Capital Market & Portfolio Management Dec 2026 Solved Assignments

Description

Capital Market & Portfolio Management Dec 2026 Solved Assignments

Sem 3

Last Date 28 Oct 2026

Assignment Marks: 20

Q1 A mid-cap Indian company has been experiencing low trading volumes and wide bid-ask spreads in its shares. At the same time, institutional investors are increasingly using algorithmic trading to execute large orders, while retail investors primarily use online discount-broker platforms.

As a Capital Market Consultant, analyse how market structure and trading mechanisms can influence the liquidity, price discovery and execution quality of such

a security. In your response:

• compare the roles of exchange-based and OTC markets;
• evaluate the suitability of market orders, limit orders and stop-loss orders for different market participants;
• analyse the role of liquidity and market depth in execution; and
• evaluate how algorithmic trading can influence market efficiency and create risks for market participants.

(10 Marks)

Q2 (A) During a sharp rise in the Indian stock market, a large number of retail investors begin purchasing a particular stock simply because “everyone is buying it.” Some investors continue holding the stock despite deteriorating fundamentals because they fear realising a loss.

As an investment advisor, analyse the behavioural biases reflected in this situation and evaluate how such behaviour challenges the assumptions of the Efficient Market Hypothesis (EMH). Design two practical decision-making measures that investors

could adopt to reduce the influence of these biases.

(5 Marks)

Q2 (B) Two diversified equity portfolios, Alpha Fund and Beta Fund, have generated the following annual performance:

The market return during the period was 12%. Required:

1. Calculate the Sharpe Ratio and Treynor Ratio for both portfolios. (3 Marks)
2. Based on the results, identify which portfolio provides better risk-adjusted performance under each measure and explain briefly why the rankings differ. (2 Marks)

(5 Marks)

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Instructions

• All Questions carry equal marks
• All Questions are compulsory
• All answers to be explained in not more than 1000 words for question Q1 and for question Q2(A) and Q2(B) in not more than 500 words for each subsection. Use relevant examples,illustrations as far as possible
• All answers to be written individually. Discussion and group work is not advisable.
• Students are free to refer to any books/reference material/website/internet for attempting their assignments, but are not allowed to copy the matter as it is from the source of reference.
• Students should write the assignment in their own words. Copying of assignments from other students is not allowed
• Students should follow the following parameter for answering the assignment questions