Written by high-profile financial author Prasanna Chandra, "Investment Analysis and Portfolio Management" provides junior-level equity researchers, investment. Language English. Title. Investment analysis and portfolio management CFM- Mcgraw-Hill professional series in finance. Author(S) Prasanna Chandra (Author) . Trove: Find and get Australian resources. Books, images, historic newspapers, maps, archives and more.
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View investment analysis and portfolio management by prasanna chandra pdf. pdf from PGP 23 at Indian Institute of Management Raipur. Read Online Now. Investment Analysis and Portfolio Management (Fourth Edition). Prasanna Chandra. Published by Tata McGraw-Hill Education Pvt. Ltd, ISBN books by Dr. Prasanna chandra - Free download as Text File .txt), PDF File .pdf) Format: Softcover Investment Analysis and Portfolio Management ISBN.
The Benefits of Diversification 8. The Risk Reward Relationship 9. Efficient Market Hypothesis: The Collective Wisdom Behavioural Finance: Fixed Income Securities Bond Prices and Yields: Figuring out the Assured Returns Bond Portfolio Management: Equity Shares Equity Valuation: How to Find Your Bearings Macroeconomic and Industry Analysis: Understanding the Broad Picture Company Analysis: Establishing the Value Benchmark Technical Analysis: The Visual Clue The Upside Without the Downside Other Investment Options Mutual Funds: Indirect Investing Investment in Real Assets: The Tangible Thing International Investing: The Global Search Portfolio Management: Investment Policy and Strategy: The Grand Design Dec 19, Sanjay8bhansali rated it it was amazing.
Jun 28, Cherry rated it really liked it. Very Lucid explanation of the financial markets and essential terms.
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It is a strategic decision which is addressed by the top-level managers. The main objectives of portfolio management in finance are as follows:- 1 Security of Principal Investment : Investment safety or minimization of risks is one of the most important objectives of portfolio management. Portfolio management not only involves keeping the investment intact but also contributes towards the growth of its downloading power over the period. The motive of a financial portfolio management is to ensure that the investment is absolutely safe.
Other factors such as income, growth, etc. The portfolio helps to yield steady returns. The earned returns should compensate the opportunity cost of the funds invested. A portfolio shall appreciate in value, in order to safeguard the investor from any erosion in downloading power due to inflation and other economic factors.
A portfolio must consist of those investments, which tend to appreciate in real value after adjusting for inflation.
A portfolio consists of such investment, which can be marketed and traded. Suppose, if your portfolio contains too many unlisted or inactive shares, then there would be problems to do trading like switching from one investment to another. It is always recommended to invest only in those shares and securities which are listed on major stock exchanges, and also, which are actively traded.
The investors shall be aware of the fact that there is no such thing as a zero risk investment.
More over relatively low risk investment give correspondingly a lower return to their financial portfolio. By minimizing the tax burden, yield can be effectively improved.
A good portfolio should give a favorable tax shelter to the investors. The portfolio should be evaluated after considering income tax, capital gains tax, and other taxes.
The objectives of portfolio management are applicable to all financial portfolios. These objectives, if considered, results in a proper analytical approach towards the growth of the portfolio.
Furthermore, overall risk needs to be maintained at the acceptable level by developing a balanced and efficient portfolio. Finally, a good portfolio of growth stocks often satisfies all objectives of portfolio management.
The new approach presented in this article included portfolio formation by considering the expected rate of return and risk of individual stocks and, crucially, their interrelationship as measured by correlation. Prior to this investors would examine investments individually, build up portfolios of attractive stocks, and not consider how they related to each other.
Markowitz showed how it might be possible to better of these simplistic portfolios by taking into account the correlation between the returns on these stocks. The diversification plays a very important role in the modern portfolio theory. Markowitz approach is viewed as a single period approach: at the beginning of the period the investor must make a decision in what particular securities to invest and hold these securities until the end of the period.
Because a portfolio is a collection of securities, this decision is equivalent to selecting an optimal portfolio from a set of possible portfolios.
Harry M. Morkowitz is credited with introducing new concepts of risk measurement and their application to the selection of portfolios.
Morkowitz model is thus a theoretical framework for analysis of risk and return and their inter-relationships.
He used the statistical analysis for measurement of risk and mathematical programming for selection of assets in a portfolio in an efficient manner. His framework led to the. An efficient portfolio is expected to yield the highest return for a given level of risk or lowest risk for a given level of return. Markowitz generated a number of portfolios within a given amount of money or wealth and given preferences. Individuals vary widely in their risk tolerance and asset preferences.
Their means, expenditures and investment requirements vary from individual to individual. Given the preferences, the portfolio selection is not a simple choice of anyone security or securities, but a right combination of securities. Markowitz emphasised that quality of a portfolio will be different from the quality of individual assets within it. Thus, the combined risk of two assets taken separately is not the same risk of two assets together.
Risk and Reward are two aspects of investment considered by investors. The expected return may vary depending on the assumptions. Risk index is measured by the variance or the distribution around the mean, its range etc.
The qualification of risk and the need for optimisation of return with lowest risk are the contributions of Markowitz. This led to what is called the Modern Portfolio Theory, which emphasises the trade off between risk and return. If the investor wants a higher return, he has to take higher risk.
But he prefers a high return but a low risk and hence the need for a trade off. Investors are rational and behave in a manner as to maximise their. Investors have free access to fair and correct information on the returns and risk.
The markets are efficient and absorb the information quickly and perfectly.