Sixth Semester B

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SIXTH SEMESTER B.B.A. DEGREE EXAMINATIONS


JAN/FEB 2024
(CBCS NEP SCHEME)
PAPER : SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT
Time: 2 hours] [Max. Marks:60
SECTION – I
Instructions to students
1. The students should legibly write section number along with question numbers.
2. The answers without section number and question numbers will not be valued.
3. The questions numbers should be legibly written within the margin only.

I. Select the most appropriate answer from the options provided, ONE mark each.
10x1=10
1. Speculator is a person _______.
a. Who evaluate performance of the company
b. Who uses his own funds only
c. Who is willing to take risk for short term gain
d. None of the above
2. Commercial papers are issued for a maximum period of
a. 7 days
b. 15 days
c. 1 Month
d. 3 Months
3. Risk Arises from various source such as
a. Market Risk
b. Competition Risk
c. International Risk
d. All of the above
4. The statistical tool used to measure the company risk is
a. Mean
b. Standard deviation
c. Mode
d. Co-Variance
5. Which is not the part of fundamental analysis
a. Company analysis
b. Industry analysis
c. Point and figure analysis
d. Economic analysis
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6. Dow theory is associated with


a. Risk and Return
b. Valuation of Bonds
c. Technical Analysis
d. None of the above.
7. Stock L gives Return of 12% and 18% for 2022,2023 respectively what is the Expected
Return of Stock L
a. 30%
b. 15%
c. 18%
d. 6%
8. If the Alpha value of stock is 1.0 and the Beta Value of stock is 0.8 then the value of stock
as per Jenson measure is
a. 1.17
b. 1.13
c. 1.25
d. 0
9. The Risk free rate of return of a stock is 9% and Return of market is 15%, Return of stock is
10% then the Risk premium is equal to
a. 6%
b. 9%
c. 5%
d. 4%
10. The Return of stock A is 0.33 and the Beta Value is 1.7, Standard deviation value is 0.50 if
the Risk free rate is 9% what is the Return as per SML:
a. 15.8%
b. 19%
c. 20%
d. 16%
SECTION -II
II. Answer any FIVE of the following,THREE marks each. 5X3=15
1. What are the Elements of Good Investment.
2. Explain the Concept of Company Analysis?
3. Write note on Diversification?
4. Calculate the Returns from the following data
Year 2024 2023 2022 2021 2020
Return(% 17 18 19 20 -5
)
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5. Compute co-efficient of variation of project A and project B. if standard deviation of project


A -5000, and project B- 3400. Mean is 10,000.

6. Calculate the Risk of the following investment


Cash Inflow Amount Probability
year
1 20,000 0.4
2 40,000 0.3
3 60,000 0.3

7. The Expected Risk free return of the stock is 15%, The Beta Coefficient value is 1. The
market return for the stock is 21%. Calculate value of the share as per CAPM Approach
8. The Average annual return of the share A is 18% and the Standard Deviation of portfolio is
27 if the standard deviation of market is 12 and correlation coefficient is 0.8 calculate the
value of share as per Treynor’s method.

Section III
III. Answer any THREE of the following, FIVE marks each: 3X5=15
1. Differentiate between Investor and Speculator.
2. Write a detailed note on fundamental analysis.
3. From the following table find the arbitrary portfolio

Stocks Return Changes


A 20% 0.2
B 15% 0.025
C 12% 0.225
4. A portfolio consists of 3 securities 1, 2 & 3 is given. The proportions of these
securities are W1=0.3, W2=0.5 & W3=0.2 respectively. The Standard
deviations of returns on these securities in percentage are σ1=6, σ2=9 & σ3=10
respectively. The correlation coefficient among r12 = 0.4, r13 =0.6 & r23 =
0.7.Calculate portfolio risk using Markowitz Model
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5. Alpha and Beta co-efficient for five stocks are given below
Stocks Alpha Beta
Craft High Corp 1.0 0.8
Crown Corp 1.35 1.15
Courtesy Corp 1.18 1.25
Cute Corp 1.25 0.95
Cure Corp 1.5 1.4
Rank 5 stocks using Jenson Performance measure

SECTION IV
IV. Answer the following questions. TEN marks each. 2X 10= 20
1. A. What do you mean by Investment? Write a detailed note on Investment process
B. The returns on securities A&B are given below.

Probability Security A Security B


0.5 4 0
0.4 2 3
0.1 0 3
Calculate Risk and Return of both the securities
2. A. Differentiate between Technical and Fundamental Analysis
B. The following three portfolios provide the particulars given below
Portfoli Average Annual Return Standard Deviation Beta Values
o

A 18 27 1.8

B 14 18 0.9

C 15 8 0.6

Market 13 12 -
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Risk free rate of interest is 9.


(a) Rank these portfolios using Sharpe’s and Treynor’s Methods

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