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    IPM Examination Model

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    IPM Examination Model

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    IPM Examination Model

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    KALAVALA MAHESH BABU

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    © All Rights Reserved
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    Sede: 21003053 ele y 38 MBA | Il Semester Supplementary Examinations ‘August/September 2023 INVESTMENT AND PORTFOLIO MANAGEMENT (Common to B&FS, MBA, Fintech & Finance) —— Max. Marks: 60 ‘All questions carry equal marks SECTION -A (Answer the following: 05 X 40 = 50 Marks) 5M 1 (@) State and explain the objectives of investment activity. .d speculation.” Discuss: 5M (b) “Investment is a well-grounded and carefully plannec OR 2 @ pte investment process involves a series of activities starting from the policy formulation.” 5M iscuss. (©) Discuss the factors that differentiate the investor from the speculator and gambler. 5M 3 (a) Briefly describe the techniques of ‘short-term economic forecasting. 5M (b) Describe the key economic variables that an investor must monitor 2s part of his 5M fundamental analysis. OR 4 (a) Describe the various characteristics of an industry that an analyst must consider while 5M doing industry analysis. (b) What is company ‘analysis? Explain how financial ratios can be used to determine the 5M strengths and weaknesses of 2 company. ial leverage.” Explain. 5M 5M 5 (a). “Financial risk is a function of finan and risk of a security. (b) Explain the mean-variance approach to estimation of return OR 6 (2) Astock costing 250 Rs pays nO dividends. The possible prices that the stock might sell for 5M 1 the end of the year and the probability of each are: Possible prices (rupees) Probability 200 0.10 230 0.25 250 0.35 280 0.20 310 0.10 (i) What is the expected return? is {i) What is the standard deviation of the returns? icien t of determination. 5M (b) Explain the importance of the estimation of beta and coeffi 7 (a) Explain the importance of earnings, dividend pay-out and required rate of return i in 5M estimating the theoretical value of the (b) Discuss the role of P/E ratio in making the cell and buy decision. ‘OR 5M Contd. In Page 2 Code. 216003054 dividend and price. According future and at the end of of return is 12 arding Jasmine Company’ ‘tucend share in the ‘ é Rs.3 per to him, the company will pay 4 dividend of F » vacuired rate five — year holding period the stock could be sold at Rs.80. His requir y ok? per cent per annum, What should be the price of the Jasmine stot value, The market rate (b) A 20 year, 10 percent coupon interest rate bond has Rs. 1000 face n has five years to of interest is 8 percent. Compute the intrinsic value of this bond if it y' maturity. Assume that interest is paid annually. 8 (a) Arun has made some forecast I rersification. Explain the statistical metho 1 kowitz to reduce 5M 9 (a) Define Markowitz diversification. Explain the stati tical method used by Marko! ribution of returns for the 5M risks. ; (b) Corporations Joey and Sunil present the following probability dist next year. panies: oe Stes E g Returns aS [ State. si. 0Et | Probability __| _ Joey Corp_ Boom 01 16 Recession 02 7 Normal 0.4 12 Recovery 04 1 Slow Growth 02 14 (i) Determine the expected returns for both corporations. (ii) What is the covariance of returns? OR 10 (a) Explain the significance of covariance in the estimation of the risk of a portfolio. 5M (b) “CAPM can be used to evaluate the pricing of securities.” Discuss. 5M SECTION -B (Compulsory question, 01 X 10 = 10 Marks) 10M "1 Case Study/Problem: The estimated rates of return, beta coefficients and standard deviations of some securities are as given below: Security Estimated return Beta Standard deviation (per cent) ( per cent) A 35 1.60 50 B 28 1.40 40 c: 24 1.10 30 D 18 0.90 25 E 15 0.75 20 F 12 0.60 18 The risk free rate of return is 8 percent. The market return is expected Determine which of the above securities are overpriced and which are a hee MBA TI Semester Lyplementary Examinabeng Ay [Sep 008 Tnvestmene and Por-folio Management Gde : #1E00305a Sethn- A State and explain the obfectives of investment albvity sm }. Capital Growth a Safely 3. InGone 4. Tax deduction _(D)| Davestment is a well-grwurded ond Carell planned Speculation. Discuss 5M |. Speculation js defned ax an ack dne without “ Knowled, 1H. ¢ Undexstandin with the Sole bzett of pontine seul, 3.gb iy a Congecture withouk any firm evidence. Fyveatment on the Other hand pa Subdect of deep understondin S Based on (agi ‘on evidence. paged dlecition Ro The investment proceat involve a Sevier of acbvibey sb i Gn from the polity fomulabn DidCuse 5M e eZ. |. EValuabioy of investment gaale ot: Eulualion of the present foantial Slua tion o.(. 7 2, hasel allocabm : fe Chooxe the Bight ioveatmont stosleyy Ns 7 5 Tack and manage pan post folio Duce the fatsy that differenliate The investor Foon he Cpeculator and gambler 5m LA Speculater bilizes staleyin oad fyialh a Shoster time frame . a. Speculatess fave m idk 3. Speculatos anlicrpeliog tu Gamblin involved 3 game of Chance 5 Compre b Speculation, gonblisy hog a higher AK. of Shas fem eGroniC fuse price movemerly Briel, deacabe the techniques fpsecaghng. Sm [+ Surveys 4g Indicatool 2, Diffusion Inde / “()\ C4 | Descsibe the Various Chavaltevit0 of an indugty yal 24 that an ex While doing j a ee analanys om analyit must Co |. Post Sale yg. Nature of Campelilion 3. Raw motestaly Gy. Nature of product (ne = Capacity jnglalled 4“) (hat “ Conpany analygis ) Explain how frantial zaliox Can be 5@. used to deteamine the Stsengthh and WeaKnelted Be ye: e Conpong Poul gid am J | Copy Praliyis Cont aigg on evalualin & exominalion of a Company, it frontal health. | Fiewaciol ration used b detesnine 3! | | Contry pohly ag. Liu Measure mene Z: Solwocy indicates. Fins on ia funchm of Francial leverase. Explain 5m | Financial leverge rekra + the We of debe fnancin 2 Jntsease the potential aeturay on ievettnenk 3 a 3. Financiel ix sels te the 8K That a Compan he lle to mek 1 Anancal bbyabing Wied (Due tr Faclass Such of Chagges in interest sateg <6 Explain The mean —VavianCe appoath tr extimakn : | yetuan and BAK of & Sewusig Sm a |. Vasian Ce ot. Expected wecusn 3. Frvertment decisions tp. Level of 39k 6 Rebun of @ Specific Sealy. GO| A soos Cottey Rao ppt me cvidends The forse pr that the Stocr might Sell at the erd NEE. the poobsbt lity of eath ust. 5m lo What ip the expected vetusn? am [Peer of | paepar a Expeiter Retuin 200 D-lo | e0ox0-10 930 oa 930 NO-*S = StS 450 0.35 | 850 N0.35 = 845 440 0-40 980 K0-80 = 56 310 0:10 3)0 X0-[0 = 31 Ve Expected Ran zh 52 GD het jp the Standard deviation st the relumy) 3M (220-358)" x 010s 804 | (930-258) X oars lal | (200-259) 10-35 Sale | (e-#5§)" K-80 = (66 (jo-asaye K-10 Ge \Vasiance = 886 Standard devialin = ere = a4 EQ) | Explain he impettonce of the edtimation of beta and | Goefhitiene of deterninalion 5m ie j. Te helps bce the sal how a \aiable high Can be predicted Fran WE Vanies. ; |g Sk helt in defa ) |g. apm i ued to aledate the Ca of =~ 5 Higher the Beta higher 18 the Conpents tion impostance of Camnings, dividena page out aa of retain in estimating gre qremelical om | F()| Explain tHe Vequiveel rate Value of he SbtK |-Sinpattonce of eaanin g. DMidend Payout | a Required walt of wetum +6 | Direuy the wle of ple wabto in akisg the gill cael by decipio- Rie of WE alto in many Role of PE salio in snakig din se Q tye Sl decisim 3M he hy decitim 2%) Talmin€ ney, the Company. wil Zt the 20. 48 D=3, 82191 , r= 80 4 35. (eo) pas 2 3 Se ao ee aa 2 2 aR AyeDt Tel? * ane? (EOS ee ps abbte3rte AG] 444 45-39 Pa 562] A 20 fer, 0 4. Gugon intewegt yate bd has 82. |000 faCe Value. The maatret Value aate of intesea ia & /. Grte the GabringiC Value of thik porel Hit har Ave Year -b males’ Ame thal Wesel is Paid annual, 5m . FntrimiC Value => PV of Coup —> PV of fate Value = 3496. 71 +4 640-58 = |0FT-29 the Stabisticel Define (Meskowite divergifialion. Explain Ae Sia method Wed by 4. and Sonil present tne “allowing, paohsby Es oD) faa voturmnp ta the next far. 5” Oo Retwind i 1] Slate probability doy Ga oe fea Us Gop Sunil | | Bon ae 16 22 7 | ReCexyim 0-08 ae —l || Normal ok Ig !) | Reave: 9-| mi {d | Stow Growth — OR Ib 20 SS a (j) Determine the expeltel seburg try both Coapoea Bip om) Enxpetted oebwrn dr doey Cop. = (0-1 xi) 46-8 D+ 04K 401% i) 40-2419) 42 Expected gelurn for Sani Cop < (01 e+ GH +e“)t 6.1xH)-+(0-2%0) all () hak 9 Th Gaile of atu) 3M Covwian ce of Betunny z (6-40) Bains) X01 + (4-44) Cyanykoe + (a-44) (iE! ) Kole + (48) (I6-0 KOT (iw-44) fro 14 )XO8 a —_— grfend | = Fa0k + 01.826 +£0-UUA) $0. BB+ EWE | geey ; sl 10 Y Eaplain ThE Sigrifiton@ of Gvasance in the efimalia ok he vak of a patho §=—5™M |. Giwiowte if wed fn Alio heey +p determine What pues + wclude ia the patialio. on pe cabal measure of the Peet! a. Cole selalsanhip teween two eat PIA 2. : ag Guaienle meant thak aude Generel | 1 in the Samé im. ph) CAM Con be Uded evaluate the Pacing Ae | Gawities. Discuss. 5m 1 chon w to claude sheer « Stee UBF Vee Ty glue of ™ pan tg a and the Hine see ae 7 Copored with expected wetuan g.cThe Cussent price of a Stocn iy | | | | —o__—S—s.—aW'$$s

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