Master of Business Administration
MBA Semester IV
Financial Management Specialization
FM-05:Investment Analysis and Portfolio Management
Marks: 100 Duration: 60 Hrs.
CREDITS: 4
Objectives: Investment Analysis and Portfolio Management is a growing field in the area of finance.
This module aims at creating a better understanding of the various concepts/principles related to
investment analysis and portfolio management.
Course Outcomes:The successful completion of this course shall enable the student to:
CO1: Analyse and evaluate the investment environment, different types of financial investment
instruments and financial institutions.
CO2: Evaluate the risk and expected return of various financial instruments and investment
portfolios; implement in practice the quantitative methods of investment decision making.
CO3: Analyse and evaluate the fair value of stocks and bonds, explain the main factors affecting the
values.
CO4: Comprehend and assess the efficiency of portfolio management; use Excel's software skills
during investment analysis and portfolio management calculations and researches.
CO5: Understand and apply the principles of portfolio theory in the process of investment portfolio
management and performance.
UNIT CONTENT HOURS
I Introduction to Investment Environment: Introduction of Investment, 11
Investment Process and instruments, Criteria for Investment, Types of Investors,
Investment vs. Speculation vs. Gambling, Investment Avenues, Factors
Influencing Selection of Investment Alternatives.
Investment environment: Investment vehicles, Financial markets: Primary &
Secondary market, Understanding the difference between investment and
financing decisions, Direct versus indirect investment.
II Quantitative Methods of Investment Analysis : 11
Investment income and risk : Meaning, Return on investment and expected rate
of return, Types of Risk–Systematic and Unsystematic Risk
Measurement of Beta, Standard Deviation, Variance, Reduction
of Risk through Diversification, Practical Problems onCalculation of Standard
Deviation, Variance and Beta.
Psychological aspects in investment decision making :Overconfidence,
Disposition effect, Perceptions of investment risk, Mental accounting and
investing.
III Securities Valuation and Analysis: Overview and characteristics of securities, 11
Valuation Models, Understanding of fair valuation, over valuation and
Undervaluation, active and passive strategies.
Fixed Income Securities: features, bond indentures and covenants, types
(Government & Private bonds), Fixed& variable coupon securities
Security Analysis Fundamental Analysis, Economic Analysis, Industry
Analysis, Company Analysis, Technical Analysis, Market interest rates analysis.
IV Portfolio Management: Meaning and Concept, Portfolio Management Process, 11
Objectives, Basic Principles, Factors Affecting Investment Decisions in
Portfolio Management, Portfolio Strategy Mix.
An Introduction to Derivative Markets and Securities:
Forward and Futures Contracts, Option Contracts, Swap Contracts, Convertible
Securities, and Other Embedded Derivatives
V Theories and Portfolio Performance Measurement : 11
Portfolio Theory : Markowitz portfolio theory, The expected rate of return and
risk of portfolio
Capital Asset Pricing Model, Arbitrage Price Theory, Market Efficiency
Theory
Portfolio Performance Measurement: Meaning of Portfolio Evaluation,
Sharpe’s Ratio (Basic Problems), Treynor’s Ratio (Basic Problems), Jensen’s
Differential Returns (Basic Problems).
Group learning exercises involving discussion, role-play and presentation 05
by students. Dealing in Stock market
TOTAL 60
Readings
1. Investment Analysis & Portfolio Management; Prasanna Chandra: McGraw Hill Publications
2. Security Analysis & Portfolio Management; Dr. F.C Sharma: SBPD Publications
3. Investment & Portfolio Management; DivyaBhutani: Rajat Publications
Additional Readings: (Unit Wise)
Unit –I:Investment Analysis and Portfolio Management, Frank Reilly, Keith Brown, South Western
College Pub; 10th edition
Investments, ZviBodie, Alex Kane, Alan J. Marcus, McGraw-Hill/Irwin; 10th edition
Unit – II:Risk-Return Relationship and Portfolio Management, Raj S. Dhankar, Publisher: Springer,
New Delhi
Unit- III:Fischer, Donald E, and Jordan, Ronald J. Security Analysis and Portfolio Management, 6th Ed.,
New Delhi, Prentice Hall of India, 1995.
Unit- IV:Managing Investment Portfolios: A Dynamic Process 3rd Edition by John L. Maginn,
Donald L. Tuttle, Dennis W. McLeavey, Jerald E. Pinto
Unit – V:Modern Portfolio Theory and Investment Analysis, 9th Edition 9th Edition, by Edwin J.
Elton, Martin J. Gruber, Stephen J. Brown, William N. Goetzmann
Pedagogy:
ICT enabled Classroom teaching
Case study
Practical / live assignment
Interactive classroom discussions
Flipped classroom
Teaching Plan:
At the beginning of each semester faculty teaching the course will provide (i) Teaching
Plan, (ii) updated reading list, and (iii) the list of case studies for uploading on Department
website.
Facilitating the achievement of Course Learning Outcomes
Unit Course Learning Outcomes Teaching and Assessment Tasks
No. Learning Activity
I Ability to analyse and evaluate the Class participation,
investment environment, different Lecture/Video/ Case/ Presentation, Viva/ test,
types of financial investment Presentation Case Study
instruments and financial institutions.
II Ability to evaluate the risk and Class participation,
expected return of various financial Lecture/Video/ Case/ Presentation, Viva/ test,
instruments and investment portfolios; Presentation Case Study
implement in practice the quantitative
methods of investment decision
making.
III Ability to analyse and evaluate the fair Lecture/Video/ Case/ Class participation,
value of stocks and bonds, explain the Presentation Presentation, Viva/ test,
main factors affecting the values. Case Study
IV Ability to comprehend and assess the Lecture/ Case/ Class participation,
efficiency of portfolio management; Industry Expert Presentation, Viva/ test,
Use Excel's software skills during interaction Case Study
investment analysis and portfolio /Presentation
management calculations and
researches.
V Ability to understand and apply the Lecture/ Industry Class participation,
principles of portfolio theory in the Expert interaction/ Presentation, Viva/ test,
process of investment portfolio Presentation Case Study
management and performance.
