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Posted Date: 11 Aug 2010 Posted By:: Lakshman yadav Member Level: Silver Points: 5 (Rs. 1)
2010 Ranchi University Administration M.B.A Financial Management Security Analysis & Investment management (opt-I) (Fin Area) Code - FM 4201/4203 Question paper
Full marks: 70 Time: 3 hours
The questions are of equal value
Answer any five questions
Candidates are required to give their answers in their own words as far as practicable
1. Explain the weak form of the efficient market hypothesis. Describe the empirical tests used for
testing the weak form efficiency.
2.(a) Distinguish between investment and speculation.
(b) Describe the functions of stock exchanges.
3.(a) A share is currently selling at RS 50. It is expected that a dividend of Rs 2 per share would
be paid during the year and the share could be sold at Rs 54 at the end of the year.
Calculate the expected return from the share.
(b) What are the objectives of security analysis?
4. An investor has analyzed a share for a one-year holding period. The share is currently selling
for Rs 43 but pays no dividends and there is a fifty-fifty chance that the share will sell for
either Rs 55 or Rs 60 by the year end. What is the expected return and the risk is 250 shares
are acquired with 80 percent borrowed funds? Assume the cost of borrowed funds to be 12 percent.
(Ignore commission and taxes)
5. What is company analysis? Explain how financial ratios can be used to determine the strength and
weakness of a company.
6. A bond pays interest annually and sells for Rs 835. It has six years left to maturity and a par
value of Rs 1000. What is its coupon rate if its promised YTM is 12 percent?
7. Write short notes on :
(a) Call option
(b) Option premium
8.(a) What are the objectives of the Money Market?
(b) State the features of floating rate bonds.
9. What is a government securities market? What are the essentials elements of the proposed
secondary market design for trading of government securities?
10. Write a note on the structures transformation witnessed in the Indian Capital Market.
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