Security Analysis

Paper Code: 
MFM 127
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

Course Objective:

The objective of this subject is to acquaint the students with the basic   knowledge of Security market.

Course Outcomes (COs):

Course

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies

PAPER CODE

Paper Title

MFM 127

Security Analysis

CO 37: Understand about various investment avenues.

 

CO 38 : Develop an understanding of the conceptual framework for security analysis.

 

CO 39: Recognize the functions and constituents of depository system.

 

CO 40 : Overview of investment environment and risk return evaluation framework.

 

CO 41:        Application of equity analysis tools for valuation and security selection.

CO 42: Develop an understanding about bond fundamentals and their applications in   valuations.

 

Approach in teaching:

Interactive Lectures using whiteboards, Discussion, Tutorials, Reading assignments, Demonstration, Team teaching, Quiz.

 

 

Learning activities for the students:

Self-learning assignments, Effective questions, Solving problems of unsolved questions, Problem based learning-cases, Group learning teamwork, Giving Tasks.

Class test, Semester end examinations, Quiz, Solving problems in tutorials, Assignments, Presentation, Individual and group projects
 

 

 

 

12.00
Unit I: 
Investment Scenario & Investment Avenues

 

Investment Scenario: Concept of Investment, Need for investment, Investment objectives, Investment constraints, Factors affecting investment decision, Investment decision process, Types of Investment.

Investment Avenues: Security form of investments: Equity Shares, preference shares, debentures and government securities. Comparison of various investment options on the basis of risk, return, marketability. Types of government securities, Introduction to non- security form of investments.

 

12.00
Unit II: 
Introduction to security market:

 Functions, components. New issue market: functions, advantages and disadvantages, methods of raising capital in new issue market: Public issue, offer for sale, private placement, right issues, preference issues.

 

12.00
Unit III: 
Depository System & Listing of securities

Depository System: Concept, functions , constituents of Depository System, Dematerialization, Trading and Settlement procedure, freezing of shares in DMAT account, advantages of depository system.
 

Listing of securities: Concept, classification, advantages, disadvantages, listing requirement, procedure for listing of securities.

12.00
Unit IV: 
Risk and Return and Equity valuation model:

Risk and Return: Concept of Risk, total risk and its components. Concept of Return, Measurement of risk and Return, risk and return relationship . Risk aversion and risk premium.

Equity valuation model: Valuation methods- dividend yield method, earning yield method, return on capital employed method, price/ earnings method. Discounted cash flow valuation method- discounted dividend

model, discounted cash flow model, discounted internal rate of return model.

 

12.00
Unit V: 
Bond valuation model:

 Types of bonds, valuation of bonds- coupon rate, current yield, spot interest rate, yield to maturity, yield to call. Bond prices, Bond Duration and risk associated with bonds

 

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.
  • Preetam Singh, Investment Management, 9th edition, Himalaya Publishing House, New Delhi 2000.
  • Prasanna Chandra, Managing Investments, Tata McGraw Hill, 2002 e
Academic Year: 
2021-2022
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