This document outlines a test for Security Analysis and Portfolio Management. The test contains 5 questions and lasts 90 minutes. Students must answer any 3 questions. The questions cover topics such as investment avenues, portfolio returns and risk, option pricing models, financial derivatives, and fundamental analysis. The test is worth a maximum of 30 marks.
This document outlines a test for Security Analysis and Portfolio Management. The test contains 5 questions and lasts 90 minutes. Students must answer any 3 questions. The questions cover topics such as investment avenues, portfolio returns and risk, option pricing models, financial derivatives, and fundamental analysis. The test is worth a maximum of 30 marks.
This document outlines a test for Security Analysis and Portfolio Management. The test contains 5 questions and lasts 90 minutes. Students must answer any 3 questions. The questions cover topics such as investment avenues, portfolio returns and risk, option pricing models, financial derivatives, and fundamental analysis. The test is worth a maximum of 30 marks.
1. Explain the various investment avenues and their features. 2. Stock R and S display the following returns over the past two years: Year Stock R Return (%) Stock S Return (%) 19X3 10 12 19X4 16 18 a. What is the expected return and risk on a portfolio made up of 40% R and 60% S? b. What is the standard deviation of each stock? c. What is the covariance of stocks R and S? d. Determine the correlation coefficient of stocks R and S. e. Consider a third security T, along with Stocks R and S. Its return over the past two years was 19X3, 16%; 19X4, 10%. Would this security provide any advantages in combination with stock R? With Sock S? With Stocks S together? 3. Ms. S wants to earn by writing call option on M Corporations stock. The current price of the stock is Rs. 28 and Mr. S wants to write a 4 month call option with the striking price Rs. 30. Mr. S wants to determine the appropriate premium to charge for the call option. The stocks standard deviation is Rs. 3. The riskless rate is assumed to be 10%. Determine the premium value using B-S model. 4. What are financial derivatives? Elaborate different types of derivatives. Diagrammatically explain the pay-offs of a call buyer and writer. 5. What is meant by fundamental analysis? Explain various factors of fundamental analysis.
Security Analysis and Portfolio Management
1St Internal Assessment Test Duration: 90 Minutes
Maximum Marks 30
Answer any THREE Questions
1. Explain the various investment avenues and their features. 2. Stock R and S display the following returns over the past two years: Year Stock R Return (%) Stock S Return (%) 19X3 10 12 19X4 16 18 a. What is the expected return and risk on a portfolio made up of 40% R and 60% S? b. What is the standard deviation of each stock? c. What is the covariance of stocks R and S? d. Determine the correlation coefficient of stocks R and S. e. Consider a third security T, along with Stocks R and S. Its return over the past two years was 19X3, 16%; 19X4, 10%. Would this security provide any advantages in combination with stock R? With Sock S? With Stocks S together? 3. Ms. S wants to earn by writing call option on M Corporations stock. The current price of the stock is Rs. 28 and Mr. S wants to write a 4 month call option with the striking price Rs. 30. Mr. S wants to determine the appropriate premium to charge for the call option. The stocks standard deviation is Rs. 3. The riskless rate is assumed to be 10%. Determine the premium value using B-S model. 4. What are financial derivatives? Elaborate different types of derivatives. Diagrammatically explain the pay-offs of a call buyer and writer. 5. What is meant by fundamental analysis? Explain various factors of fundamental analysis.