2.Risk is the likelihood that your investment will either earn money or lose money. Explain the factors that affect risk. Mr. Rahul invests in equity shares of Wipro. Its anticipated returns and associated probabilities are given below:
| Return | -15 | -10 | 5 | 10 | 15 | 20 | 30 | |
| Probability | 0.05 | 0.10 | 0.15 | 0.25 | 0.30 | 0.10 | 0.05 |
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You are required to calculate the expected ROR and risk in terms of standard deviation.
A
Explanation of all the 4 factors that affect risk
Calculation of expected ROR and risk in terms of standard deviation
3.Explain the business cycle and leading coincidental & lagging indicators. Analyse the issues in fundamental analysis.
A
Explanation of business cycle-leading coincidental and lagging indicators
Analysis and explanation of the issues in fundamental analysis all the four points
4.Discuss the implications of EMH for security analysis and portfolio management.
A
Implications for active and passive investment
Implications for investors and companies
5.Explain about the interest rate risk and the two components in it.
An investor is considering the purchase of a share of XYZ Ltd. If his required rate of return is 10%, the year-end expected dividend is Rs. 5 and year-end price is expected to be Rs. 24, Compute the value of the share.
