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FM-01 INVESTMENT MANAGEMENT External Marks: 70 Internal Assessment: 30 Time: 3 Hours St int the students to the investment decisions related to financial assets, The basic objective of the course Is to acqual n t / the risks and the returns involved, to maxe them aware about the functioning of securities market alongside the theories and concepts involved in porttokc management. Course Contents % si Unit I: Concepts of investment- Financia’ anc non-financial forms of investment — Objectives of financial Security and non-security forms of investment — Sources of investment investment, investment methods ~ : information- Investment Instruments. Financial markets — primary and secondary markets — major players and instruments in secondary market - Functiomng 2 stack exchanges, trading and settlement procedures at NSE & BSE. Stock markets guidelines on primary & secondary markets. Steps in Investment Management. Unit II; Valuation of securities-bond and fixed income instruments valuation -bond pricing theorems, duration of bond and immunisation of interest risk, term structure of interest rate, determination of yield curves, valuation of equity and preference shares (Dividend capitalisation & CAPM). Analysis of risk & return, concept of total risk, factors contributing to total risk, systematic and unsystematic risk, default risk, interest rate risk, market risk, management risk, purchasing power risk. Risk & risk aversion. Capital allocation between risky & risk free assets- Utility analysis Unit Il: Fundamental analysis: concept & significance of economic analysis, industry analysis: introduction, need for industry analysis, alternative classification of industry, industry life cycle analysis, economic factors & industry analysis, SWOT analysis for industries. Company analysis - nature and style of management, key role of financial analysis, ratio analysis. Technical Analysis: Theory of Technical analysis, points and figures chart, bar chart, contrary opinions theory, confidence index RSA, RSI, Moving average analysis, Japanese Candlesticks. Efficient Market hypothesis (EMH), Asset pricing theories, CAPM & Arbitrage pricing theories. Unit IV: Modern portfolio theory ~ Asset allocation decision. Dominant & Efficient portfolio — simple diversification, Markowitz diversification model, selecting an optimal portfolio — Sharpe single index model. Determination of corner portfolio. Process of portfolio management — International Diversification. Portfolio analysis, optimal portfolio construction, sharp portfolio optimization, portfolio revision, portfolio evaluation: Jenson’s and Treynor’s performance Index. Portfolio revision -Active and passive strategies & formula plans in portfolio revision. Recommended Books 1. Zvi, Bodie, Kane, Marcus & Mohanti, “Investment”, Tata McGraw Hill, New Delhi. 2. Fischer, Donald E. and Jordan, Ronald J. , “Security Analysis and Portfolio Management”, PHI Reference Books 1. Chandra, Prasanna. “Investment Analysis and Portfolio Management”, TMH 2. Punithavathy, Pandian. “Security Analysis and Portfolio Management”, Vikas Publishing House, New Delhi. 3. Alexander, Sharpe, Bailley “Fundamentals of investment”, PHI, New Delhi 4. me VK, “Investment Management : Security Analysis and Portfolio Management”, Sultan Chand, New Delhi. Reilley & Brown, “Investment Analysis & Portfolio Management”, Thomson Learning Fuller, Russell J & Farrell, James L. “Modern Investment & Security Analysis”. McGraw Hill, New York. 7. Alexander, Jordan J & Bailey, Jeffrey V. “Investment Analysis & Portfolio Management”, Dryden Press, Thomson Learning, Bombay. au 
