Suggested Readings : Shapiro, A.C., Multinational Financial Management, Wiley Levi, M.D., International Finance, Routledge Apte, P.G., International Finance, Tata McGraw Hill Siddaiah, T, International Financial Management, Pearson 4.5: Security Analysis and Portfolio Management Module I: Security Analysis Investing and investments Nature of Understanding the world of Investment : – Investments Investments attributes Comparison between investment, – – speculation and gambling Investment alternatives Real assets vs. financial – – assets Meaning, characteristics and types of financial assets Derivative – – securities Direct vs. indirect investments Framework of investment : policies – – and practices for institutions and individuals Techniques of security analysis – – Fundamental analysis vs. technical analysis. Organization and functioning of financial markets : Primary market vs. secondary market Regulation of financial markets SEBI guidelines relating to public – – issues, pricing of issues, appointment of merchant bankers and underwriting of issues Stock market indices (concept and calculation). – Fundamental analysis : Economic analysis Industry analysis Company analysis – – (including forecasting future performance) Methods of equity valuation – – Bond analysis and valuation. Technical analysis : Charting techniques (trends moving average relative – – strength point and figure analysis etc. Dow Theory Key technical indicators. – – Module II: Portfolio Management Analysis : Concept and estimation of risk and return of individual securities Relationship between risk and return Types of security risk – – – Systematic risk vs. unsystematic risk - Concept of portfolio and portfolio diversification Portfolio management process Implications of diversification – – for investors Diversification strategies Portfolio risk and return Markowitz – – – risk-return optimization principle. Selection: Markowitz (mean-variance) efficient frontier and optimal portfolio Introduction of a risk free security in portfolio Market portfolio – – – Capital market line (CML). Market Theory and Evaluation of Investment Performance : Capital asset pricing model (CAPM) Features and assumptions Concept and – – estimation of Beta Co-efficient of Beta in portfolio decisions –Significance – Single index market model for portfolio construction Security market – line(SML) Criticism of capital asset pricing model pricing theory – –Arbitrage (APT) . of Portfolio Performance: Portfolio performance measures – Portfolio revision Portfolio insurance Mechanics of international – – diversification.
Suggested Readings : Shapiro, A.C., Multinational Financial Management, Wiley Levi, M.D., International Finance, Routledge Apte, P.G., International Finance, Tata McGraw Hill Siddaiah, T, International Financial Management, Pearson 4.5: Security Analysis and Portfolio Management Module I: Security Analysis Understanding the world of Investment : Investing and investments – Nature of Investments – Investments attributes – Comparison between investment, speculation and gambling – Investment alternatives – Real assets vs. financial assets – Meaning, characteristics and types of financial assets – Derivative securities – Direct vs. indirect investments – Framework of investment : policies and practices for institutions and individuals – Techniques of security analysis – Fundamental analysis vs. technical analysis. Organization and functioning of financial markets : Primary market vs. secondary market – Regulation of financial markets – SEBI guidelines relating to public issues, pricing of issues, appointment of merchant bankers and underwriting of issues – Stock market indices (concept and calculation). Fundamental analysis : Economic analysis – Industry analysis – Company analysis (including forecasting future performance) – Methods of equity valuation – Bond analysis and valuation. Technical analysis : Charting techniques (trends – moving average – relative strength point and figure analysis etc. – Dow Theory – Key technical indicators. Module II: Portfolio Management Analysis : Concept and estimation of risk and return of individual securities – Relationship between risk and return – Types of security risk – Systematic risk vs. unsystematic risk - Concept of portfolio and portfolio diversification – Portfolio management process – Implications of diversification for investors – Diversification strategies – Portfolio risk and return – Markowitz risk-return optimization principle. Selection: Markowitz (mean-variance) efficient frontier and optimal portfolio – Introduction of a risk free security in portfolio – Market portfolio – Capital market line (CML). Market Theory and Evaluation of Investment Performance : Capital asset pricing model (CAPM) – Features and assumptions – Concept and estimation of Beta Co-efficient –Significance of Beta in portfolio decisions – Single index market model for portfolio construction – Security market line(SML) – Criticism of capital asset pricing model –Arbitrage pricing theory (APT) . of Portfolio Performance: Portfolio performance measures – Portfolio revision – Portfolio insurance – Mechanics of international diversification.
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