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Syllabus

SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT - BFIB441B

Course Information

Department Business and Management (BGR)
Course Code BFIB441B
Total Teaching Hours/Sem 60
Lecture Hours/Week 4
Max Marks 100
Credits 4

Course Description

This course covers the basics of investments, including avenues of investments from individual and corporate perspectives, fundamentals of investments in securities, risk-return analysis, valuation of securities, fundamental and technical analysis, and portfolio theory, construction, evaluation, and revision.

Course Objectives

  • Familiarize learners with various investment avenues.
  • Teach risk-return analysis for equity shares of companies.
  • Enable learners to carry out fundamental and technical analysis.
  • Facilitate students in valuation of equity shares and bonds/debentures.
  • Teach how to construct, evaluate, and revise a portfolio.

Course Outcomes

  1. CO-1: Differentiate between various investment avenues.
  2. CO-2: Perform risk-return analysis for equity shares.
  3. CO-3: Carry out fundamental and technical analysis.
  4. CO-4: Compute the value of equity shares and bonds/debentures.
  5. CO-5: Construct, evaluate, and revise equity share portfolios.

Units Overview

Unit 1: Introduction to Investment and Investment Avenues (Teaching Hours: 10)

  • Meaning of Investment
  • Comparison between Savings, Investment, Speculation, and Gambling
  • Objectives of Investment
  • Factors Influencing Investment Decisions
  • Steps and Process of Investment
  • Investment Alternatives and Avenues
  • Real Assets and Financial Assets
  • Investment Attributes (Risk, Return, Security, Marketability, Liquidity, Convenience)

Unit 2: Risk and Return Analysis (Teaching Hours: 10)

  • Meaning and Concept of Risk and Return
  • Computation of Return
  • Concept of Total Risk
  • Factors Contributing to Total Risk
  • Systematic and Unsystematic Risk
  • Measurement of Risk
  • Standard Deviation, Coefficient of Variation and Beta
  • Use of Beta in Estimating Returns
  • Concept and Calculation of Covariance, Correlation Coefficient

Unit 3: Modern Portfolio Theory (Teaching Hours: 10)

  • Return on Portfolio
  • Risk of Portfolio
  • Portfolio Theory and Approaches
  • Markowitz Efficient Frontier
  • Capital Asset Pricing Model
  • Single Index Model
  • Arbitrage Pricing Theory
  • Capital Market Line and Security Market Line
  • Portfolio Construction, Evaluation
  • Sharpe's Ratio, Jensen's Alpha, Treynor's Ratio
  • Portfolio Revision

Unit 4: Security Analysis (Teaching Hours: 8)

  • Fundamental Analysis: Company, Industry, and Economy Analysis
  • Technical Analysis of Stock
  • Points and Figures Chart
  • Bar Chart
  • Indicators and Oscillators: ROC, RSI, Volume of Trade, Support and Resistance Level, Exponential Moving Average Analysis, MACD, Japanese Candlesticks

Unit 5: Valuation of Securities (Teaching Hours: 8)

  • Meaning and Concept of Value and Valuation
  • Factors Influencing Value and Valuation
  • Methods of Equity Valuation
  • Intrinsic Valuation Approach (Discounted Cash Flow Method: Dividend Capitalization Model and Earnings Capitalization Model)
  • Relative Valuation Approach: Multiplier Method
  • Efficient Market Theory
  • Behavioural Finance
  • The Irrational Influences

Unit 6: Bond Valuation and Analysis (Teaching Hours: 8)

  • Meaning, Characteristics, and Types of Bonds
  • Bond Returns
  • Concept of Yield
  • Current Yield
  • Yield-to-Maturity
  • Yield-to-Call
  • Price-Yield Relationship
  • Bond Valuation

Unit 7: Portfolio Management and Evaluation (Teaching Hours: 6)

  • Specification of Investment Objectives and Constraints
  • Selection of Asset Mix
  • Formulation of Portfolio Strategy
  • Selection of Securities
  • Portfolio Execution
  • Portfolio Revision
  • Evaluation of Portfolio
  • Sharpe's Ratio, Jensen's Alpha, Treynor's Ratio
  • Portfolio Revision

Essential References

  • Punitavathi Pandian (2013), Security Analysis and Portfolio Management, New Delhi: Vikas Publications.
  • Avadhani, V.A. (2013). Security Analysis and Portfolio Management, New Delhi: Himalaya Publications.
  • Bhalla, V.K. (2013). Investment Management. New Delhi: S. Chand.
  • Fischer D.E. (2012). Security Analysis and Portfolio Management. Pearson Education.
  • Madhumati, R.M. (2012). Investment Analysis and Portfolio Management. New Delhi: Pearson Education.

Evaluation Pattern

Component Marks
CIA1 20
CIA2 25
CIA3 20
Attendance 5
ESE 30

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See Complete Syllabus

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