Bachelor of Management Studies (B.M.S.) SEM V 2022 2023 Dec 2023 S FINANCE INVESTMENT ANALYSIS PORTFOLIO MANAGEMENT Question Paper - Mumbai University | munotes

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Questions asked in this paper

(2) Figures to the right indicate marks allocated to each question

Q1 (A) Select the right option and rewrite the sentence. (Any 8) 8 marks
- i. Markowitz approach has roots in
- a. Analysing risk and return related to stocks
- b. Estimation of stock return
- c. Proper entry and exit in the market li. refers to the risk which emerges out of controlled and known variables that are industry or security specific
- a. unsystematic risk
- b. beta
- c. standard deviation
- d. systematic risk ili. measures the amount of systematic risk a security has relative to the
- a. Beta
- b. Range
- c. Variance
- d. Standard Deviation
- iv. portfolio manager has to assess the performance of portfolio over a period of
- a. performance evaluation
- b. portfolio revision
- c. portfolio execution
- d. portfolio diversification
- a. systematic risk and beta
- b. unsystematic risk and beta
- c. systematic risk
- d. unsystematic risk Vi. is the last step in process of portfolio management
- a. portfolio evaluation
- b. portfolio performance
- d. selection of stocks
- vii. model is a model that describe the relationship between systematic risk and expected return for assets, particularly stocks If an asset's expected return plots above the security market line, the
- a. under -priced
- b. overpriced
- c. fairly priced
- d. under-priced with unique risk
- ix. portfolio manger monitor and review scripts according to market condition
- a. portfolio revision
- b. portfolio evaluation
- c. portfolio execution
- d. portfolio diversification applies to debt investment
- b. currency risk
- c. market risk
- d. legal risk
Q1 (B) Give True or False: (Any 7) 7 marks
- i. Market risk is the risk of investment declining in value of portfolio li. Portfolio evaluation refers to the evaluation of the revision of the portfolio uli. to Capital market line, the expected return of any efficient portfolio is a function of total risk
- iv. Credit risk is the risk of loss from reinvesting principal or income at a lower
- v. The minimum maturity of Treasury bill is 28 days and state government can issue Gilt-edge Securities vil. Security Market Line graphs define efficient portfolio common stock would have a beta equal to zero price-priced stock will plot on below the security market line
- x. Balance or hybrid scheme of mutual funds invest in both fixed income and
Q2 (A) What is investment? Explain the process of investment? 8 marks
- (B) Compare Investment, Speculation and Gambling. 7
Q2 You are a Portfolio Manager Consultant practicing as freelancer. Mr. Arpit approached you for his investment planning. His age is 65 years with investible funds of Rs. 2 Crores He needs guidance in respect of following area. Explain in brief What are the investment avenues available to him which will give a suitable return with maximum return?
- ii. What are the various types of risks? 15
Q3 (A) Calculate Beta for Apple Ltd. 8 marks
Q3 (B) Mr Mahesh has a portfolio of two securities with 50% investments in security M and 50 % investment in security N. The characteristics of return under three different situations with different probability for the two securities and the portfolio are given Calculate the expected return and standard deviation of return on both the stocks
Q3 Following is the information about shares of A Ltd. and B Ltd. in various economic conditions. Give answers for the questions given below
- a. Which company has more risk to invest?
- b. Will your decision change if probabilities are 0.4 respectively? What is portfolio management? Explain portfolio management process. (8 Marks)
- (B) What is technical analysis? Explain the different types of charting techniques
Q4 Following is the Balance Sheet of Music Ltd as on 31 March 2022 (Face Value Rs. 10 each) Fixed assets 10,00,000
- a) Net operating profit before tax is Rs 2,80,000
- b) Assume Tax Rate at 50% li. Return on Capital Employed ili. Return on shareholder’s Fund Also advise to the Investor, which is good for Investing. (15 Marks)
Q5 (A) The information for three portfolios is given below: Compare these portfolios on performance using Sharpe and Treynor Measures. Risk free rate of return is 8%. (8 Marks) 5.(B) The Expected return and Beta factor of three securities are as follows: If the risk-free rate is 7% and market return are 13%. Calculate returns for each security under CAPM. (7 Marks)
Q5 Give Short Notes on: (Any Three) 15 marks