DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, MAY 2017.
Fourth Semester
INVESTMENT ANALYSIS AND PORTFOLIO
MANAGEMENT
(2012-13 Academic Year and 2013 Calendar Year only)
(English Medium Only)
Time Three hours Maximum 100 marks
SECTION A — 8 40 marks)
Answer any FIVE questions.
All questions carry equal marks.
1. What are the advantages and limitations of fixed income
securities?
2. Explain how an investor realizes interest when he
purchases a zero coupon bond.
3. What is short selling and odd lot trading?
4. What are the major limitations of Markowitz model?
5. Write notes on Random Walk Theory.
6. What are the reasons for the Treynor and Sharpe indices
giving conflicting performance ranking?
7. What do you understand from the term, 'breadth of the
market'?
8. What is meant by levered portfolio?
Sub. Code
422
DE-906
2
wk12
SECTION B — 15 60 marks)
Answer any FOUR questions.
All questions carry equal marks.
9. State the economic and financial meaning of investment.
In the stock market, can you differentiate the investor
from the speculator?
10. Explain any three of the following terms
Diversifiable interest rate risk
Liquidity risk
Real rate of return
Margin of safety.
11. How does ratio analysis enable the Company analysis? As
an investor, what are the ratios which you would consider
before selecting a stock for your portfolio?
12. What is an efficient frontier? How does it establish an
optimum portfolio?
13. What are the basic assumptions underlying CAPM? What
are the limitations of CAPM?
14. What factors necessitate portfolio revision? Discuss the
major constraints in it.
15. From the given data, evaluate the portfolio using Sharpe,
Treynor and Jenson's model.
Portfolio A Portfolio B Portfolio C
Return 21% 25% 20%
Beta 0.9 1.6 1.0
Standard deviation
Market return 12%
Risk free rate