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Capital Market and Portfolio Management

1. Are Investment and gambling the same? Justify your answer explaining the concept and characteristics of Investment. (10 Marks)

2. You are given the following data:
Name of the Company Expected Beta Expected Return in percent
A 0.95 12
B 0.80 15
C 0.65 13.50
D 0.64 10
E 0.90 12.5
F 0.60 16.5
G 1.25 18

Expected return of the Market - 14%; Risk free rate of return - 5%
With the help of above given information find the stocks which you would recommend to buy or sell? Which technique would you employ to calculate the same? List down the other applications if any? (10 Marks)

3. According to Lord Keynes “Given market prices, investors driven by the speculative motive, would trade on forecasts of the future market price of stocks, rather than stocks’ intrinsic values.” As a security analyst:

a. Comment on the given statement (5 Marks)

b. Given this statement, why do we need fundamental analysis? (5 Marks)

For Nmims answersheets contact
[email protected]
+91 95030-94040