ENTREPRENEURSHIP AND MANAGEMENT PROCESSES INTERNATIONAL, New Delhi End Semester Examination, October-2010 PGDM- Semester-III SECURITY ANALYSIS

& PORTFOLIO MANAGEMENT Max Marks: 60 Roll No. Instruction: Write your roll no. in the space provided. Nothing else should be written on the question paper. Writing on Question paper will fetch you negative marks. Section A (Total Marks: 20) Answer any two questions. All questions carry 10 marks each. 1. T+1 settlement is not feasible in the current scenario. Discuss the current settlement process in details. 2. Circuit filters are not applicable on 202 stocks. Explain the concept of circuit filters and its impact on the market. 3. Explain the dematerialization process. Section B (Total Marks: 15) Write short notes on any three. All questions carry 5 marks each. 1. 2. 3. 4. 5. CDSL Pay-out Obligation ETFs NEAT Valuation Debit Max Time: 3hrs

Section C (Total Marks: 25) All questions are Compulsory. 1. Following are the different limit orders for buy and sell for Hindustan Lever Ltd. as on June 9, 2010 before 9:45 A.M.: No. Quantity Price (in Rs.) 1 2 3 4 5 6 7 8 9 10 4570 1760 6824 26009 1 1 250 541 12 1011 187.75 187.80 188.00 187.55 188.05 188.15 187.60 188.10 187.70 188.20 Buy Buy Sell Buy Sell Sell Buy Sell Buy Sell

You are required to a.Arrange the above limit orders and prepare the order book as displayed on the screen. [9]

2. An investor, Mr. Singh, is evaluating the prospects of investing in two stocks viz. Infosys & Ranbaxy. He has estimated the returns associated with the stocks and also the returns associated with the market Index based on the subjective probability approach. His estimates are as follows: Economic Scenario Boom Growth Stagnation Slump Probability 0.45 0.25 0.20 0.10 Infosys 43% 23% 18% 8% Returns associated with Ranbaxy Market Index 34% 26% 27% 10% 16% 3% 4% -6%

The risk-free rate of return can be assumed as 9% You are required to calculate the a. b. c. d. e. Expected Risk & Returns of Infosys, Ranbaxy & Market Ex-ante beta for Infosys and Ranbaxy. Excess returns provided by Infosys & Ranbaxy and interpret them. Proportions of Systematic & Unsystematic risk for Infosys & Ranbaxy. Recommend Mr. Singh an appropriate course of action. [10] 3. An entrepreneur is planning an investment in electronic goods industry. The relevant data is as under: Estimated industry sales Estimated market share of the company Estimated net profit margin of the industry Estimated operating profit margin of the company Estimated net profit margin of the company Number of outstanding shares of the company Rs.4000 crore 3% 17% 25% 15% 3 crore

Assuming no outstanding preference shares, the forecast value of the EPS for the company will be [6]