Name:

Enrolment No:
Odd Semester End Term Examination, December 2023
Faculty of Engineering, SIT
Department of Data Science & Engineering
B.Tech. Data Science & Engineering
Course Code: DS4154 Course: Financial Market Analytics [PE3] Semester: VII
Time: 3 hrs. Max. Marks: 80
Instructions: All questions are compulsory.
Missing data, if any, may be assumed suitably.
Calculator is allowed.
SECTION A
S.No. Marks CO
Which of the following is a characteristic of the capital market?
a. High liquidity
Q A1 b. Short-term focus 2 CO1
c. Trading of money market instruments
d. Focus on securities with maturities over one year
What does the term "breakout" refer to in technical analysis?
a. A sudden market crash
Q A2 b. A significant economic event 2 CO2
c. A breach of a key price level
d. A change in interest rates
In a market that adheres to the semi-strong form of the Efficient Market Hypothesis
Q A3 (EMH), all publicly available information, including historical price and volume data, 2 CO3
is already reflected in the current stock prices, it is true or false.
What does the Earnings to Price Ratio (E/P Ratio) represent?
a. The company's market capitalization
Q A4 b. The company's earnings relative to its stock price 2 CO4
c. The company's debt-to-equity ratio
d. The company's revenue growth rate
According to Markowitz's Modern Portfolio Theory, the risk of a portfolio is solely
Q A5 2 CO5
determined by the individual risks of its constituent assets, it is true or false.
SECTION B
How is relative strength calculated in the context of stock market analysis? Stock A
Q B1 has a 6-month relative strength of 1.2 compared to Stock B. What does this indicate 6 CO2
about the performance of Stock A relative to Stock B?
What is the Efficient Market Hypothesis (EMH), and what are its key assumptions?
Assume a stock's current market price is $50, and according to the weak form of the
Q B2 EMH, past stock prices provide no information about future prices. If the stock had a 8 CO3
sharp increase in price over the last month, what does the weak form suggest about
the stock's future price movement?
Q B3 Company ABC has total assets of $500,000, total liabilities of $200,000, and 8 CO4

1
 shareholders' equity of $300,000. Calculate the company's debt-to-equity ratio.
Consider a stock with a beta of 1.2 to the market factor and a beta of 0.8 to the
interest rate factor. If the expected return of the market factor is 8% and the risk-free
Q B4 8 CO5
rate is 3%, calculate the expected return of the stock according to the Two-Factor
Model.
SECTION C
A stock has closing prices for the past 20 days: 60, 61, 59, 58, 62, 63, 65, 66, 64, 63,
Q C1 62, 64, 66, 67, 68, 70, 72, 71, 70, 68. Calculate the exponential moving average 10 CO2
(EMA) with a smoothing factor of 0.2.
A company just paid a dividend of $2.00 per share, and dividends are expected to
Q C2 grow at a constant rate of 4% per year. If the required rate of return is 10%, what is 10 CO4
the current value of the stock according to the Dividend Discount Model?
SECTION D
A group of analysts receives confidential information about an upcoming merger that
is not yet known to the public. If the stock prices of the companies involved have
Q D1 10 CO3
already adjusted to this information, how would this scenario be consistent with the
strong form of the efficient market hypothesis?
In a portfolio with two securities:
• Security A has a beta of 1.2 and contributes 40% to the portfolio.
Q D2 • Security B has a beta of 0.8 and contributes 60% to the portfolio. 10 CO5
The expected return of the market index is 10%. Calculate the expected return of the
portfolio using the Single Index Model