Download Chapter I: Introduction to Investment Management

Chapter I: Introduction to Investment Management
karENnaMGMBIkarRKb;RKgkarvinieya
K
I. Real Investments and Financial Investments
1. etIGVIeTACakarvinieyaK What is investment?
KWCakarlHbg;FnFankñúgeBlbc©úb,nñedays
g,wmTuknwgbegIánFnFannaeBlGnaKt.
Is the sacrifice of current resources in the hope to generate greater resources in the future.
Chapter I: What is Investment Management?
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Ex. - GM
vinieyaKrab;landuløaeTAkñúgm:UEdlrfynþfµ
ImYy
GM Invests millions of dollars in the a new model car
-
RKUeBTümñak;vinieyaKeRcInCag $100,000
edIm,Isagsg;GKarfµImYy
A doctor invests over a $100,000 in a new department house
-
saRsþacarümñak;vinieyaK
edayTijbNѽrbs;sþúk IBM
$1,000
A professor invests $1,000 by purchasing shares of GM stock
-
eBlevla nigsac;R)ak;
GñkcMNaysikSaenATIenHk¾Cakarviniey
aKmYypgEdr
Chapter I: What is Investment Management?
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Time & Money you spend studying here also is an investment.
lkçN³énkarvinieyaK KW eBlevla
¬tMéleBlevlarbs;sac;R)ak;¦
nigmanBIrepSgeTotKW haniP½y
nigclnasac;R)ak; (The feature of investment is the time (time value of money) and
other two are Risk and Cash flow)
lkçN³BiessepSgKñabI
Tak;TgkñúgkarsMerccitþvinieyaK
Three different features involving in the investment decisions
-
eBlevla ³
sMedAelIenAeBlsac;R)ak;KWRtUv)anTT
Yl nig cMNay
Chapter I: What is Investment Management?
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Time: refers to when the money is to be received or disbursed
-
haniP½y ³
sMedAelIPaBminR)akdnUvGVIEdlekIteL
IgkñúgeBlGnaKt
Risk: refers to the uncertainty of something happening in the future
-
clnasac;R)ak; ³
sMedAelIsac;R)ak;BitR)akdEdl)anTTYl
nigcMNay
Cash Flow: refers to the actual cash to be received or paid
2. Real Investments and Financial Investments
Chapter I: What is Investment Management?
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- Real Investment:
TamTarRTBüsm,tþiBitR)akd
(requires real assets)
]TahrN¾ ³ dI GKar ma:sIun nigcMeNHdwg
EdlGñkGaceRbIR)as;edIm,plitTMnij
b¤esvakmµ
dUcenH Real Investment
rYmcMEnkedaypÞal;eTAnigsmtßPaBplitkmµe
sdækic©
Ex. Land, Buildings, Machines, and Knowledge that can be used to produce goods and services.
Directly contribute to the productive capacity of the economy.
- Financial Investment:
TamTarRTBüsm,tþiCahirBaØvtßú (requires financial assets)
Chapter I: What is Investment Management?
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]TahrN¾ ³ stocks nig bonds
EdlKµanGVIeRkABIRkdas;
dUcenH Financial Investment
minrYmcMEnkedaypÞal;eTAnigsmtßPaBplitk
mµesdækic©
Ex. Stocks and Bonds that are no more than sheets of paper
Do not directly contribute to the productive capacity of the economy
srubmk Real Asset
KWCacMNUlEdl)anbegáItRTBüsm,tþi
cMENkÉ Financial Asset KW)an[n½ydUcCa
karEbgEckcMnUlkñúgcMeNamral;Gñkvinieya
K.
Chapter I: What is Investment Management?
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Real assets are income generated assets, whereas Financial Assets are defined as the allocation of income
among investors
3. RbePTénkarvinieyaKhirBaØvtßú Types of Financial
Investments
- kavinieyaKmancMNUlefr Fixed-income investment
TamTarmUlb½RtmancMNUlefr.
mUlb½RtTaMgLayNaEdlsnüabg;elIclanasac;
R)ak;Cak;lak; elIkMLúgeBlBitR)akdmYy
(Requires fixed-income securities. Securities that promise to pay a specified cash flow over a specific
period)
- karvinieyaKCaRTBüsm,tiþ Equity Investments
TamTarmUlb½RtCaRTBüsm,tþi .
mUlb½RtEdltMNagbNѽCam©as;enAkñúg
Rkumh‘unrYmTun
Chapter I: What is Investment Management?
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¬minsnüakarbg;Cak;lak;NamYy
nigmanhaniP½yx<s;¦ (Requires equity security. Securities represent the
ownership shares in the corporate (do not promise any particular payment & more riskier))
- karvinieyaK)anmkBIeK Derivative Investments
karvinieyaK)anmkBIeK
CamUlb½RtEdlpþl;karTUTat;GaRs½yelItMél
énRTBüsm,tþi d¾éTeTot (Requires derivative securities. Securities
that provide the payoffs depend on the values of other assets)
4. dMeNIrkarkarvinieyaKeRcInEpñk Portfolio
investment process
manRbePTbIkñúgdMeNIrkarkarvinieyaK (There
are 3 steps in the portfolio investment process)
- CMhanTI
1 ³ karEbgEckRTBüsm,tþi
(Step 1:
Asset allocation)
Chapter I: What is Investment Management?
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karEbgEckkarvinieyaKeRcInEpñkedayqø
gkat;karcMNat;fñak;RTBüsm,tþiCaeRcIn
Allocation of investment portfolio across broad asset classes
- CMhanTI
2 ³ kareRCIserIsmUlb½Rt (Step 2:
Security selection)
kareRCIserIsmUlb½RtCak;lak;enAkñúgc
MNat;fñak;RTBüsm,tþinImYy²
The choice of specific security within each asset class
- CMhanTI
3 ³ karviPaKelImUlb½Rt
(Step 3:
Security analysis)
viPaKtMélral;mUlb½Rt Analysis of the value of securities
Chapter I: What is Investment Management?
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Overall Portfolio
US
Cash
JAPAN
Fixed-income
Treasury Treasury AT&T
Bills
Bonds Bonds
Florid Munis
Chapter I: What is Investment Management?
Stock
Fixed-income
Stock
IBM GM EXOON Bank of Sumi Mitsubishi
Japan
tomo Chimical
Municipal Bonds
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5.
GñkedIrtYnaTIsMxan;kñúgkarvinieyaKhirBaØvt
ßú Major players in Financial Inv.t
EpñkrdæaPi)al
³
KWCaGñkmantMrUvkarmUlniFiedIm,IBR
gIk nigvinieyaKsaFarN³
Government Sectors: are demanders of funds for expenditures and public inv.t
EpñkGaCIvkmµ
³
KWCamantMrUvkarmUlFnsMrab;;vinieya
K
Business Sectors:
Chapter I: What is Investment Management?
are demanders of funds for investment
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- EpñkRKYsar
³
CaGñkpÁt;pÁg;mUlniFisMxan;sMrab;kar
vinieyaK
Household Sectors: Major suppliers of funds for investment
Gov.t
Purchasing
Taxes
Business
Salary
Pension
Interest
Taxes
Household
Purchasing
Salary, Wages, Dividends, Interest
II. mUlb½Rt Securities
Chapter I: What is Investment Management?
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enAkñúghirBaØvtßú
mUlb½RtKWCaÉksartMNagkarvinieyaKmYy
EdlCakarTamTarCak;lak;eliI
cMNUlCabnþbnÞab;mYy b¤
RTBüsm,tþiCak;lak;. (In finance, security is a document represents an inv.t.
That is a specific claim on a stream of income or particular asset)
- Bond nigkardak;bBa©aM
KWCamUlb½RtbMNul (Bond & Mortgage are debt securities)
- Common Stock KWCamUlb½RtPaBCam©as;
Ex.
(Common stocks are ownership securities)
- Preferred Stock KWCamUlb½RtkUnkat;mYy
¬PaBCam¢as;pg nigCam©as;bMNulpg¦
Preferred stock is a hybrid security (Ownership + Creditorship)
Chapter I: What is Investment Management?
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1. mUlb½Rtrbs;rdæaPi)al Government Securities
- bNѽrtnaKa Treasury Bill
KWCamUlb½RtrdæaPi)alry³eBlxøI
e)aHenAÉtMélGb,haBItMélBit
nigpþl;mk[vijenA cMnYnBitR)akd
enAeBldl;kalkMNt; (Are short-term gov.t securities issued at discount
from face value and returning the face amount as maturity)
Chapter I: What is Investment Management?
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]TahrN¾ bNѽrtnaKa $10,000
ehIylk;vatMél $9,600 CamYyGayukalrbs;va 6
Ex (Ex. T-bill = $10,000, Sold at $9,600 with a maturity of 6 months)
- Treasury notes and bonds
KWCakatBVkic©bMNulrbs;rdæaPi)alEdlb
g;Bak;kNþalqñaM niglk;vaenAEk,r
b¤tMélenaH Etmþg (Are the debt obligations of the gov.t that make
semiannual payments and sold at or near par value)
Ex. T. notes (manGayukalrbs;va
T. bonds (manGayukalrbs;va
Chapter I: What is Investment Management?
Maturity: 1 to 10 years)
Maturity: 10 to 30 years)
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Ex.
rebobGanbBa¢Irbs; T-bill BI Wall Street Journal
Maturity
Jan 29’ 10
April 30’ 10
Day to maturity
92
183
Bid
5.11
5.12
Asked
Chg
5.10
+ 0.20
5.11
+ 0.16
Ask yield
5.24
5.32
Ex. rebobGan Gov.t Notes nig Bonds
Rate
8 3/4
Maturity
Day to maturity
Aug 10n
Chapter I: What is Investment Management?
Bid
119:16
Asked
119:18
Chg
+4
Ask yield
5.39
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2. Municipal bonds
Municipal bond ehAkat; (munis) KWCa bond
elIkElgBn§ Edle)aHedayrdæ
rdæaPi)alkñúgtMbn;
nigsMedAelIkarcuHbBa¢ICasaFarN³.
RsedogKñaeTAnigrtnaKa
bondRkumh‘unrYmTun
bu:EnþelIkElgcMNUlKWrYcBn§BI
Bn§cMNUlshB½n§.
munis
Municipal bonds (munis) are tax-exempt bonds issued by state, local gov.t and other public entities
They are similar to treasury and corporate bonds, except income is exempt from the Federal income
taxation
 Municipal bonds
- Bonds mankatBVkic©TUeTA
Chapter I: What is Investment Management?
(General Obligation bonds)
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dUcmUlb½RtrdæaPi)alEdl
nig)anFanaedayGMNacBn§rbs;Gñkecj
Like gov.t securities & secured by issuer's taxing power
- cMNUlrbs; bonds
(Revenue bonds)
cMNUl)anbegáItedayKMeragpþl;mUlniF
iedIm,Ibg;karR)ak;eTAkan;Gñkkan; bonds
Income generated by the project provide funds to pay interest to bondholders
3. Bonds Rkumh‘unrYmTun Corporate bonds
CabMNulmanry³eBlEvg
)ane)aHedayRkumh‘unrYmTunÉkCn
CatYya:gbg;karR)ak; Bak; kNþalqñaM
Chapter I: What is Investment Management?
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nigpþl;mk[vijnUvtMélBitrbs; bond
enAeBldl;Gayukalrbs;va.
(Long-term debt issued by private corporations, Typically paying semiannual coupons and returning
the face value of the bond at maturity)
lkçN³Biess²sMxan;rbs; bondRkumh‘unrYmTun
(Main features of corporate bond)
-
tMélrbs;bNѽ Par value = face value (CaTUeTA
$1000)
GRtakarR)ak; Coupon rate = interest rate
bg;elItMélrbs; bond
-
(Coupon rate = interest rate to be paid on the face of the bond)
-
Gayukalrbs;bNѽ
kalbriecäTCak;lak;enAeBlcMnYnR)ak;edI
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mrbs; bondRtUv)anTTYl (Maturity: Specified date at which the
principal amount of a bond is paid)
-
TinñpleBldl;Gayukal ³
GRtaTamTarenAelITIpSarelI bondmYy
(Yield-to-maturity: the rate required in the MK on a bond)
-
karehAmkvij ³ GnuBaØatm©as;bMNulTij
bond mkvijmuneBldl;kalbriecäTGayu
kalrbs;va (Call provision: allows the debtor the redeem the bond before maturity
date)
-
Bond
manFana = bond dak;bBa©aM (Secured bond =
Mortgage bonds)
- Bond
minmanFana ³ bond bMNul (Unsecured bond: Debenture
bonds)
Chapter I: What is Investment Management?
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-
luyEdl)an)at;bg;
kMnt;cMnYnBitR)akdqñaMnImYy²cMeB
aHkardl;Gayurbs; bond (Sinking fund  Set aside a certain amount
each year for retirement its bond)
Ex. rebobGankardkRsg;rbs; Corporate bond
elIkaEstmYy
Bonds
Cur YLD
BrkUn 8 3/4 10 13
Vol
30
High
691/2
Low
69
Close
69
Net Chg
+1/8
4. Common Stock
Chapter I: What is Investment Management?
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Common Stock
tMNagbNѽPaBCam©as;kñúgRkumh‘unrY
mTunmYy Gñkkan;bNѽmansiT§I
e)aHeqñat nigGacTTYlPaKlaP.
Common stock represents the ownership share in a corporation, Shareholders have voting
rights and may receive dividends

lkçN³Biessrbs; Common Stock (The Feature of Common
Stock)
- tMélrbs;sþúk Par value  face value (CaTUeTA $1)
- Book value = Total assets – Liabilities
Number of shares
- kñúgkaredaHdUrniyayéføRtUvKña
KWsresrCak;EsþgelITwkR)ak;Edl)ancrcar
Price of exchange depend on agreement
Chapter I: What is Investment Management?
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- tMélTIpSar
³
éføenAeBlsþúkKWkMBugedaHdUrkñúgkE
nøgTIpSar
-
Market value: The prices at which stock are trading in the marketplace
karTamTarmanGaTiPaBeRkayeKelIcMNUl
nig RTBüsm,tþi
Lowest priority claim on earning and assets.
- skþanuBlKµankMNt;cMeBaHPaKlaP
(Unlimited potential for dividends)
- TTYl)anPaKlaPCasac;R)ak;
b¤
PaKlaPCasþúk (Cash dividends/ stock dividends)
- karbMEbksþúk ³ karbMEbkbNѽrbs;;va
(Stock split  divides its shares)
Chapter I: What is Investment Management?
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- karcMNat;fñak;rbs; common stock
-
(Classified common stock)
GñkvinieyaK)anCab;Tak;Tgya:geRcInGM
BIkarekIneLIgéføelITIpSar
Investors more concerned about price appropriation
-
ral;b½NÑPaKh‘unsMrab;lk;RtUvsMusiT§i
BI SEC dUcCab½NÑkñúgKMerag
Stock Authorized “Authorized by SEC” as stock description
- sþúk)anlk;eKehAfa
(Stock Issued)
nigsþúkkMBg;edaHdUreKehA (Outstanding stock)
Chapter I: What is Investment Management?
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-
b½NÑPaKh‘unEdl)ane)aHehIyTijcUlmkvij
eKehA (Treasury Stock)
Ex. rebobGankardkRsg;rbs; stock elIkaEstmYy
52 weeks
Yld P.E Sales
High Low Stock Div. % Ratio 100s High Low Close Net Chg
257/8 207/8 ConsED 2.12 8.6 6
1607 243/4 241/2 243/4 +1/4
5. Preferred Stock
PaKh‘unGaTiPaB
bNѽEdlKµansiT§ie)aHeqñatkñúgRkumh‘
unrYmTunmYy CaFmµtabg;PaKlaPefrmYy
¬tamTMlab; karekIneLIgelI Preferred¦ (Nonvoting Shares in a
corporation, usually paying a fixed stream of dividends (usually accumulative preferred))
Chapter I: What is Investment Management?
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lkçN³Biessrbs; Preferred Stocks (The features of Preferred
Stocks)
TTYl)anPaKlaPmunb½NÑPaKh‘unFmµta
tamGRtaefr (Preferred stock as dividend before stock)
- CamUlb½RtkUnkat; nigKµanGayukal (A
-
hybrid securities A perpetuity (no maturity)
-
TTYl)anRTBümunb½NÑPaKh‘unFmµtaeB
lRkumh‘unRbkasrMlay (Preferred stock as to
assets upon Corporation liquidation before common stock)
-
KµansiT§icUlrYmRbCMu nige)aHeqñat
(No voting right and meeting)
Chapter I: What is Investment Management?
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-
ehATijb½NÑPaKh‘unGaTiPaBcUlvijenA
éf¶kMNt; nigtMélEdl)ankMNt;c,as;las;
(Callable preferred stock at a specified date and price)
-
GacbþÚeeTACaPaKh‘unFmµtaenAcenøa
Héf¶EdleK)anpþl;eGay (Convertible to common stock at the
exercise date)
ebIqññaMNamin)anRbkasEbgEckPaKlaP
qñaMenaHCMBak;PaKlaB (Cumulative dividend in arrear)
- ebIqññaMNamin)anRbkasEbgEckPaKlaP
qñaMenaHmin)anPaKlaB (Non Cumulative dividend in arrear)
- )anTTYlcMENkbEnßmBIb½NÑh‘unFmµt
a (Participation)
-
Chapter I: What is Investment Management?
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min)anTTYlcMENkbEnßmBIb½NÑh‘unF
mµta (Non Participation)
- manhaniP½yx<s;Cag Bond rbs;Rkumh‘un
-
(Riskier than the firm's bond)
-
Outstanding Stock = Stock Issued – Treasury Stock
6. mUlb½RtEdlGacpøas;bþÚr)an Convertible Security
mUlb½RtEdlGacpøas;bþÚr)anedaym©as;eTA
kñúgmUlb½Rtd¾éTeTot
Its owner into another security can convert security
III. TIpSarmUlb½Rt Security Market
1. rcnasm<n§½TIpSar Market structure
Chapter I: What is Investment Management?
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TIpSarmUlb½Rt
KWCakEnøgEdlCYbCMuKña
)anbegáItsMrab;Gñklk;
nigGñkTijénRTBüsm,tþiCa hirBaØvtßú (Security
market is a meeting place established for buyers & sellers of financial assets)
- TIpSaredaHdUredaypÞal; Direct search markets
CaTIpSarEdlGñklk;
nigGñkTijRtUvEsVgrkGñkd¾éTeTotedaypÞa
l;
The markets where buyers and sellers must seek each other out directly
- TIpSarQµÜjkNþal Brokered market
TIpSarsMrab;kMéreCIgsar
EdlBYkeKminykluyvinieyaKeTAeRbIR)
as;kñúgmUlb½Rt EdlBYkeKedaHdUr
(The
markets for commission sales people who need not invest their owner fund in the securities they sell)
Chapter I: What is Investment Management?
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TIpSarQµÜjkNþal Dealer market
TIpSarsMrab;buKÁl
b¤Rkumh‘unmYydak;edImTunrbs;xøÜneda
ymanhaniP½ykñúgkar
vinieyaKelImUlb½Rt
edIm,ImansnñiFimUlb½Rt
ehIyeFVIkaredaHdUrva. (The markets for an individual or a firm
-
that puts its own capital at risk by investing in a security in order to carry an inventory of the
security and make a market in it)
-
TIpSaredjéfø Auction markets
TIpSarEdlBaNiC¢krTaMgLayCYbKñaenA
kEnøgsmrmümYyedIm,ITij b¤lk;RTBü
sm,tþi .
Chapter I: What is Investment Management?
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BYkeKGacTTYlGacTTYléføGacRBmeRB
ogKñaeTAvijeTAmk nigCYysnSMrvag
Kmøat bid nig ask. (The markets where all traders in a good meet at one place to
buy or sell an asset. They can arrive at mutually agreeable price & save the bid-ask spread)
2. TIpSarrUbIyvtßú
Capital markets
nigTIpSarmUlFn Money and
TIpSarhirBaØvtßúCaFmµta)anEbgEckCaBI
rKW (Financial markets are traditionally segmented into)
- TIpSarrUbIyvtßú Money market
TIpSarsMrab;karvinieyaKry³eBlxøI .
karvinieyaKTIpSarrUbIyvtßúrYmman ³ T-bill
Certificates of Deposit (CD), Commercial Paper, Banker's acceptance,
Chapter I: What is Investment Management?
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Eurodollar & Repurchase Agreement (REPOS), Banker's call, and LIBOR
market.
The market for short-term investments. The money market investment includes: T-bill, Certificates
of Deposit (CD), Commercial Paper, Banker's acceptance, Eurodollar & Repurchase Agreement
(REPOS), Banker's call, and LIBOR market.
- TIpSarmUlFn Capital markets
TIpSarsMrab;karvinieyaKry³eBlEvg .
karvinieyaKTIpSarmUlFnrYmman Bonds,
Preferred Stock, Common Stock , other securities ( such as Option, future contract)
The market for long-term investments. The capital market investments include: Bonds, Preferred
Stock, Common Stock , other securities ( such as Option, future contract)
3. etImUlb½RtRtUv)anedaHdUrya:gdUcemþc?
How securities are traded?
TIpSardMbUg The primary markets
TIpSarEdlmUlb½RtfµIKWRtUv)anTij
niglk;sMrab;elIkdMbUg

Markets where new securities are purchased & sold for the first time
Chapter I: What is Investment Management?
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- karpþl;CasaFarN³elIkdMbUg Initial Public
Offering (IPOs)
Tak;Tgkarlk;mUlb½RtelIkdMbUgeTA
kan;saFarN³TUeTAedayFnaKarikvinieya
K ¬cuHkic©RBmeRBog¦
EdlCaGñkmanÉkeTskñúgmUlb½Rtma:X
ItFIg.
Involves selling securities to the general public by investment bankers (underwriters) who are
specialized in marketing security
- kEnøgsaFarN³ Private Placement
Tak;Tgkarlk;Edl)ancrcarCamYyGñkTijC
ak;lak; dUcRkumh‘unFanara:b;rg
Chapter I: What is Investment Management?
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Rkumh‘un CYykñúgkaredaHdUr.
kEnøgÉkCnminmankarcuHbBa¢ICamYy
nwgkMéreCIgsarkaredaHdUr
mUlb½RteT. A negotiated sale involving a specific buyer such as insurance
company, mutual funds. Private placements do not have to be registered with the Security and
Exchange Commission (SEC)

TIpSaTIBIr The Secondary markets
TIpSarEdlmUlb½RtkMBugmanKWRtUv
)anedaHdUrkñúgcMeNamGñkvinieyaK
Markets where existing securities are traded among investors
- TIpSaredjéfø Auction markets
TIpSarEdlGñkcUlrYmTaMgLaysMedAe
TArkkEnøglk;mYyedIm,IbMeBjRbtibtþi
Chapter I: What is Investment Management?
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kar rbs;xøÜn
Markets where all participants converge in one location to
complete the transaction (NYSE)
- TIpSarQµÜjkNþal Dealer markets
TIpSarEdlmanlkçN³edayvtþmansnñiFi
nig R)ak;cMeNjedayEbgEckeday KMlat
Markets characterize by presence of inventory & profits is divided by the spread (OTC)

TIpSarTIbI The Third markets
sMedAelIBaNiC¢kmµénkaredaHdUrral;
mUlb½RtmanenAkñúgtaragelI OTC
Refer to trading of exchange list securities on the OTC (Over The Counter) an OTC
market in NYSE

TIpSarTIbYn The Fourth markets
Chapter I: What is Investment Management?
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sMedAelIkarBaNiC¢kmµedaypÞal;rvagG
ñkvinieyaKkñúgmUlb½RtEdl)ancuHbBa¢I
edaHdUr
edayKµanR)ak;cMeNjénQµÜjkNþal (Refer to
direct trading between investors in exchange listed securities without the benefit of a broker)
nig FnaKarvinieyaK (Mutual funds and
4. Mutual funds
Investment banks)
k>
Mutual funds
Rkumh‘unEdlpþúM
nigRKb;RKgmUlniFirbs;GñkvinieyaK
Chapter I: What is Investment Management?
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nigbnÞab;mkRbmUlykkMér
karRKb;RKgmYycMeBaHRbtibtþikarTaM
genaH.
The firm that pooling and managing funds of investors & then collect a management fee for
operating them
 muxgar Functions
- rkSaÉksar nigcat;Ecg Record keeping & Administration
- bEgVr nigEbgEck Diversification & divisibility
- manCMnajkñúgkarRKb;RKg Professional Management
- cMNayRbtibtþikarTab Lower transaction cost
x> FnaKarikvinieyaK Investment Banker
Chapter I: What is Investment Management?
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mnusSEdlTTYlxusRtUvcMeBaHmUlb½
RtEdlpþl;CasaFarN³elIkdMbUgenAkñúgTI
pSarTImYy (IPOs)
People who are responsible for the initial public offerings of securities in the primary market (IPOs)
 muxgar Functions
- cuHkic©RBmeRBog (Underwriter)
pþl;karTUnµan (Advisor)
- CaQµÜjedaHdUr (Market dealer)
CaPñak;gar (Agent)
Chapter I: What is Investment Management?
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Ex.
karEbgEckKmøaténkarcuHkic©RBmeRBog
Allocation of underwriting Spread
éføRtUvbg; Price Paid
éføRtUvTTYl
Price Received
$20
$20.75
Rbsinlk;eTAkan;QµÜj
Managing Inv.t
$20.25
banker
if sold to dealers
$21.50
Other Syndicate
Rbsinlk;eTAkan;saFarN³
members
$20.75
if sold to public
$21.25
Selected Dealer
Rbsinlk;eTAkan;QµÜjkNÞal
group
if sold to brokers
Brokers
Chapter I: What is Investment Management?
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$21.25
$21.50
Rbsinlk;eTAkan;saFarN³
if sold to public
$21.50
$21.50
Rbsinlk;eTAkan;saFarN³
if sold to public
sMNYr
1> GVIeTACa Real Investment?
cUrbkRsaycMnucnImYy²
2>
etIRbePTénkarvinieyaKCahirBaØvtßúmanGV
IxøH? cUrerobrab;RbePTnImYy²
Chapter I: What is Investment Management?
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3>
etIehtuGVI)anCaGñkvineyaKcUlcitþkarviniey
aKeRcInEpñk Portfolio Investment?
ehIymanbu:nµanRbePTénkarvinieyaKeRcInE
pñkenH cUrerobrab;.
4>
cUrBnül;BIGñkedIrtYnaTIsMxan;kñúgkarvini
eyaKCahirBaØvtßú?
5> GVIeTAmUlbRt?
enAkñúgTIpSarmUlbRtmanGVIxøH?
Chapter I: What is Investment Management?
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6> cUrbgðajBIlkçN³BiesssMxan;² bonds
Rkumh‘unsaCIvkmµ.
7> cUrbgðajBIlkçN³BiesssMxan;² Common stock
PaKh‘unFmµta.
8> cUrbgðajBIlkçN³BiesssMxan;² Preferred stock
PaKh‘ungGaTiPaB.
9>
enAeBlEdlsMerccitþmUlbRtrbs;saCIvkmµeK
BicarNaelIcMnucGVIxøH? cUrbkRsay
10>
cUrbgðajBIdMeNIrkarTUTat;rbs;saCIvkmµen
AeBlcMeNj xat nigkS½yTun.
Chapter I: What is Investment Management?
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11> etIenAkñúgTIpSarrUbIvtßú
nigTIpSarmUlFnmanGVIxøH?
12>
cUrBnül;BIdMeNIrkarEdlmUlbRtRtUv)aneda
HdUrdUcemþc?
13> cUrBnül;BImuxgar Mutual Fund & Investment Banks.
14> cUrbgðajBIkarGantaragdUcxageRkam Tbill
- Find last price of T-bill and Ask yield
Maturity
Day to maturity
Jan 29’ 10
183
April 30’ 10
92
Chapter I: What is Investment Management?
Bid Asked
5.17 5.15
5.09 5.07
Chg
- 0.15
+ 0.16
Ask yield
?
?
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15> cUrbgðajBIkarGantaragdUcxageRkam Tnotes & T-bonds
cUrKNnatMélrbs; Asked nig Bid edaydwgfa Bid
price tUcCag :4
Rate
8 3/4
9 1/2
Maturity
Day to maturity
Aug 10
July 10n
Bid
119:16
Asked
119:18
112:28
Chg
-4
+3
Ask yield
5.39
6.45
16> cUrbgðajBIkarGantaragdUcxageRkam
Corporate bond elIkaEstmYy
Bonds
Cur YLD
BrkUn 8 1/4 10 ?
Chapter I: What is Investment Management?
Vol
125
High
843/4
Low
83
Close
82
Net Chg
-1/2
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17> cUrbgðajBIkarGantaragdUcxageRkam
Common stock elIkaEstmYy
52 weeks
Yld P.E Sales
High Low Stock Div. % Ratio 100s High Low Close Net Chg
332/3 301/4 ConsED 3.24
? 6
1607
363/4 351/2 361/4 +3/4
- tamkarGantarag
cUrbMeBjtMélenAkEnøgsBaØasYr nigrk
Income rbs;saCIvkmµ.
Chapter I: What is Investment Management?
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