Investment Analysis and Management

Syllabus

Course Code: 3.3.3

INVESTMENT ANALYSIS AND MANAGEMENT

Module 1: Basics of Investments                                      6 Hours

Investments – Meaning. Differences between Investment, Trading and Speculation. Process of Making and Managing Investments. Investment Goals and Constraints.

Module 2: Investment Alternatives                                   6 Hours

Non-Marketable Financial Assets, Money Market Instruments, Fixed Income Securities, Equity Shares, Mutual Funds, Derivatives, Life Insurance Policies, Real Estate, Precious and Valuable Items.

Module 3: Stock Selection and Portfolio Construction   10 Hours

Stock Selection: Fundamental Analysis – Economy Analysis, Industry Analysis, Company Analysis and Stock Valuation. Technical Analysis. Efficient Market Hypothesis. Portfolio Construction: Calculation of Return and Risk, Decomposition of Risk. Portfolio Construction Theories –Markowitz Theory, Sharpe’s Single Index Model, Capital Asset Pricing Model, Arbitrage Pricing Theory.

Module 4: Bonds                                                               12 Hours

Pricing of Bonds, Returns on Bonds, Risks Associated with Bonds, Duration and Modified Duration. Bond Portfolio Construction – Immunization Strategy

Module 5: Mutual Funds                                                    8 Hours

Mutual Funds – Net Asset Value. Mutual Fund Returns. Selection Criteria – Sharpe’s Measure, Treynor’s Measure, Jensen’s Measure.

Module 6: Portfolio Evaluation and Revision                   6 Hours

Selection Criteria: Performance Evaluation- Sharpe’s Performance Index, Treynor’s Performance Index and Jensen’s Measure to Identify the Predictive Ability, Evaluation of Mutual Fund. -NAV Method, Portfolio Revision Methods- Investment Timing, Formula Plans Constant Dollar Value Plan, Constant Ratio Plan, Variable Ratio Plan