Investments

SUBJECT : INVESTMENTS MANAGEMENT

COURSE : CFM                                                                                  Total Marks : 80

Advanced Diploma in Banking, Finance and Insurance Management (ADBFM)

1)	How securities are being traded in share market?	(10 Marks)
2)	What is the difference between mutual fund and other investment companies?	(10 Marks)
3)	What is adjustable and non-adjustable capital?	(10 Marks)

4)          How finance statement analysis is being done from investor’s point of view?

	What is the importance of security analysis?	(20 Marks)
5)	What are call options? Give in brief information about put option.	(10 Marks)
6)	What is the theory of active portfolio management ? How it is monitored?	(10 Marks)
7)	What are the different types of risks with regard to debt securities?	(10 Marks)

                                      SUB :  INVESTMENTS

Note : All Questions are Compulsory

Each Question Carries Equal Marks (10 Marks)

            What is the relationship between securitization and the role of Financial Intermediaries in the economy? What happens to financial intermediaries as securitization progresses?

            Balanced funds, life-cycle funds, and asset allocation funds all invest in both the stock and bond markets? What are the differences among these types of funds?

            Using historical risk premiums over the 1980-2008 periods as your guide, what would be your estimate of the expected annual HPR on the sensex portfolio if the current risk-free interest rate is 6%?

4.     If prices are as likely to increase as decrease, why do investors earn positive returns from the market on average?

5.     The monthly rate of return on T-bill is 1%. The market went up this month by 1.5%. In addition, Amb Chases, Ins., which has an equity beta of 2, surprisingly just won a lawsuit that awards it Rs.1 million immediately.

a.     If the original value of Amb Chaser equity were Rs. 100 million, what would you guess was the rate of return of its stock this month?

b.     What is your answer to (a) if the market had expected Amb Chaser to win Rs. 2 million?

6.     Why would you expect securitization to take place only in highly developed capital market?

7.     Why do bond prices go down when interest rates go up? Don’t lenders like high interest rates?

8.     Which of the following factors reflect pure market risk for a given corporation?

a.     Increased short-term interest rates.

b.     Fire in the corporate warehouse.