Investment Analysis And Portfolio Management

                                                                             Syllabus

                                                                                                                MBA: 3T1

MODULE 1

FIXED-INCOME VALUATION: Introduction. Bond Prices and the Time Value of Money: Bond Pricing with a Market Discount Rate, Yield-to-Maturity, Relationships between the Bond Price and Bond Characteristics. The Maturity Structure of Interest Rates. Yield Spreads: Yield Spreads over Benchmark Rates, Yield Spreads over the Benchmark Yield Curve.

MODULE 2

EQUITY VALUATION – CONCEPTS AND BASIC TOOLS: Introduction. Estimated Value and Market Price. Major Categories of Equity Valuation Models: Present Value Models: The Dividend Discount Model; Background and Description of the Dividend Discount Model. The Gordon Growth Model, Multistage Dividend Discount Models. Multiplier Models: Relationships among Price Multiples, Present Value Models, and Fundamentals; The Method of Comparables; Illustration of a Valuation Based on Price Multiples; Enterprise Value. Asset-Based Valuation.

MODULE 3

PORTFOLIO RISK AND RETURN – PART I: The Concept of Market Efficiency, Forms of Market Efficiency, Random Walk Theory, Investment Characteristics of Assets: Return, Other Major Return Measures and their Applications, Variance and Covariance of Returns, Historical Return and Risk, Other Investment Characteristics. Portfolio Risk: The Concept of Risk Aversion, Portfolio of Two Risky Assets, Portfolio of Multiple Risky Assets, The Power of Diversification.

MODULE 4

PORTFOLIO RISK AND RETURN – PART II: Efficient Frontier and Investor’s Optimal Portfolio: Investment Opportunity Set, Minimum-Variance Portfolios, A Risk-Free Asset and Multiple Risky Assets, Optimal Investor Portfolio, Capital Market Theory: Portfolio of Risk- Free and Risky Assets, The Capital Market Line. Pricing of Risk and Computation of Expected Return: Systematic Risk and Non-systematic Risk, Calculation and Interpretation of Beta. The Capital Asset Pricing Model: Assumptions of the CAPM, The Security Market Line, Applications of the CAPM.

MODULE 5

PORTFOLIO MANAGEMENT – Specification of Investment Objectives and Constraints, Selection of Asset Mix, Formulation of Portfolio Strategy, Selection of Securities, Portfolio Execution, Portfolio Revision, Performance Evaluation, Portfolio and Mutual Fund. Performance Evaluation – Sharpe Ratio, Treynor Ratio, Jensen’s Alpha, Sortino Ratio and M2.