GUG/W/18/10724 1 P.T.O
Master of Business Administration (CBCS and Old Pattern) Fourth Semester Old+CBCS
Paper PCB4EB4 MBA242B
Security Analysis Portfolio Management
P. Pages 2 GUG/W/18/10724
Time Three Hours Max. Marks 70

Notes 1. Attempt any five questions.
2. All questions carry equal marks.
3. Use PVF Table.
1.
Real Ltd paid dividend of 75 last year, it is experiencing a growth rate of 20% p.a, for next 4 years, after which it will reduce and stabilise to 10% due to increase in competition. Find out the intrinsic value of share if the required rate of return from the share is 18%. Is it advisable to buy the share if the current market price is 1400?
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2.
D Ltd has issued fully convertible debenture at a face value of `100 with coupon rate of 15% which is to be converted into 4 equity shares of `10 each (at a price of at the end of 3rd year. Find out the value of debt if the expected rate of return is 17% and expected market price of one share after 3 years is `40 each.
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3.
Your client is holding the following securities.
Securities
Cost
Dividend
Market price
Beta
Gold Ltd
10,000
1725
9800
0.6
Silver Ltd
15,000
1,000
16,200
0.8
Bronze Ltd
14,000
700
20,000
0.6
GUI Bond
36,000
3,600
34,500
1.0
Average return of the portfolio is 15.7%. Calculate.
Expected rate of return in each, using the CAPM.
ii) Risk free rate of return.
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4.
Closing values of BSE Sensex where as follows.
Day
Closing price
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
140
142
140
145
147
144
146
150
150
152
149
151
155
153
155
Calculate Relative strength Index on the basis of 14 price changes.
Also draw RSI chart.
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*2886*
GUG/W/18/10724 2
5.
Assume that you are an administrator of ICICI pension fund. You have to decide whether to renew your contract with your three money managers. You must measure how they have performed. Using Treynor, Sharpe and Jensen Ratio.
Manager
A
B
C
Rate of Return
15
13
17
Beta
0.9
1.02
0.95
S.D
11
10
13
Risk free rate 11%
Market return 14%
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6.
Discuss the dividend discount model in details.
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7.
Explain the various types of systematic and unsystematic risk of bonds.
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8.
Explain the concepts of Fiscal and monetary policy.
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9.
Discuss the warren buffett and Indian investment gurus.
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10.
Write a short note on any two.
Bogle's Strategic Asset Allocation Model.
Sharpe's Single Index Model.
Preparation of equity research report.
Capital Asset pricing model.
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