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Security Analysis & Portfolio Management V3

Assignment A
1 . Enumerate the basis principles of Technical Analysis?
2 . Discuss some recent trends in NSE? Explain the functions of NSDL?
3 . Discuss the steps involved in the process of book building?
4 . Discuss some prominent features of an investment program?
5 . Discuss the steps involved in the process of book building?
6 . Describe the concept of Industry Life Cycle?
7 . How does reverse book building works?
8 . How would you classify shares into growth, cyclical and defensive?

Assignment B

Case Detail :
Shareholders Guide
With gold and shares being the most sought after investment arena for Indian
investors, how can a beginner invest in shares? Well here is a guide to get started
in Share market investment in India. Just stand in a crowd and utter the words aaj
market kaisa hai? (how is the market today?), and there will be opinions pouring
in from all directions. The best part is that even people who have never ever
invested in shares will have strong opinions and even tips at times for how to
invest in share markets. So if you are someone who simply does not want to stand
and give tips without doing anything and wants to actually invest in share markets
in India, then here is how to get started with share market investment in India.
Here is a 6 step guide to help you out.

1. Get a PAN Card: PAN or Permanent Account Number is a primary requirement for
entering any financial transactions in our country. It is unique 10 digit Alpha-
Numeric number assigned to an individual by the Tax Authorities for assessing their
tax liabilities. PAN is however required for opening a bank account, investing in
mutual funds, filling Income Tax returns etc. Also the first thing you will need to
be able to invest in shares in India is a PAN card, so get it first.

2. Get a Broker: You and I cannot directly go the stock exchange and buy or sell
stocks/shares like we would buy or sell any other thing. People are authorized to
buy and sell on the markets and they are called brokers. Brokers can be individuals
or companies and even online agencies that are registered and licensed by SEBI or
Securities and Exchanges Board of India, who regulates the share markets. Get a
broker, they can be individuals you know and are reliable, or you can approach
various companies that are licensed to trade and deal in securities in the markets.

3. Get a Demat and Trading Account: Once you have a broker, whether in form of a
person, company or online, you will now need a Demat and Trading account. Demat
account will hold the stocks or shares in your name and the same will reflect in
your stock portfolio. You cannot hold shares in physical form or store them
physically. They have to in Dematerialized state or Demat state. A Demat account
does that for you. It will store the shares you buy from the markets through your
brokers in your account in your name. The selling will also be from here and it
will reflect in your Demat statements that you receive from time to time. You will
never have a physical share certificate in your hands; it will be reflected in your
Demat Account Statement.

The buying and selling of shares you wish to have or want to sell will however
require a Trading account. Trading account will be like an intermediary who
facilitates the buying and selling. Usually your broker takes care of all this.
Whether you approach an individual broker, a broking firm or online agencies, the
Demat and Trading accounts will be opened simultaneously as it is one without the
other is useless for investing in shares in India.

4. Depository Participant: There is also a Depositary Participant that you need to

be aware of. There are two depositories in India: NSDL and CDSL which stands for
National Securities Depository Limited and Central Depository Services Limited.
These two have their agents in the form of Depository Participants who will provide
an account to store the shares you hold. It is not the same as Demat and Trading
account as in Demat it shows the number shares you hold and the Trading reflects
the buying and selling that has taken place in your account. Depository
Participants will hold those shares you bought and release the shares you sold.
However, it is usually taken care of by the broker who will also guide you through
the Demat, Trading account opening process as well as register with a Depository.
But you need to be aware of it none-the-less.

5. UIN if you want to invest BIG: UIN or Unique Identification Number is required
in case you trade for Rs. 1,00,000 or more at a single time. If you plan to go BIG
in share markets, UIN is needed. Otherwise, for regular investors it is not
required.

6. Buying and Selling: For buying or selling shares, you need to inform your broker
about which share in what quantity you wish to buy at which price. For example if
you wish to buy 10 shares of Reliance Industries Ltd when it reaches a price of Rs.
885, you have to inform the same to you broker; Share: Reliance Industries Ltd.
Quantity: 10, Price: 885. In case of online broker too, they usually have customer
care numbers where you can place your order if you do not have access to the
internet at that point. When the share reaches that price, transaction will be made
on your behalf. Same is done in case of selling, for example Sell: Reliance
Industries Ltd, Quantity: 3, Price: 895. The sell order will be processed when the
share reaches that price. However the buy and sell orders remain valid only up to a
certain time, usually the same day or the next. Your broker will inform you of the
same. If during that time frame the buy or sell price is not reached, the order is
cancelled and you need to place a new order.
Answer Section
Q.No 1: What the case is all about?

Q.No 2: What are the varios requirments for investing in share market?

Q.No 3: What are the learnings you would like to discuss with potential buyers?

Assignment C

1. Liquidity risk is associated with secondary market transactions.

TRUE
FALSE
Cant Say
Sometimes
2. Trustee is a self-governing organization that operates as bondholders
Broker
Representative
Gaurdian
Gurantee
3. A price weighted index is an arithmetic mean of . Prices.
current
furure
quarter
None
4. Dalal Street is in . City.
Delhi
Jaipur
Kolkatta
None
5 Financial hazard is most related with use of financing by corporations.
Equity
Debt
Private
Loan
6. Bondholders usually accept interest payments each . Months.
3
6
9
12
7. Ambiguity introduced by way by which organization finances its investments is
. Risk.
Monetary
Credit
Financial
Country
8. Standard deviation determine .. risk of security.
Systematic
Unsystematic
Premium
Total
9. A corporate bond is a corporations write undertaking that it will refund a
specific amount of money plus
Premium
Interest
Nothing
Security
10. When the investment banker bears the risk of not being able to sell a new
security at the established price, this is known as .. .
Arbitrage
FPO
Underwriting
Possession
11. A best efforts offering is sometimes used in connection with a . of new,
long-term securities.
Public Issue
Private Issue
Bonus Issue
Collected Issue
12. Rule permits what is known as a shelf registration.
413
414
415
416
13. As per practice, reservation for retail investors in 100% book building process
is only .%.
5
35
25
15
14. Ranking of issues is done under following technique?
Probability Impact Matrix
Traditional Matrix
Modern Matrix
Compatible Matrix
15. Which is not the filter criterion to rank various issues?
Actionality
Criticality
Urgency
Merging
16. It has beeen noticed that in . City there is much concentration of merchant
bankers.
Delhi
Mumbai
Hyderabad
Chandigarh
17. Wide network of . all over India and abroad is required for successful
marketing of public issues.
Merchant bankers
Underwriters
Banks
Postal offices
18. NASQAQ stands for National Association of Securities Dealers .. Quotations
American
Australian
Automated
Automatic
19. Which of the following is not a method a firm can use to publicly issue common
stock?
Private Placement
Publicity
Public Placement
Correlation
20. Which of the following is not a method a firm can use to finance their long-
term needs externally?
Company Earnings
Accounted Earnings
New Earnings
Retained Earnings
21. FPO stands for follow on offer.
Private
Public
Public-private
partnership
22. If an investment banker has agreed to sell a new issue of securities on a best-
efforts basis, the issue results in no assumption of underwriting risk by the
. .
BOD
Government
Investment Banker
Underwriter
23. Role of merchant bankers
M&A
Project Councelling
Forming Joint Ventures
All
24. Formal merchant banking activity in India was originated in______.
1979
1969
1989
1999
25. The early growth of merchant banking in the country is assigned to the
________.
FEMA
FERA
Securities Act
IT Act
26. A Merchant bank is a financial institution conducting money market activities
and . .
Lending
Investment Service
underwriting
All
27. Issues identification is more important than it is in the approach.
Conventional
Modern
Traditional
Classical
28. What happens, according to the text, to the average common stock price
immediately after the announcement of a new equity issue by a publicly traded firm?
Fall
Stable
Increase
No Change
29. NYSE stands for Stock Exchange.
New-York
New Delhi
New Zeeland
Nariman Point
30. If the market price of a stock rights-on is $50 a share, the subscription
price is $40 a share, and it takes nine rights to buy an additional share of common
stock, the theoretical value of a right when the stock is selling rights-on is
how much?
$5
$4
$2
$1
31. The __________ is a disclosure document filed with the SEC in order to register
a new security and includes the prospectus and other SEC required information.
Prospectus
Registration Document
Line Document
Straight Document
32. Who earn a spread based on the difference between the purchase price from
the firm and the sales price to investors of the securities being underwritten.
International Bankers
Merchant Bankers
Investment Bankers
indian Bankers
33. Disinvestment is normally done for shares.
Private
Public
Bonus
All
34. Capital Market Line is firstly initiated by .
Adam
Sharpe
Martkowitz
Linterr
35. NSE stands for . Stock Exchange?
New Delhi
Nagpur
National
New york
36. Internal Trends depict .
Strengths
Weaknesses
None
Both
37. FTD stands for trading day.
First
Foremost
Future
Fast
38. NIFTY and DSE belong to .
China
India
Japan
USA
39. UTI stands for Trust of India.
United
Unit
Union
Unversal
40. Debentures are issued by . Companies.
Public
SMEs
Private
Financially Sound

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