1. Briefly explain the various investment intermediaries in India which help in mobilizing funds from the general public for capital formation.
2. a) Distinguish between ‘current yield’ and ‘yield to maturity’ of a fixed income Security. How are these yields calculated? Discuss.
b) Prashanth Ltd., is intending to acquire substantial shares in GVK Ltd. to acquire control in the company. The beta factor of GVK Ltd. shares is 1.60 and its current market price is Rs. 190/- The company is consistently paying an annual dividend of Rs. 46/-. The risk free market rate of interest is 12% and the rate of return expected on such securities in the market is 18%. You are required to value the share of GVK Ltd.
3. What are the three forms of efficient market hypothesis? Does the efficient market Hypothesis suggests that an investor cannot outperform the market? Explain.
4. What is a ‘diversified portfolio’? What type of risk is reduced through diversification? How many securities are necessary to achieve this reduction in risk?
5. What do you understand by a Mutual Fund? Discuss the various types of mutual fund schemes available in the Indian capital market. How is the Net Asset Value (NAV) of a Mutual Fund Unit Calculated? Explain with an example.