.52
3 0.76
4 0.84
5 0.62
6 1.06
 Q 5 a) Explain the methods of portfolio revision.
(oR)
b) The HDFC Fund, T-Bill and Nifty have had the following returns over the past five

HDFC
Fund T-Bills Nifty
Returns( Returns Returns(
Year o/ol (%l %l
2005 7 5 5
2006 -5 9 -4
2007 13 7 10
2008 11 6 9
2009 15 8 12

Determine HDFC Fund's Alpha and beta coefficient for the S-year period of time.

Section: - fll Essay question, ( x 12 = 121

Qo a) stockA has a beta of 1.20 and stock B has a beta of 0.g. suppose ft=2o/o?nd
Rm = 12o/o.
a) According to the CAPM, what are the expected returns for each stock?
b) What is the expected return of an equally weighted portfolio of these two stocks?
c) What is the beta of an equally weighted portfolio of these two stocks?
d) How can you use your answer to part (c) to answer part (b) ?

(oR)

b) Assume the risk - free rate is 4o/[Link] are a financial advisor and your client has
decided to invest in exactly one of two risk funds, A and B. She comes to you for advice.
Whichever fund you recommend she will combine it with the risk-free aiset. Expected
returnsareRn-13o/oandRs=1lo/[Link]=20o/oandoa31%.Without
knowing your client's tolerance for risk, which fund would you recommend?
 INSTITUTE OF PUBLIC ENTERPRISE
Shamirpet Campus : Hyderabad-5001 01

\. POST GRADUATE PROGRAMMES

End Trimester Examinations : October 2017
t
I Programme : PGPs Trimester : lV
t Subject : Security Analysis and portfolio Mgt Time : 2 hours
Gode : 17418 Max Marks : 30
L
Note: Answer all questions,
Section -l Short Notes (6x1=6)
Q 1) Answer the following. The answer shourd not exceed 40 words

a) lnvestment Vs. Speculation

b) Primary Market Vs Secondary Market
c) FundamentalAnalysis
d) Semi Strong form of Market
e) APT
0 Jensen's Alpha

Section -ll Short Essay, each in about 200 words (4 x 3 = 12)

Q 2 a) Explain the investm-nt procurr.
(oR)
b) Describe the functions of security markets.

Q 3 a) [Link] Company is expected to pay a dividend in year .l of Rs.1 .20, a

dividend in year 2 of Rs.1.50, and a dividend in year g ot Ri.Z 00. After year 3,
dividends are expected to grow at the rate of 10% per year. An appropriate
required return for the stock is 14%. what is the stock worth ioday?
(oR)
b) Describe the efficient market hypothesis.

Q 4 a) Describe the meaning and objectives of portfolio. ls it possible to reduce the risk
of a portfolio to zero?
(oR)
b) Differentiate between Constant Dollar Value Plan and Constant Ratio plan.

Q 5 a) An analyst wants to evaluate Portfolio X, consisting entirely of common stocks,

using both the Treynor and Sharpe measures. The following table provides the
average annual rate of return for Portfolio X, the market portfolio (S&P 500) and
T-bills during the past B years.
Avg. Return Std. Dev. Beta

Portfolio X 10%o 18o/o 0.6

s&P 500 12o/o 13%
T-bills 6To
 i. Calculate both the Treynor and Sharpe measure for Portfolio X and the
market. Did Portfolio X overperform or underperform based on each of
the measures?
Why do we find conflicting results using the two measures?
(oR)
b) Explain the types of mutual funds.

Section: - lll Essay question, (1x12=121

Q 6 a) Describe the measures of performance of mutual funds.
(oR)
b) The following table shows the returns on the market, a risk-free asset and risky
asset j in 4 possible states of realization.

State Probability Asset j's Return Risk-free asset Market Return

(Ri) Return (Rm)
A 0.3 0o/o 6% 5o/o
B 0.1 -30% 6% -15o/o
c o.4 +20oh 60/o 15o/o
D 0.2 +50oh 60/o 20o/o

Calculate (a) Market expected return, (b) Variance of market return, (c) Asset j's expected
return, (d) Covariance of Asset j and the market, (e) Write down the security market line, (f)
What is the expected return of asset j as calculated from the security market line equation in
(e)?