[This question paper contains 4 printed pages.] Sr. No. of Question Paper : Unique Paper Code : Name of the Paper Name of the Course : Semester : Duration ‘Maximum Marks 3 Your Roll No. 8434 101533 Investment Analysis and Portfolio Management (503, F-1) Bachelor of Business Studies (BBS), 2017 v : 3Hours 75 Instructions for Candidates Write your Roll No. on the top immediately on receipt of this question paper. 2. Attempt any five questions and answer all parts of each question together. 3. . All questions cary equal marks. 4, Show all rough work on the answer sheet and state your assumptions if any. 1. (@) The risk free rate is 8%, expected return on market portfolio is 15%. Are the following securities fairly priced according to CAPM? P.T.O.‘Security Expected return (%) Beta P 30 12 (b) Briefly compare the Markowitz and Sharpe Single index model for calculation of portfolio risk and return. (c) Explain briefly the weak form of the efficient market hypothesis with one test for the same. 2. (a) Given below are excerpts from the accounts for ABC Ltd. for the Year ending 31 March 2016. Calculate 3 relevant ratios for a debt holder. EBIT 650 Assets 7000 Interest ‘150 Current Liabilities 450 Taxes -200 8% Debentures (due 5 years) 1250 Dividend 50-10% Debenture (due th 5 years) 500 Equity 4500 Retafned Earning 300 (b) Draw and label a diagram to show the efficient frontier. Show a feasible, infeasible, and inefficient portfolio as. A, B and C respectively. (© Briefly explain why various debt issues by the same ’ company need not have the same rating. 8434 3 3. (a) XYZ Ltd has a 15% debenture maturing in 2 years available for Rs. 108. It is callable after 1 year at Rs. 106. Par value is Rs. 100. Calculate current yield, yield to call and yield to maturity. (0) What is thé difference between investing and speculating. Is it possible to use the same security for investment and speculation? (©) Distinguish between the capital market line and the security market line with the help of diagrams. 4. (a) A company paid dividend of Rs. 2.00 in the immediately preceding year. Dividends are expected to grow at 15% for 2 years and then at 10% for ever. What is the fair price of the share today if discount rate is 12%? (b) Explain the primary secondary and minor movements in Dow theory. be used for portfolio. 5. (a) What are the assumpti (b) Calculate duration for a 3 100 offering 8% coupon, if the discount rate is. P.T.O.8434 4 (c) Which of the yield curve theories can explain a downward sloping yield curve? 6. (a) Rank the following using Sharpe and Treynor ratios. Did they do better than the market? "T Return % | Standard deviation” [ Beta ‘Fund A 1S 1S 07 Fund B = ig Ey 14 + | Market Tndex 2 15 Risk fice Asset 6 (b) What are the advantages and disadvantages of a systematic investment plan for portfolio management? (©) Di inguish between leading and lagging indicators in economy analysis risk with 2 examples of each. (200)