Portfolio Management

Paper Code: 
MFM 423
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

• Understand the concept of portfolio selection.
• Assess the efficiency level of the financial market.
• Application of asset pricing models for the selection of securities.
• Understand portfolio performance measurement.

12.00
Unit I: 
Introduction to Portfolio Management:

Introduction to Portfolio Management: Meaning , process. Diversification: concept, effect, types, Correlation between securities.
Quantification of portfolio risk and return: Return of portfolio, risk of portfolio, standard deviation of portfolio, correlation coefficient.
Beta estimation: concept, assumptions, calculation of beta- single security and portfolio, utility of beta.

12.00
Unit II: 
Capital Market Theory:

Capital Market Theory: concept, assumptions.
Capital Asset pricing model: concept, Aspects of CAPMF, assumptions, capital market line, security market line. Benefits and Limitation

12.00
Unit III: 
Arbitrage Pricing Model,

Arbitrage Pricing Model, Arbitrage mechanism, comparison of APT and CAPM, application of APT.
Portfolio Analysis: concept, Kinds of portfolios analysis- Traditional portfolio analysis and Mordern portfolio analysis.

12.00
Unit IV: 
Fundamental analysis:

Fundamental analysis: concept, objectives, approaches. Economic analysis- meaning. Economic forces. Industry analysis- approaches to industry analysis. Company analysis- Quality of Management, labour-relation management and location, pattern of existing shareholdings, growth record, size and ranking, earnings analysis, financial analysis.

12.00
Unit V: 
Technical Analysis:

Technical Analysis: Concept, assumptions, utility or significance, technical analysis v/s fundamental analysis.Theories of technical analysis- Dow Theory. Tools and techniques of Technical analysis- Price and volume charts, bar chart, Line chart, Point and figure chart.

Portfolio Evaluation: Meaning & Need of Portfolio Evaluation, Measures of Portfolio Return-Sharpe’s Ratio.

Essential Readings: 

• Investment Analysis and Portfolio Management, Prasanna Chandra, Tata McGraw Hill, 3rd Edition, 2009.
• V.K.Bhalla, Investment Management, 7th Edition, S. Chand & Co., New Delhi, 2000.
• Gordon J. Alexander, William F. Sharpe & Jeffery V. Bailey, Fundamentals of
Investments, Prentice Hall, India, 2003 edition.

Academic Year: 
2019-2020
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