Invest Analysis

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AEREN FOUNDATION’S

Maharashtra Govt. Reg. No.: F-11724

AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOL
SUBJECT:- Investment Analysis Management
Total Marks -80
CASE STUDY 1

(Marks 20)

Downloaded Data of Bank of Baroda and HDFC Bank from www.nseindia.com of last 11 years has been summarized as follows. You are required to analyze the data using appropriate statistical tools, interpret the results and provide necessary advice to the investors as research analyst. Sr.No

Date

Symbol

Close
Price

Symbol

Sr.No

Date

Close
Price

1

1-Apr-97 BANKBARODA

56.75 HDFCBANK

1

1-Apr-97

46.45

2

1-Apr-98 BANKBARODA

108.35 HDFCBANK

2

1-Apr-98

72.8

3

1-Apr-99 BANKBARODA

45 HDFCBANK

3

1-Apr-99

67.6

4

3-Apr-00 BANKBARODA

47.4 HDFCBANK

4

3-Apr-00

247.15

5

30-Mar-01 BANKBARODA

60.45 HDFCBANK

5

2-Apr-01

223.15

6

1-Apr-02 BANKBARODA

50.45 HDFCBANK

6

1-Apr-02

233.65

7

1-Apr-03 BANKBARODA

86.45 HDFCBANK

7

1-Apr-03

234.3

8

1-Apr-04 BANKBARODA

250.45 HDFCBANK

8

1-Apr-04

384.35

9

1-Apr-05 BANKBARODA

221.85 HDFCBANK

9

1-Apr-05

551.55

10

3-Apr-06 BANKBARODA

232.95 HDFCBANK

10

3-Apr-06

773.85

11

30-Mar-07 BANKBARODA

215.05 HDFCBANK

11

30-Mar-07

954.15

CASE STUDY 2

(20 Marks)

Given below are the returns on the three stocks Supertex, Colourtex and Wivetex for a four year period. Compute the average returns, variance and standard deviation if a portfolio is constructed such that the stock has lowest standard deviation accounts for 50% of the funds, a stock having the next lowest standard deviation accounting for 30% and the third stock accounting for 20% of the funds.

Period ( Years)

Annual Returns (%)
Supertex

Colourtex

Wivetex

1

10

11

8

2

12

9

12

3

14

13

9

4

16

17

15

CASE STUDY 3

(20 Marks)

Pruthvi Hardware Ltd. Invested on 1-04-2006 in equity shares as below:Company

Number of Shares

Cost (Rs.)

Mafatlal .Ltd.

.1000 (Rs.100 Each)

2,00,000

Natraja Pencil Ltd.

500 (Rs.10 each)

1,50,000.

In September 2006, Mafatlal Ltd. Paid 10% dividend and in October, 2006 Nataraj Ltd. Paid 30% dividend. On 31-3-2007, market price of shares of Mafatlal Ltd. And Nataraj Ltd. Were Rs.220 and Rs.290 respectively. Pruthvi Hardware ltd. have been informed by their investment advisor that :-

1) Dividend s from Mafatlal L Ltd. And Nataraj Ltd. For the year ending 31-03-2008 are likely to be 20% and 35% respectively.
You are required to

1) Calculate the average return from the portfolio for the year ended 31-03-2007. 2) Advice P Ltd. Of the comparative risk of two investments by calculating the standard deviation in each case.

CASE STUDY 4

(20 Marks)

A) The following table provides details about three mutual fund portfolios. Find out the Sharpe, Treynor and Jensen Index and rank them. What are your suggestions to the investors? (10 Marks)

Portfolio

Return on
Portfolio

Standard Deviation

Beta

Equity Fund

26

12

1.25

Mid Cap
Fund

40

10

0.80

Infra – Fund

24

14

1.40

Market Index

18

1.00

Risk Free Rate of Return : 6%

1. The beta of Equity fund is higher than the Beta of Mid Cap fund but the returns are higher in Mid Cap Fund than Equity Fund. Do you agree with this statement? If yes, explain with reasonable examples.

2. The beta of Infra – Fund is the highest among all three fund but the returns is the lowest among all three fund. Explain with reasonable examples.

B) Share of HDFC and BANK of Baroda display the following returns over the past two years:(10 Marks)

YEAR

HDFC

BANK OF BARODA

First Year

232

775

Second Year

215

955

1) What is the expected return on a portfolio made up of 40% of Pepsi and 60% of Coca-Cola? 2) What is the standard...
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