SECTION A: INVESTMENT DECISIONS [25 MARKS] 1. Investment Decisions, Project Planning and Control (i) Estimation of project cash flow (ii) Relevant cost analysis for projects (iii) Project appraisal Methods – DCF and Non-DCF Techniques (iv) Capital Rationing (v) Social Cost Benefit analysis
2. Evaluation of Risky Proposals for Investment decisions (i) Investment decisions under uncertainties (ii) Effect of Inflation on Capital Budgeting Decisions (iii) Sensitivity Analysis, Certainty Equivalent Approach, Decision Tree Analysis, Standard Deviation in Capital Budgeting, Risk Adjusted Discount Rate, Options in Capital Budgeting
3. Leasing Decisions (i) Lease Financing – Evaluation of Lease vs Buy options (ii) Break-Even Lease rental determination (iii) Cross Boarder leasing, Sale and Lease back
SECTION B: FINANCIAL MARKETS AND INSTITUTIONS [20 MARKS] 4. Institutions in Financial Markets (i) Reserve Bank of India, Commercial Banks, NBFCs (ii) Insurance Companies, Pensions Funds.
5. Instruments in Financial Market (i) Money Market Instruments - Call money, Treasury Bills, Commercial Bills, Commercial Paper; Certificate of Deposits, Repo, Reverse Repo and Promissory Notes, Government Securities, Bonds, valuation of Bonds, Price Yield relationship. (ii) Hedge Funds (iii) Mutual Funds – Computation of NAV and Evaluation of Mutual fund’s Performance
6. Capital Markets (i) Primary and secondary markets and its instruments (ii) Optionally convertible debentures, Deep discount bonds (iii) Rolling settlement, Clearing house operations (iv) Dematerialization, Re-materialization and Depository system (v) Initial Public Offering (IPO) / Follow on Public Offer (FPO) ; Book Building (vi) Insider trading (vii) Credit rating - Credit rating agencies in India
7. Commodity Exchange (i) Regulatory Structure, Design of markets (ii) Issues in Agricultural, Non-Agricultural Markets, Product design, Spot price and present practices of commodities exchanges (iii) Intermediaries in the commodity exchanges & Clearing house operations, risk management related issues (iv) Commodity Options on futures and its mechanism
SECTION C: SECURITY ANALYSIS & PORTFOLIO MANAGEMENT [25 MARKS] 8. Security Analysis & Portfolio Management including Equity Reserarch (i) Security analysis- Fundamental analysis- Economic analysis, Industry analysis, Company analysis, Technical analysis, Momentum analysis - arguments and criticisms (ii) Market indicators, Support and resistance level, Patterns in stock price (iii) Statistic models – Moving Averages, Bollinger bands (iv) Theories on stock market movements – Dow Jones Theory (v) Portfolio Management – meaning, objectives and basic principles (vi) Portfolio Management theories – Efficient Market Hypothesis, Markowitz Model, Random Walk theory, CAPM, APT, Sharpe Index (vii)Portfolio Management – Construction of a Portfolio, Computing the Portfolio Total risk, Classification of risk into systematic and unsystematic, Minimization of Portfolio risk, Monitoring the Risk and Return of a portfolio (viii)Portfolio Analysis - Security and Capital Market Line, Beta, Levered and Unlevered Beta