JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD

22MBA19F1: SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT

MBA (R22)

Course Objective:

To enable understanding of the investment process, investment alternatives, Valuation of debt and equity.
To impart knowledge of the Portfolio Analysis.
To elaborate various aspects in Bond Valuation.
To educate on the various aspects in Equity valuation.
To discuss the methods of performance evaluation of mutual funds.

Course Outcome

Students will be able to:

Understand the Indian financial system and also about Investment.
Learn the relevance of risk and returns.
Learn various influences bond valuation and management.
Understand the relevance of equity valuation of cash market and derivatives.
Identify the need for mutual funds in India. *****

UNIT - I: Introduction to Investment

Introduction, Indian Financial System and Structure, Investment,

Speculation and Gambling, Features of Investment, Investment Avenues, Investment Process. The Investment Environment, Securities Market of India, Securities Trading and Settlement, Types of Orders, Margin Trading, Roles and Responsibilities of SEBI.

UNIT - II: Portfolio Analysis

Risk and Return Analysis, Markowitz Portfolio Theory, Mean – Variance

Approach, Portfolio Selection, Efficient Portfolios, Single Index Model, Capital Asset Pricing Model, Arbitrage Pricing Theory.

UNIT - III: Bond Valuation

Classification of Fixed Income Securities, Types of Bonds, Interest Rates,

Term Structure of Interest Rates, Measuring Bond Yields, Yield to Maturity, Yield to Call, Holding Period Return, Bond Pricing Theorems, Bond Duration, Modified Duration. Active and Passive Bond Management Strategies, Bond immunization, Bond Volatility, Bond Convexity.

UNIT - IV: Equity Valuation

a) Intrinsic Value versus Market Value, Equity Valuation Models

Discounted Cash Flow Techniques, Dividend Discount Models (DDM), Growth Rate cases for DDM, Free Cash Flow Valuation Approaches, Relative Valuation Techniques, Earnings Multiplier Approach, Price/ Earnings, Price/ Book Value, Price/ Sales Ratio, EVA.

b) Fundamental Analysis, Technical Analysis, Efficient Market Hypothesis.

UNIT - V: a) Derivatives

Overview of Indian Derivatives Markets, Option Markets, Option Strategies

and Option Valuation, Forward & Future Markets, Mechanics of Trading,

b) Performance Evaluation: Mutual Funds, Types of Mutual Funds Schemes, Structure, Trends in Indian Mutual Funds, Net Asset Value, Risk and Return, Performance Evaluation Models: Sharpe Model, Treynor Model, Jensen Model, Fama’s Decomposition.