Notes: Modern Portfolio Theory and Distance Education M.i.m.

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DISTANCE EDUCATION

M.I.M. DEGREE EXAMINATION, DECEMBER 2009.

INVESTMENT ANALYSIS

Time : Three hoursMaximum : 100 marks

PART A — (5 × 8 = 40 marks)

Answer any FIVE questions.

1. Explain the institutional comparison of investment.

2. What are the derivative instruments?

3. Explain the two types of income securities.

4. Explain the elements in ‘‘Return’’.

5. Is ‘‘Risk’’ in a traditional sense? – Explain.

6. Point out the key characteristics in an Industry Analysis.

7. How are the bond markets classified?

8. Explain the indicators in Technical Analysis.

PART B — (4 × 15 = 60 marks)

Answer any FOUR questions.

9. Explain the measures and computation of ‘‘Return’’ in investment analysis.

10. Compare and contrast the survey, indicator and econometric approaches to forecasting.

11. Explain the fundamental analysis.

12. Being as a junior security analyst in a conservative research department, how might you try to convince the management to experiment with more modern techniques of company analysis?

13. Explain (a) the logic behind and (b) the method of measuring either Barron’s confidence indicator or odd lot trading.

14. What the Random Walk Model says and does not say? Explain.

15. Classify risks.

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DISTANCE EDUCATION

M.I.M. DEGREE EXAMINATION, DECEMBER 2009.

FINANCIAL MANAGEMENT

Time : Three hoursMaximum : 100 marks

PART A — (5 ( 8 = 40 marks)

Answer any FIVE questions.

All questions carry equal marks.

Each answer should not exceed 4 pages.

What are the basic financial decisions? How do they involve risk-return trade-off?

16. Explain public deposits.

17. What is financial risk? How does it differ from business risk?

18. Explain the various dividend policies.

19. Explain the concept of working capital.

20. Define economic order quantity. How is it computed?

21. Distinguish between operating leverage and financial leverage.

22. What is working capital?

PART B — (4 ( 15 = 60 marks)

Answer any FOUR questions not exceeding 5 pages.

All questions carry equal marks.

23. ‘‘The basic rationale for the objective of wealth maximization is that it reflects the most efficient use of society’s economic resources and thus leads to a maximization of society’s economic wealth’’-Comment critically.

24. What are the factors to be considered in the determination of a sound capital structure?

25. How is the cost of capital determined for debt and equity capital?

26. What are the essentials of Walter’s dividend model? Explain its shortcomings.

27. Discuss briefly the various inventory management techniques.

28. What methods do you suggest for estimating working capital needs?

29. Briefly discuss various types of leasing.

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DISTANCE EDUCATION

M. I.M. DEGREE EXAMINATION, DECEMBER 2009.

QUANTITATIVE TECHNIQUES

Time : Three hoursMaximum : 100 marks

SECTION A — (5 × 8 = 40 marks)

Answer any FIVE questions.

Describe the methods of collecting primary data.

30. Explain different theories of fore casting.

31. What are the salient features of decision theory?

32. Calculate the weighted geometric mean for the following data : |Value : |10 |20 |25 |15 |40 |75 |
|Weight : |1 |4 |10 |3 |5 |2 |

33. Find the suitable measure of skewness from the following distribution : |Annual sales (Rs in ’000s) |0-20 |20-50 |50-100 | |No. of firms: |20 |50 |69 | |Annual sales (Rs in ’000s) |100-250 |250-500 |500-1000 | |No. of firms : |30 |25 |19 |

34. A bag contains 8 white and 4 red balls. Five balls are drawn at random. What is the probability that 2 of them are red and 3 white?

35. From the following,...
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