- JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATION – APRIL 2014
M.COM – II SEMESTER
SECURITY ANALYSIS & PORTFOLIO MANAGEMENT
Duration: 3 Hrs Max. Marks: 100
Section – A
- Answer any SEVEN questions. Each question carries 5 marks. (7×5=35)
1) What is the difference between Capital Market Line (CML) and Security
Market Line (SML)?
2) What is the significance of beta (β) ? Give interpretations of negative, positive
and zero beta
3) In credit rating what does the symbols -AAA+, BBB & D signify?
4) A security has a beta of 1.4. What is the expected return as per CAPM if the
market is returning 12% and risk free rate is 10%
5) What do you mean by EMH?
6) With the help of the formula, explain the concept of bond duration?
7) What is a derivative? What is the fair 3 month forward price of gold for 10
grams, currently trading at Rs 28,000 per 10 grams, the cost of
insurance and storage for 10 grams are 0.1% per annum each and risk free
rate is 10% per annum.
8) With the help of an illustration, explain risk − return trade off?
9) Differentiate between systematic and unsystematic risk?
10) Mention at least 5 types of mutual funds ?
Section – B
- Answer any three Each carries 15 marks. (3×15=45)
11) What is the YTM of a bond with the following characteristics?
Face value = RS 100. Coupon Rate = 14% (Per annum; paid annually)
Current Market Price = Rs 95.
Years remaining to maturity = 6 years. Maturity value = 105
12) What is fundamental analysis? Explain the significance (giving the
formula) of at least 5 ratios that are to be evaluated as part of
fundamental analysis?
13) Explain with illustration: i) Candlestick charting & ii) Point & Figure chart ?
14) Define a futures contract? Explain the role of market participants in a
futures contract.
15) What is a swap? Explain the types of swaps?
Section – C
- Compulsory question. ( 20 marks)
- Rate of return and risk for three growth oriented companies were calculated over the most recent 5 years and are as follows
| FIRM | RETURN -% | Portfolio Risk -% |
| M | 15 | 16 |
| N | 13 | 18 |
| O | 12 | 11 |
If the risk free rate is 7%, rank the companies as per Sharpe’s index of portfolio performance?
- Highlight the differences between Investing & trading through the concepts of Fundamental Analysis & Technical Analysis. In this context mention the qualitative factors to be considered in fundamental analysis.
(10 +10)
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