UNIT I:
Investment: Definition. Investment decision process. Investment – Vs Speculation. Role of a speculator. Sources of investment information. Risk and return concepts and parameters: ex-post, ex-ante, single periods and multi period portfolio risk and return.

UNIT II:
Valuation of securities: (a).Fixed income securities: return on bonds, current yield, Approximate Yield to Maturity YTM. Capitalization of income method. Bond theorms,Macauleys Duration, Modified Macauleys Duration convexity. Interest rate risk, Immunisation.(b) Valuation of equity shares: capitalization of divedends, growth conditions.P/E approach. Fundamental analysis, Technical analysis,charts,Dow theory, price indicators, volume indicators, confidence, moving averages,reletive stregth. Efficient anomalies and criticism of EMH.

UNIT III:
Portfolio Theory: Markowitz model, aaumtions.inputs, minimum variance portfolio, efficient frontier, capital market theory CML, borrowing and tending portfolios, estimating Capital Market Line: graphic method, seperation theorem, quadratic programming. Capital Asset Pricing Model: portfolio return and risk using CAPM, identification of overpriced and under priced securities using CAPM.Arbitage Price Theory:Law of one price, two factor arbitrage pricing, equilibrium risk-return relations, a synthesis of APT and CAPM..

UNIT IV:
Measuring Portfolio Performance: Mutual Funds: Genesis, types and Schemes. Regulatory framework. Performance – NAV Concept – resources mobilized, schemes launched, size and strategies ofinvestment, and serving the cause of cutomers. Problems and prospects of Mutual funds in India. Portfolio strategy, active and passive. Portfolio monitoring and revision, measures of portfolio performance – reward to variability and reward to volatility measures, differential risk –sense’s measure,Fama’s decomposition approach.

UNIT V:
Derivatives: Concept and types – forwards, futures, options and swaps.Risk-Return dimensions of derivatives. Pricing of derivatives.Black and Scholes option pricing model. Derivatives as instruments for risk management.

Suggested Readings:
1.Fisher & Jordon: Security Analysis and Portfolio Management,PHI- 2001
2.Francis J.C. & Taylor,R.W: Investments,Schaum’s Outline Series:McGraw Hill – 1993.
3.Sharp W.E Alexander G.J.Bailey:Investments,PHI – 2000.
4.Strong R.A:Portfolio Management Handobook.Jaico Pub – 1990.
5.Sandhak, H:Mutual Funds in India,Response Books,Sage Publications – 1997.
6.Christy and Clandenis:Introduction to investments,McGraw Hill – 1990.
7.Francis:Investment, Analysis andmanagement,Tata McGraw Hill 1999.
8.Graham and Dodd: Security Analysis,McGrawHill 1989