Section-A
Question1)a) ‘No investment is risk free’. In view of this statement, discuss the meaning and types of investment-risk. Can this be eliminated or minimized, how?
b) Differentiate between financial and economic meaning of investment. Explain the different stages of investment.
Question2) Discuss the features of investment avenues available in India. Categorize them into tax saving and non-tax saving avenues and bring out the major features of each avenues.
Question3)a) Discuss the trading system in stock exchanges in India. State some of the recent reforms in the trading system.
b) Describe the institutional structure in Indian capital market.
Question4)a) Describe the benefit of investment in mutual funds. What are various types of mutual funds schemes? What are loads and NAV in mutual funds?
b) Use closing price data of June 2013 (from June 1 till June 30) of Sensex and Infosys Ltd. calculate beta of Infosys Ltd. Visit www.bseindia.com for closing price data.
Section-B
Case Study
The following data is offered on two stocks – A and B:
Stock Expected return Standard deviation
A 0.15 0.30
B 0.10 0.20
The correlation between the two stocks is 0.85
Find out the expected return and risk on the following combination of these two stocks:
Combinations % of Stock A % of Stock B
I 70 30
II 50 50
III 40 60
IV 10 90
Case Question:
What would be your conclusion if correlation between two stocks is negative 0.67 and they are held in the proportion of 60% and 40% respectively?