Showing posts with label Security Analysis And Portfolio Management. Show all posts
Showing posts with label Security Analysis And Portfolio Management. Show all posts

AIMA Question Paper of June 2015 for FM03

All India Management Association (AIMA) Question Paper details of  June 2015 examination.

AIMA (All India Management Association)
JUNE 2015 EXAMINATION
FM 03 / eFM 03

SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT


Time: Three Hours                                                                                Maximum Marks: 100

Note:
1. The paper is divided in three sections: SECTION-A, SECTION-B and SECTION-C.
2. There are seven questions in SECTION-A.  Students are required to attempt ANY FOUR.
3. SECTION-B has five questions, attempt ANY THREE.
4. All the questions of SECTION-C (Case Study) are compulsory.

SECTION-A (10 Marks each)

1.       State the economic and financial meaning of investment.  What are the risks associated with investment in stock market?
2.       What is SML?  How is SML different from CML?
3.       Explain in details fundamental analysis.  How is fundamental analysis different from technical analysis?
4.       What do you understand by EMH?  Distinguish between the three levels of market efficiency.
5.       Name the different types of Mutual Fund Schemes available.  What are advantages and disadvantage of investing through mutual funds?
6.       Distinguish between primary and secondary market.  What are the major roles of stock market regulator for these markets?
7.       Explain multifactor model of portfolio.  Which are the major factors in the model?


SECTION-B (15 Marks each)

8.  The mean return, standard deviation and beta of mutual fund scheme are   13%, 17%   and   1.2 respectively.  Risk free return during this time period was 5%.  Calculate the Treynor     measure, Sharpe measure and Jensen measure.  What inferences do you draw from these        measures?
9.  From the following information available calculate:
                                           Stock A                      Stock B
Expected returns                    14%                        20%
Standard deviation                 25%                        40%
Coefficient of Correlation of Stock A, B = 0.40       
a) the Co-variance between Stock A and B.
b) the expected returns and risk of a portfolio in which A and B are equally weighted.

10. The following information is available:
Expected return for the market = 14%
Standard deviation of the market return = 20%
Risk-free return = 6%    
Correlation coefficient between stock X and the market = 0.7
Correlation coefficient between stock Y and the market = 0.8
Standard deviation of stock X = 24%
Standard deviation of stock Y = 32%

You are required to:
a) Calculate the beta for stock X and stock Y
b) Calculate the required rate of return for each stock.

11. Explain various investment alternatives available for an Indian investor.  Which of these alternatives are eligible for saving taxes?
12. What do you understand by efficient frontier?  Explain Markowitz portfolio theory.


SECTION-C (15 Marks)
Case Study (Compulsory)

The current dividend on equity shares of the Shopkart Ltd, an online shopping firm is Rs. 5.  In view of boom in e-commerce business Shopkart is expected to enjoy an above normal growth rate of 40% for 5 years.  Thereafter the growth rate will fall and stabilize at 15%.  Equity investors require a return of 20% from Shopkart’s stock.

13.          Case Question:
                What is the intrinsic value of the equity shares of Shopkart?