(Codes Tables / Cnarts to ba Time : 3 Hours Answer ALL Questions Max, Marka 100 Delme ! ansy 132g P Brea, ( 5 SUBLET Ciera nane (TA) Sit Scuty Ana ane Poona Manger FQUA te “Pouad Bupjoy aimyy &saH0 sBuwee =:uLy 8 jo xo0Rne ‘041 s8088e 0} séjeue Aq pasn seipeoidde euosipen ain ssresia | (e| 2p PART-A (10 x 2 = 20 Marks) JAPEROYED| joy aPRqveD Differentiaie systematic and unsystematic risk ‘Systematic risk is inherent to the entire market or m Also known as “non diversifiable risk," or ‘market risk, ‘overall market, not just a particular stack or industry. Lanes fects the Uneystematic risk is specie to © company o Indust Giversifiable risk_ pny “or 2 | State the attrbutes on investment that are used in evaluating investment options. Risk, Retum, Liquidity, Tax shelter, Convenience 3 | Whats a difusion index? ‘A statistical measure used to detect economic turning points. Generally used to detect stocks that move withthe index To | Which are the variables that are useful in explaining the PTE Ratio? Expected five year growth of eamings Dividend payout ratio, sales stability, institutional ovmership of ‘tock, financial leverage. 5. | What is Bollinger band? A technical indicator - There are three lines that compose upper and lower band. Bollinger Bands: A simple moving average (middle band) and an _| 1 6. | What is the significance of tend reversal? As it indicated the end of an existing trend and the beginning of a new one, effectively spotting a reversal is the fastest way to jump" on a new trade. 7. | How is covariance used in portfolio management? is a statistical tool investors use to measure the ship belween the movement of two asset prices. A positive iance means asset prices are moving in the same general irection. A negative covariance means asset prices are moving Cov inoppeste dvscions tt 898 + d= was aunbaL SWS ‘WEL = oFoped ioxew uo una peDedTs (a) ‘2h =9p0H onsu2}eq 9b = ROH ansseiSoy — () bus0=9-02/¢-91 = oNsuseg a9-0r@-ccsewg—uisenssacly Aienbe sumer mew a HAS YER UO UNA PEPE WY Seo emgoR ea |) 24 euuuo}aq ¥ar OE, oe 6e_ Was aieusjeq | WAS oaSseIeby | — USAT ‘suunjor ysxrew Je;noysed 10} o cm uo wuryau paypedio ssfieue ue soné oigei Sumonos ous | (a 0. paunbot ‘suoqo0100 jo ose U aje00|a pue [208 Jo oWOROWYDR osnseouL = senuane quougsonuy ojeudaidde ypojes - uojeooye jesse ‘uuueJep ~ sjeoB yaussenuy ysIaeiso ~ oueUEDs OM) $5855 ‘ssapoud wounsenuy ou, yerop ul werers | ce or (Saeursgs er aT aed ‘sana we} 6uo} yBiy ~ Supsanuy ul se1q ou — voyeatysianp 1w3x24u) a ‘Spuny xoput jo syoung eu eis | ‘sunjos yoxsew oj suumyas yoors Jo AUANISUOS or SL [Won 849} winjas unuspe winjos vaN6 @ 20} 3H WI o1 oyojz0d ound ue eusea |Traditional methods : Returm on Investment approach Market share/profit margin approach Return on Equity / DuPont Analysis Return on Assets _ = OR OR. b) Discuss the significance of industry analysis for investment and the key characteristics that should be considered by an analyst. Significance- Insights Into overall economic activity; relative strength and weakness of the industry Factors — Past sales and earnings performance, permanence, government attitude, labour conditions, competitive conditions, industry share prices relative to the industry earnings, stage in the industry life cycle. 13. Ta) Discuss and illustrate how RSI can be used to predict the stock price movement. ls a momentum oscillator- measures speed and change of price movements — varies btween 0 and 100 — can be sued to identify general trend — divergence — failure swings and centerline crossovers -It helps to identify overbought and oversold securities - >70 indicates overbought and <30 is oversold - RSI line crossing below the overbought line or above oversold line is often seen by traders as a signal to buy or sell. RS Taepone = 100 - Once calculated, the plot is done Sample chart\ 1 a : f 0 a0 ved ae ine tae vase 0 nm ica TR Ponca eR lai “ie oA a rent vey, 2 an Aig "Sep Od tor Overbought & oversold can be explained with examples, OR OR b) Explain in detail the efficient market hypothesis in the weak, semrstrong and strong form. Also, detail the characteristics of each of these forms. Efficient market theory - The efficient market hypothesis (EMH) or theory states that share prices reflect all information - market cannot be beaten because it incorporates all important determining information into current share prices. Therefore, stocks trade at the fairest value, meaning that they can't be purchased undervalued or sold overvalued, The weak form suggests today’s stock prices reflect all the data of past prices and that no form of technical analysis can aid investors. + The semi-strong form submits that because public information is part of a stock's current price, investors cannot utilize either technical or fundamental analysis, though information not available to the public can help investors. «The strong form version states that all information, public and not public, is completely accounted for in current stock prices, and no type of information can give an investor an advantage on the market, Explain how the Markowitz Model of portfolio management. risk can be reduced through diversification. ests a iii mode uae different from the quality of the individual Quality of portfolio is assets — Lo ‘ltUiitatio | ‘overraliance on Fistorical dala, Irelevant | assumptions, and the use of mean-variance instead of potential risks, [evan | | | Dennen / OR db) | Explain in detail the traditional Process of portfolio construction. Analysis of constraints | 4 | Determination of Objectives Bond and Common Stock 4 Assessment of risk and return Diversification | OR vo ‘) | Discuss in detail the Arbirage Pricing Theory and is relevance Ii portfolio management, APT ~ recognizes several systematic factors that affect security retums, This is in contrast to the CAPM thal uses only Beta, Anticipated vs Unanticipated events Systematic factors Sly| | \ | \ | t | R=E+bf+e (bis the sensitivity to factor f, this can be further expanded to include several other factors) | Empirical results for APT is still in its infancy | \ | | “The mean risk-free rate was 6%. Calculate the Treynor measure, Sharpe Measure and Jensen Measure for the three funds and the merket index. Which fund is the best investment option? OR OF 8) | Consider the following information for three mutual funds A,B,C | 1g | and the market | IT Mean return | Standard Beta i! (%) Deviation (%) [A 42 118 [41 B 70 [15 0.9 {c 13 20 42 [Market Index [414 47 4.00 i | | | | | Treynor [Sharpe Jensen [A 15.45 [0.333 05 {B | 4.44 10.267 -0.5 Cc 5.83 10.350 1.0 | Market 5 10.294 0 1—— The current operatin sation ¢ Design Analys! The following are th lows of Wo projects that Ferry Tidis] *O considering for expansion. The Wo projects are, jidopendant and their fas no constant on the capital Foaulrad Both the projects have a gor saivage at the ond of 1) ir tonure, Evaluate the projects using NPV, IRR and Profitablily indox mathod and stato {Sach project shoud bo eceptod oF te}e(oe —Yoar Project A (Ra) \ BiRs) 2,30,000-7 2,20,000/ 3,00,000 7,80,000 — 510,000 E10 | 1,580,000 pet year OR athe | cane of a company Is Rs 00,000. the | HO ‘company has Rs 12 takhsor 10% debt outstanding, Its cost of equity . capital is estimated at 14%. / (Determine the t vatua of the firm using traditional approach (5 Marks) (Determine the overal\gapitatization rate, ratio (3 Marks) (i) The company | ‘and debt to equity, is dons\eting increasing ts teverage by faising an adonal R9\6,00,000 debt and using the proceeds to ret tho anourot omy, THs incroase indent F expected to,fesut in an Incase In the cost of capital, The frow gost of debt wil bo 12% ah tho cost of equity wil BS 26% Would/you recommend the Nan? (? MARS, 4 he we x Se PARLGULA 19-191 . patawiation /Croathity / Casa study questions) ihre ATA LY ie Th os at osID No 1466 ¢/ 900 SIEM) FQuA poeraem 04 Jor)a3 Cen) — Ma SUBTECT Cade nd Name BAIS. STRATEGIC HUN RESDERCE MANAGEMENT ila aca rN \) asswereey orf ep BN Tine: 3 Hours nover att Quertons — [REX] Sa D i Paecrb. a [bai w 7 wo x 7 | semen + GestBenets Sess anys may be ated to evaluate HR progans, senagenddnclopmet Penpesive toward fiman asses facilites heir becoming « sapestie Livan: es mar ater eioscslege eam be ones, See tyanes SEE sppvach fo HR, howeve, dot sot always iovlve + human ss eppvach 1 exployx ris Sted in the Manngng Eaphonny stat Pace Sense cule Ses enpinyes mu be undertakes in tnde wih satgieso en yes lang Motes t rela a actpable wan on teens spcjess Ths mputes vateznn of the employee os an set which coe Se Biaiwes on EES ar ge pe ieee = bs w = 5 » of tmplemendng HR statis, polices. and proctices in nario reco and Gc appr of andr wit bef wo oes i ©] bicss various naatag ESTO am ca + [Tenet + | Pymamcenent + | Maines coe + | Storen reg proces. Ls | access aa a a ae Ye1ed question lies in “training needs analysis” which tp in the entire process of taining and developmen pr recesses 24 hours a day, tegration between world: ing of process as anpropriteto the context inwh sdemployments. The sta carer planing mustbecenteredaroundbuildingcompetenies instead of postions. Further individual employee hs sigFcwitrolenself-career ‘mangentasthatoftheorganisation The succesful self-eareeranagementsuppared ‘by organisation equiesfourcompetenciesaccordingto Ben ballofuniverily of Sussex ‘who resented ter in bispapr led” Career Management Competenies~the nda perspective published near development Intra estentals sls needed by wcoach? aleSoon ashe Finished his studies, -\iler entering the organization atan early a we of 24. there his look] bone in bis growth, Entered in to the organization asa business analyst, and now a the aye of 49, grownas one oF the reional heads of the company. all betasted is success. He has only one stepto teach the top most level of the organization for which there are ten to twelve persons competing. As an Asian he hardly has.a chance to win. As fara the personal life is concemed, got marries to Renu who 1salso an engineering graduate but yave up her job to look alter their two children. As his job made them to travel around the world often, she could not jiany organization. She is the backbone of their family andhe atwibutes her success tohis wile. He is successful both at work and at home. But still he is not happy. He feels that he has missed something in his life, All the growth in the organization is not tasty now. Nowwhen he rewinds his days, be feels that he has missed many things in like. The most iryatat thing is his passion for music while hewas in hiscollege He had many fans for his music. His voice mesmerized many. After joining the US University for the Masters Degree, he totally came out of music. Till date he could not touch his piano and sing. The thought of music has started disturbing him for the past two months, Now in this breezy evening, he has taken the decision.” Quitjob Start Sing” Read the above case and answer the following questions 1. Doyou think thatthe organization has some responsibility for Sham’s decision? ‘Yes, Giving space for employees other than their office works for employee's well being, 2. Ian efficient manager like Sham has to be retained in the organization, what role does the organization have to play in one’s life? Organizatuon has to identify the other skill sets and interest possessed by the employees and need to create a space for utilising it in the office 3. Docareer plateau play any rolein Sham's life? Yes. Sham is in contribution Plateau where he has grown up i 8 grow sanizatioval ladder Rr nese Ree grown up in the organizational ladder but 4. IsSham’s decision a right une? May not be right as he has taken many efforts to come to the curtent position