Investment Analysis Management. 9901366442. docx.docx

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Investment Analysis Management

Downloaded Data of Bank of Baroda and HDFC Bank from www.nseindia.com of last 11 years has been summarized as follows. You are required to analyze the data using appropriate statistical tools, interpret the results and provide necessary advice to the investors as research analyst.

CASE STUDY 2                                                                                                     (20 Marks)

Given below are the returns on the three stocks Supertex, Colourtex and Wivetex for a four year period. Compute the average returns, variance and standard deviation if a portfolio is constructed such that the stock has lowest standard deviation accounts for 50% of the funds, a stock having the next lowest standard deviation accounting for 30% and the third stock accounting for 20% of the funds.

In September 2006, Mafatlal Ltd. Paid 10% dividend and in October, 2006 Nataraj Ltd. Paid 30% dividend. On 31-3-2007, market price of shares of Mafatlal Ltd. And Nataraj Ltd. Were Rs.220 and Rs.290 respectively.

Pruthvi Hardware ltd. have been informed by their investment advisor that :-

1)     Dividend s from Mafatlal L Ltd. And Nataraj Ltd. For the year ending 31-03-2008 are likely to be 20% and 35% respectively.

You are required to

1)     Calculate the average return from the portfolio for the year ended 31-03-2007.

2)    Advice P Ltd. Of the comparative risk of two investments by calculating the standard deviation in each case.

CASE STUDY 4                                                                                                (20 Marks)

A) The following table provides details about three mutual fund portfolios. Find out the Sharpe, Treynor and Jensen Index and rank them. What are your suggestions to the investors?

1. The beta of Equity fund is higher than the Beta of Mid Cap fund but the returns are higher in Mid Cap Fund than Equity Fund. Do you agree with this statement? If yes, explain with reasonable examples.

2. The beta of Infra – Fund is the highest among all three fund but the returns is the lowest among all three fund. Explain with reasonable examples.

B) Share of HDFC and BANK of Baroda display the following returns over the past two years:-

1)     What is the expected return on a portfolio made up of 40% of Pepsi and 60% of Coca-Cola?

2)    What is the standard deviation of each share?

3)    What is the covariance of Share of Pepsi and Coca-Cola?

4)    What is the correlation coefficient?

5)    Interpret the results in each case and advice the investors for investment decision?

Investment Analysis Mgmt

1. What is the relationship between securitization and the role of financial intermediaries in the economy? What happens to financial intermediaries as securitization progresses?

 

2.  What are some advantages and disadvantages of top down various bottom up investing styles ?

3.  Give the examples of three financial intermediaries and explain how they act as bridge between small investors and large capital market of corporations?

4.  Why money market securities are sometimes referred to as Cash equivalents ?

5. If the offering price of an open end fund is Rs. 12.30 per share and the fund is sold with front end load of 5 % what its net asset value

6. The new fund had average daily assets of Rs. 2.2 billion last year. The fund sold Rs. 400 million worth of stock and purchased Rs. 500 million during the year. What was its turn over ration ?

7.  Suppose that borrowing is restricted so that the zero beta version of the CAPM holds. The expected return on the market portfolio is  17 % and on the zero beta portfolio it is 8 % what is the expected return on a portfolio with beta of 0.6 %.

8. Outline how you would incorporate the following in to the CCAPM

a. Liquidity b. Nominated assets ( Do you have to worry about labor income )

INVESTMENTS MANAGEMENT

Q1) Suppose that there are two closed-end mutual funds, A and B. Both trade at $8, where the net asset value per share is $10. Fund A is a terminated fund. (A terminated fund is a fund with a termination date, the date at which the assets are liquidated and distributed to the shareholders. Its termination date is in 1 year from now. Fund B is not a terminated fund.

a. Calculate the premium or discount corresponding to these two funds.

b. Suppose that the net asset value of both funds will increase to $12 one year from now.

Calculate the rate of return to the investor in Fund A for this year. Can you calculate the rate

of return corresponding to Fund B under these circumstances?

Q2) An ADR of Honda Motor is traded on the NYSE for $22. The exchange rate is 100 yen per

dollar. Suppose that Honda Motor is trading in Japan for 2,500 yen. How can you use this

information to make a profit? Explain.

Q3) Suppose a bond is sold for $1,000 and pays an annual interest rate of 10% on the par value,

which is also $1,000. The bond was issued 20 years ago and will mature in one week. You own

some of these bonds. The yield on these bonds suddenly goes way up, to 15%. Calculate your

loss. Explain your results?

Q4) Suppose a bond has a par value of $1,000 and a market value of $1,100. It is convertible into 40

shares of stock, and the current stock price is $26.

a. What is the conversion ratio?

b. What is the conversion price?

c. What is the conversion value?

Q5) Suppose you buy a stock for $100. You receive $4 as a cash dividend at the end of the year. The stock price at the end of the year is $95.

a. What is the rate of return on your investment?

b. What is the dividend yield as measured at the beginning of the year? At the end of the year?

Q6) The net asset value of a mutual fund is $12. The share price is $13.

a. Is it an open-end fund or a closed-end fund?

Calculate the premium or discount.

Q7) Bill buys a $1000 par value 10-year bond for $850. It pays $75 a year in interest. Calculate Bill’s yield to maturity on the bond using a financial calculator or software.

Q8) Alex holds a convertible bond with a market value of $1700. If the conversion ratio is 50 and the stock’s price is $39 per share, should he convert the bond or sell the bond?

Q9) Classify each of the following types of assets as either money market securities or capital market securities.

U.S. Treasury

notes __________ Commercial paper __________

Municipal bonds __________ Mortgages __________

Federal funds __________ Treasury bills __________

Eurodollars __________ Corporate bonds __________

Common stocks __________ Negotiable CDs __________

Q10) Arrange the following from earliest to latest:

Ex-dividend date

Declaration date

Payment date

Date of record

Q11) Bravo Company stock currently sells for $100 per share. Bravo’s board of directors’ has

declared a $1 per share dividend, and the ex-dividend date is tomorrow. Ignoring the effect of

any other new information, what would you expect to happen to the price of Bravo stock

tomorrow?

Q12) Jeff owns 300 shares of Cappa Company stock. Each share is worth $30. If the stock splits 3- for-1, how many shares will Jeff own? What will each share be worth? Reconsider the

preceding problem. How many shares will Jeff own, and what will each share be worth, if the

stock splits 5-for-2?

Q13) Forest Company has convertible bonds outstanding with a $1,000 par value and a 6% coupon. Forest’s common stock currently sells for $80 per share. The bonds’ conversion ratio is 20. Calculate the bonds’ conversion price and conversion value. Do you think the bonds’ conversion premium is large or small?

Q14) What is the difference between buying a call option and buying a futures contract? Distinguish among interest rate risk, price risk, and reinvestment rate risk for bondholders?

Q16) What are the advantages and disadvantages of investing in bonds?

Q17) A junk bond is trading for $800 and matures exactly 1 year from now at $1,000. There is no interest paid between now and maturity.

a. Calculate the yield to maturity on the bond.

How do you explain your results, knowing that the interest rate on government bonds is only

5% a year?

Q18) What is the P/E ratio, and how is it calculated?

Q19) Give an example of how futures are used to hedge financial price risk and to speculate on the direction of future prices.

Q20) The prices of the stock of Alamo Rent-A-Car and the S&P 500 index are as follows:

Year 1 2 3 4

Alamo $100 $114 $110 $112

S&P $300 $280 $240 $260

Is Alamo's stock a defensive stock? Why?

Q21) Divide the following assets into marketable and non-marketable assets: common stock, stamps, art, bonds, real estate, super computers, and mutual funds

Q22) You are considering opening up a department store or purchasing shares of stock in a national chain of department stores such as Dayton Hudson traded on the NYSE. Which of the two investments have a more flexible investment holding period? Which is more liquid?

Q23) Joe-Bob from L.A. decided to invest $950 (price) in a 12% semiannual, 3-year bond. What is the yield to maturity (internal rate of return, or IRR) if the par value is $1,000?

Q24) A bond is sold for $700 and matures in 5 years. It pays $20 at the end of each year. The par value is $1,000. Calculate the yield to maturity (IRR) on the bond using a calculator or

software.

INVESTMENTS ANALYSIS MANAGEMENT

Q1) Why would you expect securitization to take place only in highly developed Capital Market?

Q2) In what ways is preferred stock like long term debt? In what ways is it like equity?

Q3) What purpose does the NEAT system serve on the National Stock Exchange?

Q4) Would you expect a typical open-end fixed-income mutual fund to have higher or lower operating expenses than a fixed income unit investment trust? Why?

Q5) What are the advantages of the index model compared to the Markowitz procedure for obtaining an efficiently diversified portfolio? What are its disadvantage?

Q6) A successful firm like Infosys has consistently generated large profits for years? Is this a violation of the EMH?

Q7) Why do bond prices go down when interest rates go up?

Q8) What monetary and fiscal policies might be prescribed for an economy in deep recession?

Q9) In what circumstances would you choose to use a dividend discount model rather than a free cash flow model to value a firm?

Q10) Is a put option on a high-beta stock worth more than one on a low beta stock?

INVESTMENTS MANAGEMENT

1)      How securities are being traded in share market?

2)     What is the difference between mutual fund and other investment companies

3)     What is adjustable and non-adjustable capital?

4)     How finance statement analysis is being done from investor’s point of view?

What is the importance of security analysis?

      5 )  What are call options? Give in brief information about put option

      6)   What is the theory of active portfolio management ? How it is monitored?

     7 )  What are the different types of risks with regard to debt securities?

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International Trade.9901366442. doc.docx

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International Trade

1 Are the Indian companies getting impacted by the globalization? To what an extent international policies have influenced globalization?

2. What were the advantages and disadvantages of GATT ?

1.  To what an extent WTO-GATS Regime has influenced higher education in India?

2. Explain as to why FDI’S in manufacturing increases employment but in retail might have adverse effect on the jobs of many?

International Trade   

  

1. What is international Business? Explain nature of international business.
2. Explain theories of global trade and investments.
3. Explain political and technical environments in Europe and its effects on

          Global trade.

4. How does the cultural environment in a country affect on global trade? Explain with suitable example.
5. Explain the role of international strategic management.
6. Explain the significance of technology transfers in global trade.
7. Write a detailed note on international marketing.
8. Explain the role of international financial management in global trade.
9. What are the different ways of financing foreign trade?
10. What are different international strategic alliances? Explain with the help of examples.

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INTERNATIONAL MARKETING MANAGEMENT . 9902787224. doc.docx

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INTERNATIONAL MARKETING MANAGEMENT

Case-1 : The use of the marketing mix in product launch

Answer the following questions:

1. Describe what is meant by a business being ‘consumer led’.

2. What are the key parts of the marketing mix? Explain how each works with the others.

3. Explain why the balance of the marketing mix is as important as any single element.

4. Analyse the marketing mix for NIVEA VISAGE Young. What are its strongest points? Explain why you think this is so.

Case-2 : SWOT analysis in action at Škoda

1. What was the key weakness that Škoda was able to identify?

2. What strength did Škoda use to turn its brand weakness into an opportunity?

3. How has Škoda strategically addressed external threats?

4. What in your view are the important benefits of using a SWOT analysis

Case-3 : Marketing strategy for growth

1. What is the difference between primary and secondary research? Identify one example of primary and secondary research carried out by Wilkinson.

2. Explain why Wilkinson needed a marketing strategy to help them to grow.

3. Evaluate the benefits of the marketing campaign to Wilkinson.

4. Analyze how effective the marketing campaign was in helping Wilkinson respond to competitive pressures.

Case-4 : Extending the product life cycle

1. Using current products familiar to you, draw and label a product life cycle diagram, showing which stage each product is at.

2. Suggest appropriate aims and objectives for a small, medium and large business.

3. Consider the decision taken by Kellogg to opt for product development. Suggest a way in which it could have diversified instead. Justify your answer.

INTERNATIONAL MARKETING

1. How does a company decide whether it should enter international markets or not? Is it always beneficial to enter foreign markets? Can companies shun international markets and still survive?

2. What are the most critical factors that determine success in global markets? Explain those taking suitable examples.

3. Take a stand on the following:

A company should serve different country markets with standard offerings

OR

A company should serve different country markets with customized offerings Justify your stand.

Also advice how the company could take a decision on the above stated issue.

4. Discuss on the distribution structure that is used in a foreign market and indicate how does a company decide such a distribution structure?

 5. “To gain competitive advantage, a global company has to leverage its competencies from all the locations where it has operations”. Critically analyze this statement

6. Elaborate on the Marketing Mix decision with regard to an international Market. Substantiate your views by appropriate examples.

7. Briefly explain the term Global Brand? How does a brand attain the status of Global brand? Explain with suitable examples.

International Business

1. (a) What are the dimensions of international business?

(b) Discuss the factors that have led to the globalization of business.

2. Explain any two of the following:

(a) Factors on which ownership strategy depends in the context of international business.

(b) Barriers to overcoming organizational biases in the context of managing a multi-focal strategy.

(c) What are the different mechanisms adopted for coordinating subsidiaries by different MNEs? What is the need for flexibility?

3. (a) Explain the different Approaches to control in multi-national enterprises.

(b) It has been said that MNCs often introduce new efficiency oriented management practices. What can developing host country learn from the MNCs in this respect?

4. (a) What factors influence hybrid/mixed strategies involving partial rationalization of production and marketing facilities and partial local manufacturing?

(b) Briefly explain the stages in cross-cultural negotiation process.

5. Explain the following:

(a) MNEs and New International Economic Order

(b) Dynamics of regional trade groupings

(c) WTO and the promotion and regulation of world trade

International Business

1.       How could William H. Pickney acculturate himself in India?

2.      What lessons can Pinckney convey to similar other expatriates?

3. Where does the joint venture meet the needs of both the partners? Where does it fall short?

4. Why had ABB-PBS failed to realize its technology leadership?

5. What lessons one can draw from this incident for better management of technology transfers?

1.   Why has the late corner’s strategy’ of Toyota failed in China, though it succeeded  

      in India?

     2.    Why has Toyota failed to capture the Chinese market? Why is it trailing behind

             its  rivals

     1)    Is gross domestic product per capita a useful indicator of international

             competitiveness in the EU?

     2)   Is it fair to point the blame for the EU’s poor international competitiveness at

             inflexible labor markets, regulated goods and services markets, and a general ]             

             lack of competition? What  alternative explanations might be suggested? What

              appears to be the problem with the EU’s banking sector?

     3)  Is the number of patents registered a useful indicator of superior international

          competitiveness?  Why do you think the USA does well in this area?

    4)   Should the EU consider more targeted intervention in the form of subsidies or

           strategic trade policy?

    1.    What lessons can other MNCs learn from the experience of McDonald’s?

    2.   Aware of the food habits of Indians, why did McDonald’s err in mixing beef extract

         in the oil used for fries?

   3.   How far has McDonald’s succeeded in strategizing and meeting local cultures and

          needs?

International Business

1.} Select an MNC and an Indian firm. Compare and contrast the strategies they formulate, they

implement and the successes or failures they have come across.

2.} Select one MNC and one domestic firm. Study their organization structures. What similarities and dissimilarities do you notice between the two?

3.] Place yourself as the financial officer of a company based in Delhi. Your company wants to set up operations in Dubai but lacks adequate finance to do so. You have several options before you for raising the necessary finance. List the advantages and disadvantages of each option and suggest which options you finally choose.

4.} Study the export procedure followed in old economy firms and compare the procedure with the one followed in software firms in BPO industry.

5.} If you are asked to go on a foreign assignment and are given options of different countries, which country do you prefer and why?

6.} Study why SAARC countries have not been able to make any progress towards economic integration.

7.} Identity at least five Indian companies which are supposed to be ethical in their deals. Collect their balance sheets for a period of ten years. Study their profitability over the decade. See whether the statement that “most successful companies are also ethical firms” is true or false.

8.} Select a neighboring country and study what type of political and legal environments exist there. Study also the impact of these environmental factors on business in that country.

International Business

1)      Was Global Bank, Pune Branch correct in its argument, as the credit issuing bank?

2)     Was the stand taken by The American Bank, New York correct, as the negotiating bank?

3)     Elaborate the deficiency of service on the part of the bank, pointed out by the National consumer redressed forum, in the light of the uniform rules for collection ICC publication No.522.

4)     Advise the firm about the precautions they should have taken to avoid such a colossal business loss.

5)     Discuss the remedial measures the bank in India should take to avoid such damaging judgments by the consumer forums.

6)     Elaborate the Supreme Court judgment in the context of the international banking rules and practices, as guided by the ICC publications.

7)     Why has the late corner’s strategy’ of Toyota failed in China, though it succeeded in India?

8)    Why has Toyota failed to capture the Chinese market? Why is it trailing behind its rivals?

1)      Is gross domestic product per capita a useful indicator of international competitiveness in the EU?

2)        Is it fair to point the blame for the EU’s poor international competitiveness at inflexible

       labor markets, regulated goods and services markets, and a general lack of competition? What alternative explanations might be suggested? What appears to be the problem with the EU’s banking sector?

3)        Is the number of patents registered a useful indicator of superior international

       competitiveness? Why do you think the USA does well in this area?

4)        Should the EU consider more targeted intervention in the form of subsidies or strategic

       trade policy?

1.     What lessons can other MNCs learn from the experience of McDonald’s?

2.    Aware of the food habits of Indians, why did McDonald’s err in mixing beef extract in the oil used for fries?

3.    How far has McDonald’s succeeded in strategizing and meeting local cultures and needs?

WE PROVIDE CASE STUDY ANSWERS, ASSIGNMENT SOLUTIONS, PROJECT REPORTS AND THESIS

aravind.banakar@gmail.com

ARAVIND - 09901366442 – 09902787224