Académique Documents
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Proof: 27-7-2017
CHECK LIST
1. Textbook
2. Course Outline
3. Assignment No.1 & 2.
4. Assignment Forms (two sets)
In this packet, if you find anything missing out of the above mentioned material,
please contact at the address given below:
Salman A. Qureshi
Course Coordinator
ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(Department of Business Administration)
WARNING
1. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING THE
ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD OF
DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
2. SUBMITTING ASSIGNMENT(S) BORROWED OR STOLEN FROM
OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN
“AIOU PLAGIARISM POLICY”.
Course: Investment and Securities Management (8715) Semester: Autumn, 2017
Level: MS (Management Sciences) Total Marks: 100
Pass Marks: 50
ASSIGNMENT No. 1
Note: All questions are compulsory.
Q. 1 a) How financial asset is different from a real asset. Care fully describe the risk
return trade off faced by all type of investors. (10)
b) Why is the common stock referred to as a residual claimant? Differentiate
between an open end and a closed end company. (10)
2
a. Rank the Portfolios on RVAR.
b. Rank the Portfolios on RVOL.
c. Rank the Portfolios on Alpha.
d. Which Portfolio had the smaller unsystematic risk?
e. Which Portfolio had the larger beta
f. Which Portfolio had the larger standard deviation?
g. Which Portfolio had the larger average return?
Q. 3 a) Classify and explain traditional sources of rik as to whether they are general
sources of risk or specific. You may quote relevant examples where
necessary. (10)
b) Consider a junk bond with a 12 percent coupon and 20 years to maturity. The
current required rate of return for this bond is 15 percent. What is the price?
What would its price be if the required yield rose to 17 percent? And 20
percent? (10)
Q. 4 Four securities have the following expected returns A= 15%, B=12%, C=30%,
and D=22%. Calculate the expected return for a portfolio considering all four
securities under following conditions: (20)
i. The portfolio weights are 25% each
ii. The portfolio weights are 10% in A with the remainder divided in equally in
other securities
iii. The portfolio weights are 10 percent each in A and B, and 40% each in C and D
ASSIGNMENT No. 2
Total Marks: 100
Pass Marks: 50
Note: All questions are compulsory.
Q. 1 Describe how to prepare a company for intial public offering? What possible
threats a company may encounter for going public? (20)
3
Q. 3 Discuss the present scenario of commodity exchange market in Pakistan. Also
suggest appropriate measure in the light of exisiting literature to improve the
performace of commodity exchange market. (20)
Q. 4 What are the available financial derivative in Pakistan and xplain various derivative
securities that may be introduced in market after the investment of Chinese in
Pakistan. (20)
Q. 5 Select an organization which must be listed on any of the capital markets in Pakistan
and critically make fundamental and technical analysis of that company. (20)
UNIT–1 Background
1.1 Nature of Investment
1.2 Understanding Investment Process
1.3 Types of Securities Available Worldwide
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3.2 Return and Risk Concepts
3.2.1 Return
3.2.2 Measuring Returns and Risk
3.2.3 Estimating Returns and Risk
3.2.4 The Return-Risk Relationship
3.3 Process of Securities Trading in Pakistan
3.4 Types of Risk Associated with Investment in Pakistan
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UNIT–7 Additional Investment Opportunities and Efficient Market
7.1 Warrants and Convertible Securities
7.1.1 Warrants and its Valuation
7.1.2 Speculative Value of a Warrant
7.1.3 Convertible Securities
7.1.4 Risk and Return on Convertibles
7.1.5 Convertible Preferred Stock
7.2 Market Efficiency
7.2.1 Concept of Efficient Market
7.2.2 Implication of Efficient Market Hypothesis
7.2.3 Evidence of Market Anomalies
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9.3 Capital Market
9.3.1 Assumption of CAPM
9.3.2 Market Portfolio
9.3.3 Estimating SML
Recommended Books:
Jones, C. P. (2006). Investment Analysis and Management (10th Ed.). U.S.A.: Wiley John & Sons