CONTENTS
1. Basic Concepts 1
1.1 Introduction'
1.2 Future Value of Single Cash Flow
1.3 Present Value of Single Cash Flow
1.4 Short Compounding Periods
1.5 Present Value of Uneven Series of Cash Flows
1.6 Present Value of Annuity
1.7 Future Value of Annuity
1.8 Measures of Central Tendency
1.9 Dispersion
1.10 Summary
1.11 Keywords
1.12 Self-assessment Questions
2. Investment 21
2.1 Introduction
2.2 Investment Versus Speculation and Gambling
2.3 Investment Alternatives / Avenues
2.4 Non - Marketable Financial Assets
2.5 Marketable Financial Assets
2.6 Summary
2.7 Key Words
2.8 Self-assessment Questions
3. Introduction to Security Analysis 39
3.1 Introduction
3.2 Securities Market
3.3 Security Analysis
3.4 Summary
3.5 Key Words
3.6 Self-assessment Questions
4. Risk and Return Concepts 51
4.1 Introduction
4.2 Measurement of Return
4.3 What is Risk?
4.4 Types of Risk
4.5 Measurement of Risk
4.6 Risk and Return Relationship
4.7 Portfolio Risk
4.8 Capital Asset Pricing Model
4.9 Beta of an Asset
4.10 Security Market Line
4.11 Risk Reduction through Diversification
4.12 Summary
4.13 Keywords
4.14 Self-assessment Questions
5. Security Market Indicators 73
5.1 What is Securities Market?
5.2 Classification of Securities Market
5.3 Debt Market
5.4 Equity Market
5.5 Derivatives Market
5.6 What do you mean by Stock Market Indices?
5.7 Construction of Stock Market Indices
5.8 Summary
5.9 Key Words
5.10 Self-assessment Questions
6. Fundamental Analysis 91
6.1 What is Fundamental Analysis?
6.2 Approaches to Fundamental Analysis
6.3 Economy Analysis
6.4 Industry Analysis
6.5 Company Analysis
6.6 Summary
6.7 Key Words
6.8 Self-assessment Questions
7. Technical Analysis 115
7.1 What is Technical Analysis?
7.2 Dow's Theory
7.3 Three Important Trends
7.4 Charting Techniques
7.5 Head and Shoulders Formation
7.6 Momentum Indicators
7.7 Breadth Indicators
7.8 Elliot Wave Theory
7.9 Summary
7.10 Keywords
7.11 Self-assessment Questions
8. Efficient Market Theory 137
8.1 What is Efficient Market?
8.2 What is Efficient Market Hypothesis or Random Walk Hypothesis?
8.3 Forms of Efficient Market Hypothesis
8.4 Test of Efficient Market Hypothesis
8.5 Misconceptions about Efficient Market Hypothesis
8.6 Summary
8.7 Key Words
8.8 Self-assessment Questions
9. Bond Valuation 153
9.1 Features of Bond
9.2 Yields to Maturity
9.3 Risks in Bonds
9.4 Rating of Bonds
9.5 Strategies
9.6 Summary
9.7 Key Words
9.8 Self-assessment Questions
10. Portfolio Management 167
10.1 What is Portfolio Management?
10.2 Phases of Portfolio Management
10.3 Specification of Investment Objectives and Constraints
10.4 Choice of Asset Mix
10.5 Formulation of Portfolio Strategy
10.6 Selection of Securities
10.7 Portfolio Execution
10.8 Portfolio Revision
10.9 Portfolio Evaluation
10.10 Summary
10.11 Keywords
10.12 Self-assessment Questions
11. Portfolio Theory 185
11.1 The Concept of Portfolio Theory
11.2 Traditional Portfolio Theory
11.3 Modern Portfolio Theory
11.4 Markowitz Model
11.5 Capital Asset Pricing Model
11.6 Efficient Frontier
11.7 Optimal Portfolio
11.8 Summary
11.9 Keywords
11.10 Self-assessment Questions
12. Derivatives: Futures and Options 203
12.1 What is a Derivative?
12.2 What is a Futures Contract?
12.3 What are Options?
12.4 Summary
12.5 Keywords
12.6 Self-assessment Questions
13. Mutual Fund and their Schemes 215
13.1 History of Mutual Funds
13.2 What is the Concept of Mutual Funds?
13.3 Types of Mutual Fund Schemes
13.4 Advantages and Disadvantages of Mutual Funds
13.5 Summary
13.6 Keywords
13.7 Self-assessment Questions
Appendix 229