1. Meet a Share Broker of your choice and find out how the Online Trading System of Bombay Stock Exchange/ National Stock Exchange works. Describe your discussions.
2. The expected rates of return and the possibilities of their occurrence for Rama & Co. and Krishna & Co. scrips are given below
| Probability of Occurrence |
Return on Rama’s Scrip | Return on Krishna’s Scrip |
| 0.05 | -2.0 | -3.0 |
| 0.20 | 9.0 | 6.0 |
| 0.50 | 12.0 | 11.0 |
| 0.20 | 15.0 | 14.0 |
| 0.05 | 26.0 | 19.0 |
(i). Find out the expected rates of return for Rama’s and Krishna’s
Scrips.
(ii) If an investor invests in equal proportion in both the scrips,
what would be the return?
3. (a) An investor is able to borrow and lend at the risk free rate
of 12 per cent. The market portfolio of securities has an expected
return of 20 per cent and a standard deviation of 25 per cent. Determine
the expected return of and standard deviation of the portfolios:
(i) If all wealth is invested in the risk free assets.
(ii) If two- third are invested in risk free assets and one-third
in the market portfolio.
(iii) If all wealth is invested in the market portfolio and if the
investor borrows additional one-third of his wealth to invest in the
market portfolio.
(b) A financial analyst is analyzing two investment alternative of A and B. The estimated rates or return and their changes of occurrence for the next year are given
| Probability of Occurrence |
Rate of Return A |
Rate of Return B |
| 0.20 | 22% | 5% |
| 0.60 | 14% | 15% |
| 0.20 | -4% | 25% |
(i) Determine the expected rate of return variance and standard deviation of each of the alternatives.
(ii) Is the alternative A comparatively risk less?
4. Explain the role of Financial Analysis in Banks in managing their finances. Also select a Bank of your choice and prepare a financial analysis for 3 years. Make a comment on the trends in the ratios of the Bank
5. Analyze the trends in the Asset Liability Management of a Bank of your choice