Friday, April 25, 2014

Dibrugarh University - Security Analysis and Portfolio Management 2013

2013 (Old Course)
Full Marks: 70
Time: 3 Hours

1. (a) “Investment is nothing but risk taking.” Do you agree to the statement? Justify your answer with examples.                           14
(b) How would you differentiate Risk from Uncertainty? Do you think that risk can be avoided? Justify.                  6+8=14
2. (a) Discuss the different fundamental analysis that you would like to do before construction of a portfolio.     14
(b) Critically examine the importance of Efficient Market Hypothesis.                     14

3. (a) Discuss the need and significance of diversification in a portfolio construction.                        14
(b) The equity of P and Q have expected returns of 15% and 20% and the standard deviations are 20% and 40% respectively. The coefficient of correlation of these two securities is 0.36.                            7x2=14
(i) What is the expected  return and standard deviation of portfolio consisting of 40% of P and 60% of Q?
(ii) What is the expected return and standard deviation of portfolio consisting of 60% of P and 40% of Q?
4. (a) Write notes on Sharpe’s and Treynor’s Performance Evaluation Models.                   7+7=14
(b) Discuss Jensen’s Differential Return model in detail.                               14
5. (a) Define Options. Explain the different types of Options. Discuss the usage of options.                          2+6+6=14
(b) What is future contract? Distinguish between future and forward contract. Explain the different types of margin in future contract.                                                2+6+6=14