International School of Business and Media

Nande Campus, Pune

Faculty: Dr. Abhilasha Srivastava
Email:
Subject:

SECURITY ANALYSIS & PORTFOLIO MANAGEMENT

The subject Security Analysis and Portfolio Management focuses at introducing the
students about the various basic aspects of security analysis and portfolio management,
introduction to practical concepts, tools and applications to Indian Securities Market, techniques
to facilitate the managers in managing their portfolio, etc.
A) Objectives:
1. To acquaint students in respect to the investment decisions related to financial assets, the
risks and returns involved, to make aware about the functioning of securities market
alongside the theories and concepts involved in portfolio management.
2. To develop the skills required for portfolio management so as to be able to judge the
competitive position of the firms in capital market and review the related business
decisions.
B)
1.
2.
3.
4.

Teaching Methodology:
Interactive teaching methodology.
Briefing on the previous days topic, before the start of each class by the faculty.
Understanding of the basic concepts is monitored by surprise test/MCQS.
Case studies on each topic are discussed in detail to improve conceptual understanding
reasoning and application of the theoretical aspects, by the student groups.
5. Regular exercises /Internet exercises to be worked out by the students.
C) Evaluation Methodology: (Will Change)
The breakup of evaluation for assessment of the students will be as follows:
Quizzes, Assignments, Class
Participation

35%

Tutorials

10%

Live Project

25%

End Term examination

30%

D) Reference Books:

Sr. No. Name

1.
Investments

Edition
8th

2.

8th

Investment Analysis &

Portfolio Management
Security Analysis & Portfolio
Management
Practical Investment
Management
Investment Analysis &
Portfolio Management

3.
4.
5.

E)
1.
2.
3.
4.
5.
6.
7.

Websites:
www.moneycontrol.com
www.yahoofinance.com
www.bseindia.com
www.nseindia.com
www.indiaipo.com
www.capitalmarket.com
www.equitymaster.com

F)

Magazines and Journals to refer:

Journal of Finance
Capital Market
Outlook Money
Business India
Dalal Street
The Economic Times

6th

Author
Zvi Bodie, Alex Kane,
Alan J. Marcus,
Pitabas Mohanty
Reilly/ Brown

3rd

Donald E. Fisher,
Ronald J. Jordan
Robert A. Strong

3rd

Prasanna Chandra

Publication
Mc. Graw Hill

South western
cengage learning
Pearson
Thomson SouthWestern
Mc. Graw Hill

SECURITY ANALYSIS AND INVESTMENT MANAGEMENT

Module 1: Introduction to Securities & Capital Market

Lesson 1: Introduction
Lesson 2: Risk & Return
Lesson 3: Introduction to Financial Market and SEBI & its guidelines
Module 2: Security Analysis
Lesson 1: Macro Economic Analysis
Lesson 2: Industry & Company Analysis
Lesson 3: Fundamental & Technical Analysis
Lesson 4: Nature of Stock Market (EMH) & Valuation of equity shares
Module 3: Portfolio Management
Lesson 1: Introduction to portfolio
Lesson 2: Calculation of beta
Lesson 3: CAPM & APT, Markowitzs pricing Theory and Single Index Theory
Lesson 4: Portfolio Management and Performance Evaluation
Module 4: Derivative & other Investment Options
Lesson 1: Derivatives
Lesson 2: Fixed Income Securities
Lesson 3: Mutual Funds
Lesson 4: International Investing

Session wise detailed plan

MODULE 1: Introduction to Securities & Capital Market

Topic: Introduction
Session

Pre-session
Reading

Classroom
Session

Group Work
(In Classroom)

:1

The investment environment, Investment Vs Speculation

Introduction to investment and securities.

Financial Instruments
Investment Objectives
Role of Securities in economy
Financial players

Recent trends in investment environment

Assignments
Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Understanding the various investment instruments and

importance of investment in economy.

MODULE 1: Introduction to Securities & Capital Market

Bodie,
Kane,Marcus,
Mohanty
Pgs 2-12
Fisher,Jordan
Pg14-15

Topic: Risk & Return + Tut. 1

Session

Pre-session
Reading

Classroom
Session

Group
Work
(In
Classroom)

:2

What is risk and what are the different types of risk?

Analysis of different types of risks and Return.
Measures of Return and Risk.
Determinants of Required Rate of Return.
Risk free rate and factors influencing the risk free
rate;
Risk Aversion.
Systematic Risk Identification in Securities Market
Authored by Werner Bijkerk, Rohini Tendulkar, Samad
Uddin, Shane Worner
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD461.
pdf

Assignment
s
Conceptual
Exercises/
Application
Exercises/
Case Study

Solving numerical problems

Learning
Outcome

Understanding of :
Volatility in market prices
Value-at-Risk and its implications
Statistically measure risk & analyze applications
Risk Management issues in investments

Risk
Management,Macmilla
n
Pgs 109-203

MODULE 1: Introduction to Securities & Capital Market

Topic: Introduction to Financial Market
Session

Pre-session
Reading

Classroom
Session
Group Work
(In Classroom)
Assignments
Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

:3

SEBI and Government Guidelines

Capital market- primary and secondary market.

Stock exchanges in India- structure- functions- BSE,
NSE, ISE, OTCEI & NSDL.
Listing of securities new issue market.
Stock market indices
SEBI Regulations Updated 2015 : SEBI (Prohibition of Insider
Trading) Regulations, 2015
Visit SEBI website : www.sebi.gov.in

Securities Scam: Genesis, Mechanics and Impact Authored by Samir

K. Barua & Jayanth R. Varma

http://www.iimahd.ernet.in/~jrvarma/papers/vik18-1.pdf
Understanding of Indian capital market, its operations,
instruments & regulations

Financial
Institutions &
Markets,Bhol
e &Mahakud
Pgs 220-231

MODULE 2: Security Analysis

Topic: Economic Analysis
Session
Pre-session
Reading

Classroom
Session

:4

Domestic Macro economy

Fiscal policy & Monetary policy

Economic Series and Stock Prices.

The Cyclical Indicator Approach.
Monetary Variables, the Economy and Stock Prices.
Inflation, interest rate and security prices.

Group Work
(In Classroom)
Assignments
Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Students will be able to analyze how macro economic

variables affect the stock market.

Bodie,
Kane,Marcus,
Mohanty
Pg-589

MODULE 2: Security Analysis

Topic: Industry & Company Analysis + Tut 2
Session

:5

Pre-session
Reading

Industry Life Cycle & SWOT Analysis

Classroom
Session

Industry Analysis
Introduction; Business Cycle and Industry
Sectors.
Analysis of Industry Competition.
Estimation of Industry Rates of Return.
Company Analysis
Firm Competitive Strategies.
Analysis of Growth and Value Companies.

Group Work
(In Classroom)
Assignments
Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Select a stock exchange listed company and analyze its

prospects.
Analysis of : Banking Sector & Automobile Sector

Analysis of industry and company prospects

MODULE 2: Security Analysis

Topic: Technical Analysis
Session

Pre-session
Reading

Classroom
Session

:6

Assumptions, Advantages and Challenges.

Technical Trading Rules and Indicators.

Technical Analysis of Equity Markets.
Technical Analysis - moving averages MACD
oscillators RSI charts trend reversals Head and
shoulders Tops and bottoms
Dow Theory.

Group Work
(In Classroom)

Interpretation of various types of charts.

Assignments

Evaluate technical analysis

Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Understanding the use of chart analysis to identify buy & sell

opportunities.
Understand of breadth indicators & market sentiments
indicators to assess the technical condition of the market

Reilly/Brown
Pgs583-585

MODULE 2: Security Analysis

Topic: Nature of Market & Valuation of Equity Shares + Tut 3
Session

:7&8

Pre-session
Reading

Efficient capital markets, Alternative Efficient market

hypothesis

Classroom
Session

Versions of EMH: weak form, semi-strong & strong form,

event studies, implications of EMH.
Role of portfolio management in an efficient market

Bodie,
Kane,Marcus,
Mohanty
Pg- 370

Group Work
(In Classroom)
Assignments
Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Understanding how the competition among analysts leads

naturally to market efficiency
Implications of efficient market hypothesis for investment
policy.

Pre-session Reading

Classroom Session

Financial Statement Analysis : Ratio Analysis & Balance

sheet valuation ,
Theory of Valuation.
Discounted Cash Flow Method
Earning Multiplier Approach
Alternative Valuation Methods.

Reilly/Brown
Pgs301-309

Group Work
(In Classroom)
Assignments

Practical application of above discussed methods

Conceptual Ex./
Application Ex./
Case Study

Solving the problems using excel

Learning Outcome

Calculating the value of stock using various models

MODULE 3: Portfolio Management

Topic: Introduction to Portfolio Management
Session

:9

Pre-session
Reading

What is a portfolio and asset mix?

Classroom
Session

Approaches in Portfolio Management

Determination of Objectives
Selection of Portfolio

Group Work
(In Classroom)
Assignments

Create an active & a passive portfolio for yourself

Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Understanding of technique of constructing active & passive

portfolio

Bodie,
Kane,Marcus,
Mohanty
Pgs 211

MODULE 3: Portfolio Management

Topic: Calculation of Beta + Tut :4
Session
Pre-session
Reading
Classroom
Session

: 10

CAPM assumptions
The CAPM model
The APT model, security valuation with APT, Empirical Tests
of APT

Group Work
(In Classroom)
Assignments
Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Evaluating CAPM model using excel

Use of multifactor models to estimate expected risk premium

of a security or portfolio.

Reilly/Brown
Pg-229

MODULE 3: Portfolio Management

Topic: CAPM Models + Tut 5
Session
Pre-session
Reading
Classroom
Session

: 11

CAPM assumptions
The CAPM model
The APT model, security valuation with APT, Empirical Tests
of APT

Group Work
(In Classroom)
Assignments
Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Evaluating CAPM model using excel

Use of multifactor models to estimate expected risk premium

of a security or portfolio.

Reilly/Brown
Pg-229

MODULE 3: Portfolio Management

Topic: Markowitzs pricing Theory and Single Index Theory + Tut 6
Session
Pre-session
Reading
Classroom
Session

: 12

CAPM assumptions
The CAPM model
The APT model, security valuation with APT, Empirical Tests
of APT

Group Work
(In Classroom)
Assignments
Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Evaluating CAPM model using excel

Use of multifactor models to estimate expected risk premium

of a security or portfolio.

Reilly/Brown
Pg-229

MODULE 3: Portfolio Management

Topic: Portfolio Evaluation + Tut 7
Session
Pre-session
Reading

Classroom
Session
Group Work
(In Classroom)
Assignments
Conceptual
Exercises/
Application
Exercises/
Case Study

Markowitz Pricing Theory

Sharpes Performance Index
Treynors Performance Index
Jensens Performance Index
The Formula Plan
Revision & the cost

: 13
Reilly/Brown
pgs:202-222

Learning
Outcome

Students will be able to : evaluate the portfolio using different

models.
With the help of these models student will be able to revise the
portfolio within their cost limit.

MODULE 4: Derivatives & Other Investment Options

Topic: Derivatives
Session: 14

Pre-session
Reading

Classroom
Session
Group Work
(In Classroom)

Brief History of Derivatives, Evolution of Commodity,

Currency, Stocks and Interest Rate Derivatives
Structure of Derivative Markets, Forwards, Futures, Options,
Swaps, etc.
Options and Futures Applications in India
Structure of Indian Stock Markets and the Operational
Efficiency of Options and Futures

Reilly/Brown
pgs:802

Assignments
Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Understanding of the importance of financial derivatives and

the institutional structure of the markets on which they are
traded as well as developing the analytical tools necessary to
price such instruments.

MODULE 4: Derivatives & Other Investment Options

Topic: Fixed Income Securities + Tut 8
Session
Pre-session
Reading
Classroom
Session
Group Work
(In Classroom)
Assignments

: 15

Government securities market, features of a government

securities market
Fixed Income Markets, Arrangements, Market Participants and
Instruments, Investors Perspectives, & Market Conventions,

Reilly/Brown
pgs:646

Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Students will be able to: understand the importance of fixed

income securities in portfolio.
Calculate various measures of bond yield.
Identify the risk in bonds.

MODULE 4: Derivatives & Other Investment Options

Topic: Mutual Funds
Session

Pre-session
Reading
Classroom
Session

: 16

Mutual Funds and other investment companies

Types of investment companies
Costs incurred in issuing mutual funds
Exchange traded funds

Bodie,
Kane,Marcus,
Mohanty
Pgs 666-675

Financial analysis, investment strategy, Sharpe ratio, Treynor

ratio. Jensens alpha, Expenses ratio
Group Work
(In Classroom)

Choosing a mutual fund, w.r.t different criterion.

Assignments
Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Investment styles of mutual funds and their turnover from one

period to another.

MODULE 4: Derivatives & Other Investment Options

Topic: International Investing
Session

: 16

Pre-session
Reading

NASDAQ, NYSE & London Stock Exchange

Classroom
Session

International Financial Instruments ADRs, IDRs

Pros & cons of Global Investing
Importance of Global Investing
Risk & Return of Global Investments

Group Work
(In Classroom)
Assignments
Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Construction of portfolios in different market

Understanding the importance of global investment and

procedure for investing

Topic: Strategies of successful investors

Session

Pre-session
Reading

Classroom
Session

Investment Strategies of :
Warren Buffet
Harold Simmons
Mickhail Prokhorav
Chaitany Dalmia
Rakesh Jhunjhunwala etc.

: 17

Group Work
(In Classroom)

Group presentation

Assignments

Generate your own investment strategy and explain.

Conceptual
Exercises/
Application
Exercises/
Case Study
Learning
Outcome

Understanding the strategies of successful investors.

One Day Work shop on:

Advance Excel with reference to SAPM.