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Investment Risk & Portfolio Analysis

This document contains an assignment on security analysis and portfolio management. It includes 4 questions in Section A regarding investment risk and types, distinguishing financial and economic meanings of investment, investment avenues in India, stock trading systems and reforms, and Indian capital market structure. It also asks about mutual funds, their types and concepts like loads and NAV. Section B provides a case study on expected returns and risk of combinations of two stocks, A and B, with given expected returns, standard deviations, and correlation, and asks the expected return and risk for various combinations. It concludes with a case question on the expected return and risk if the correlation between two stocks is negative 0.67 and they are held in proportions of 60% and 40%.

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Dhruv Joshi
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261 views3 pages

Investment Risk & Portfolio Analysis

This document contains an assignment on security analysis and portfolio management. It includes 4 questions in Section A regarding investment risk and types, distinguishing financial and economic meanings of investment, investment avenues in India, stock trading systems and reforms, and Indian capital market structure. It also asks about mutual funds, their types and concepts like loads and NAV. Section B provides a case study on expected returns and risk of combinations of two stocks, A and B, with given expected returns, standard deviations, and correlation, and asks the expected return and risk for various combinations. It concludes with a case question on the expected return and risk if the correlation between two stocks is negative 0.67 and they are held in proportions of 60% and 40%.

Uploaded by

Dhruv Joshi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

FM03

Security Analysis and Portfolio Management


(For CNM Cases)

Assignment I
Assignment Code: 2016FM03A1
30th April 2016

Last Date of Submission:

Attempt all the questions. All the questions are compulsory and carry equal
marks.

Section-A
1.

of

a.
the

No investment is risk free. In view of this statement, discuss


meaning and
types of investment-risk. Can this be eliminated or minimized,

how?
b.
Distinguish between the financial and economic meaning
investment.
Describe the various stages of investment.

2.
Discuss the features of investment avenues available in India.
Categorize them into tax
saving and non-tax saving avenues and bring
out the main features of each avenues.
3.
a.
Discuss the trading system in stock exchanges in India.
Mention some of the
recent reforms in the trading system.
b.
Explain the institutional structure in Indian capital market.
4.
a.
Explain the benefit of investment in mutual funds. What are
various types of
mutual funds schemes? What are loads and NAV in mutual
funds?
b.
Use closing price data of June 2013 (from June 1 till June
30) of Sensex and
Infosys Ltd. calculate beta of Infosys Ltd.
Visit [Link] for closing
price data.
Section-B
Case Study
The following data is offered on two stocks A and B:

Stock
deviation

Expected return

0.15

0.30

0.10

0.20

Standard

The correlation between the two stocks is 0.85


Determine the expected return and risk on the following combination
of these two
stocks:
Combinations
B

% of Stock A

70

30

II

50

50

III

40

60

IV

10

90

% of Stock

Case Question:
What will be your conclusion if the correlation between two stocks is
negative 0.67 and they are held in the proportion of 60% and 40%
respectively?

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