Risk Analysis and Portfolio Management

Paper Code: 
FMG 617 A
Credits: 
3
Contact Hours: 
45.00
Max. Marks: 
100.00
Objective: 

The objective of this course is to gain an understanding of the theory underlying optimal portfolio construction, the different ways portfolio is actually built in practice after estimation of investment corpus and how to measure and manage the risk of such portfolio.

9.00
Unit I: 
Introduction to investments

• Investment-meaning & Definition,
• Process of investing,
• Investment objectives,
• Investment attributes,
• Factor influencing Investment decisions,
• Importance of investment management

9.00
Unit II: 
Risk and Return on investments

• Measures of Returns and Risk ( Measuring historical risk and return)
• Relationship risk and return,
• Classification of risks: Systematic & Unsystematic Risk

9.00
Unit III: 
Investment valuation

• Time value of money-Time lines & Notations Present and Future Value of single amount,
• Present Value and Future value of annuity,
• Techniques of discounting and compounding

9.00
Unit IV: 
Portfolio management

• Meaning of portfolio,
• portfolio management process,
• objective of Portfolio management,
• Types of portfolio management-Active portfolio management, Passive Portfolio Management, Defensive Portfolio management, Aggressive Portfolio Management, Income portfolio Management; Portfolio construction
• Approaches: An Overview of Capital Market Theory, CAPM, Markowitz Portfolio Selection Model

9.00
Unit V: 
Portfolio Analysis, Risk and Return

Portfolio Analysis
Concept of portfolio analysis and diversification of risk.
• The Benefits of Diversification,
• Diversification and Portfolio Risk,
Portfolio Return and Risk-
• Return of portfolio (Two assets),
• Risk of portfolio ( two assets) ,
• Risk and Return of Multi Security,
• Concept of Beta.

Essential Readings: 

• Strategic Investment Decision, Laurence Krantz and Ailan Thomason, F.T. Prentice Hall, 2000.
• Investments: An Introduction, Herbert B. Mayo, South – Western College Publishing, 2005.
• Investments and Valuation, Aswath Damodaran, John Wiley & Sons Inc., 2001.
• Security Investments, David L. Scott, Rowman & Littlefield, 1981.
• Model Investment Theory, Haugen, Holden and Nofisinger, Prentice Hall, 2003.
• Contemporary Investments, Hearth, Houghton Mifflin, 1977.
• Investments Spread Sheet, Sharpe, Prentice Hall, 2001.
• Essentials of Investments, Bodie, Irwin, 1997.
• Basic Investments, Herbert B. Mayo, South-Western College Publishing, 2005.
• Sound Investments, Larry Burkett, RICS, 1995.

References: 

• Investment: Principles and Practices, Ben Branch, Dearborn Financial Publishing, 1990.
• Investments: Analysis and Management, Charles P. Jones, John Wiley & Sons Inc., 2006.
• Investments (Shaum’s outline), Jack Clark Francis, McGraw Hill, 2000.
• Understanding Finance, Prentice Hall, 2004.
• Quantitative Methods for finance and investments, John L. Teall and Iftekher Hasan, Black Well Publishers, 2

Academic Year: 
2021-2022
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