FACULTY OF MANAGEMENT
M.B.A. IV Semester (CBCS) Examination, May June 2018
Subject: Investment Management
Paper MB 404 I
(Elective III Finance)
Time: 3 Hours Max.Marks: 80
Note: Answer all the questions from Part-A and Part-B.
Each question carries 4 marks in Part-A and 12 marks in Part-B.
PART A (5x4 20 Marks)
[Short Answer Type]
1 State and investment decision process
2 What are features of debt instruments and state its types?
3 State the uses of Security Market Indexes.
4 How to determine portfolio return and risk?
5 State types of mutual funds.
PART B (5x12 60 Marks)
[Essay Answer Type]
6 Discuss the factors influencing for investment decision for a rationale investor.
OR
Explain the elements in fundamental analysis.
7 The ex-ante returns on a fund are estimated as below.
%Returns 11.23 14.64 13.21 9.86 10.11 9.56
Probability 0.1 0.1 0.1 0.2 0.3 0.2
You are required to find the return and risk of the fund.
OR
Consider a bond selling at a par value of Rs. 1,000 with 7 years to maturity and
coupon payment, If the yield to maturity is find the duration of bond when
the coupon are paid annually and semi-annually?
8 The latest dividend paid on an equity share is Rs.3.45 per share these dividends
have been growing at a constant rate of 6.7% per annum and are likely to grow at
this rate till long discount future. The required rate of return is 11.12%. You are
required to find its intrinsic value today, after two years and after 5 years.
OR
Mr. Ashok wants to purchase a stock and hold on it for 5 years. He estimates that
Rs. 4 dividend would be paid by the company for the next five years. He hopes to
sell the shares at Rs. 60 at the end of the fifth year. His required rate of return is
10%. What is the present price?
..2
OU 2260 OU 2260
Code No. 4567

9 Explain the assumptions and applicability capital asset pricing model in portfolio
selection.
OR
Assume your self as a portfolio manager and with the help of the following
details, state the securities that are over priced or under priced in terms of the
security market line.
Security Expected
Return Beta Standard
Deviation
A 0.33 1.7 0.50
B 0.13 1.4 0.35
C 0.26 1.1 0.40
D 0.12 0.95 0.24
E 0.21 1.05 0.28
F 0.14 0.70 0.18
Nifty Index 0.13 1.00 0.20
T-Bills 0.09 0.00 0.00
10 Discuss the problems and prospects of Mutual Fund Investments in India.
OR
With the following details evaluate the performance of the different funds by using
Sharpe, Treynor and Jensen methods with Rf 5%.
Funds Return Standard
Deviation
Beta
A 2 20 0.98
B 12 18 0.97
C 8 22 1.17
D 9 24 1.22
Market 10 20 1.00