Dibrugarh University - Security analysis and Portfolio Management (2011)

1. (A) what do you mean by fundamental Analysis and Technical Analysis? Bring out clearly the points of distinction between the two.
(b) What do you mean by return? Write a note on the return when ‘capital is at risk.
2. (A) what do you understand by portfolio Management? Write a note on the time value of money.
(b) What is Diversification? Discuss the methods of diversification of securities.
3. (A) company p has a beta 1.45, the risk –free rate is 10% and expected return on market portfolio is 165 the company pays a dividend of Rs 2 per share and expected growth in dividends is 10% p.a.
(i) What is the share’s required rate of return according to SAPM?
(ii) What are the shares ‘market price assuming the required return?
(b) What do you mean by capital market line and Security market line? Distinguish between CML and SML.
4. (A) write notes on Sharpe’s treynor’s performance evaluation models.
(b) Determine the treynor’s and Jensen’s’ measures of portfolio performance from the following information:
Average rate of return on market portfolio 18%
Average rate of return on this portfolio 19%
Average risk ---free return 12%
Standard deviation of this portfolio 14%
Beta of portfolio under consideration 0.95
5. (A) write a note on the contract Specification in case of options. Discuss the trading of options in developed financial markets.
(b) What are the basic features of Future? How does it differ from options?