BA9257 Security Analysis & Portfolio Management MBA Question Bank : sriengg.com

Name of the College : Srinivasan Engineering College
University : Anna University
Department : Management Studies
Degree : MBA
Subject Code/Name : BA9257 Security Analysis & Portfolio Management
Year : 2nd
Semester : 3rd
Document Type : Question Bank
Website : sriengg.com

Download Model/Sample Question Paper :
Question Bank Part-A : https://www.pdfquestion.in/uploads/sr…SAPM2marks.pdf
Question Bank Part-B : https://www.pdfquestion.in/uploads/sr…M-16-marks.pdf

Security Analysis & Portfolio Management Question Paper

1.New Issue Market (Primary Market)
** Issuer may be a new company or an existing company.
** In the new issue market the issuer can be considered as a manufacturer. The issuing houses, investment bankers and brokers act as the channel of distribution for the new issues. They take the responsibility of selling the stocks to the public.

Related : Srinivasan BA9206 Accounting For Management MBA Question Bank : www.pdfquestion.in/3243.html

2.Relationship between the primary and secondary market :
** The new issue market cannot function without the secondary market. The secondary market or the stock market provides liquidity for the issued securities. The issued securities are traded in the secondary market offering liquidity to the stock at a fair price.
** The primary market provides a direct link between the prospective investors and the company. By providing liquidity and safety, the stock market encourage the public to subscribe to the new issues.
** The health of the primary market depends on the secondary market and viceversa.

3.Who are the parties involved in primary market :
** In the and sixties and seventies, public issue was managed by the company and its personnel. But ,at present public issue involves a number of agencies. The rules and regulation, the changing scenario of the capital market necessitated the company to seek for the support of many agencies to make the public issue a success.
** Managers to the issue
** Registrar to the issue
** Underwriters

4.Book building :
** Book building is a mechanism through which the intial public offerings(IPOs) take place in the U.S.Similar mechanisms are used in the primary market offerings of GDRs also. In this process the price determination is based on orders placed and investors have an opportunity to place orders at different prices as practiced in international offerings.
** Book – building involves firm allotment of the instrument to a syndicate created by the lead managers who sell the issue at an acceptable price to the public.

5.Issue At premium :
a) First issue of new companies set up by existing companies with the case of the following
b) First issue of existing private/closely held or other existing unilisted companies with three – year track record of consistent profitability.
c) Public issue by existing listed companies with the last three years of dividend paying track record.

6.Issue At par value :
a) First public issue by existing private, closely held or other existing unlisted companies without three – year track record of consistent profitability and
b) Existing private/closely held and other unlisted companies without three- year track record of consistent profitability seeking disinvestment offer to public without issuing fresh capital (disinvestment).

7.Allotment Of Shares :
** The applications will be categorised according to the number of shares applied for. Then allocation is done by proportionate basis.
** Factors to be considered by the investors In this context, the investor has to be alert and careful in his investment. He has to analyse several factors.

8.Investors protection in the primary market :
SEBI Guidelines to the investor protection
1) Project appraisal
2) Underwriting
3) Disclosuers in the prospectus
4) Clearance by the stock exchange
5) Singing by the board of directors
6) SEBI’s role
7) Redressal of investors grievances

9.Recent trends in the primary market :
The liberalisation policy adopted by the government in the early nineties resulted in boom in the secondary market. The boom was not restricted to the secondary market alone, the primary market till then was workink under the controller of capital issue act.with the dawn of an era of free pricing more and more companies accessed the primary market.
1) Aggressive pricing
2) Poor liquidity
3) Low returns-Non implementation of projects, delays changes in the scope and scale of project to justify the cost and non attainment of projected earnings have resulted in the fall in listing price.
4) Low volume
5) Economic slow down

10. Short notes on Stock Exchanges In India :
The origin of the stock exchange in india can be traced back to the later half of 19th century. After the american civil war (1860-61)due to the share mania of the public, the no of brokers delaing in shares increased. The brokers organised an informal association in mumbai named “The native stock and share brokers association” in 1875.