Delhi University B.Com Syllabus & Question Paper Pattern
Subject: Investing in Stock Market
Guidelines for CBCS Revised Syllabus w.e.f. 2019-20
Generic Elective Paper
BCH 3.4 (a): “Investing in Stock Markets”
UNIT-I: BASICS OF INVESTING
Topic 1.Basics of Investment & Investment Environment
- Concept and Nature of Investment,
- Objectives of Investment,
- Investment Process,
- Types of Investing,
- Investment, Speculation and Gambling
Topic 2. Risk and Return
- Concept of risk and return.
- Types of risk.
- Risk – return trade off.
- Types of Investors
- Practical problems (Numericals) on calculation of return and risk, Average Return (based on Arithmetic Mean) and Expected return and risk calculation. Coefficient of Variation(Impact of inflation and taxes not to be covered)
Topic 3. Instruments of Investment – Equity shares, Preference shares, Bonds and Debentures
- Characteristics and distinctions between different instruments by individuals and institutions
UNIT II: INDIAN SECURITY MARKETS TOPIC SCOPE & FOCUS
Topic 1: Primary Markets (IPO, FPO, Private placement, Offer for sale):
- Coverage of all concepts (IPO, FPO, Private placement, Offer for sale)
- Role and importance of Primary market.
- Focus on IPO and Book Building process.
Topic 2. Secondary Markets (cash market and derivative market: Futures and Options)
- Role and Importance of secondary market and comparison with Primary Market.
- Introduction to basic concepts and role of cash & derivatives market.
- Futures and Options: Use of these as trading instruments and Distinctions between Futures & Options.
- Call and Put Options (Fundamentals and Payoffs).
- No practical problems/ Numericals on Futures.
Topic 3. Market Participants: Stock Broker, Investor, Depositories, Clearing House, Stock Exchanges. Role of stock exchange
- Focus on Roles of the participants and distinguishing features
Topic 4. Stock exchanges in India: BSE, NSE, MSEI
- Features and Overview
Topic 5. Security Market Indices: Nifty & Sensex
- Concept of stock indices
- Composition of an index (Fundamental factors considered by Nifty & Sensex).
- Indices as barometers of economy,
Topic 6. Sources of financial information
Topic 7. Trading in securities: types of orders, using brokerage and analyst recommendations
- Overview of all concepts
- Process of trading (Opening a demat account etc),
- Rolling settlement,
UNIT III: FUNDAMENTAL ANALYSIS
Topic 1. Top down and bottom up approaches, Analysis of international & domestic economic scenario, Industry analysis
- Focus on EIC framework Concepts and components
Topic 2. Company analysis (Quality of management, financial analysis: Both Annual and Quarterly, Income statement analysis)
- Overview of concepts and components of company analysis both qualitative as well as quantitative factors.
- Focus on concepts and Interpretation
Topic 3. Position statement analysis including key financial ratios, Cash flow statement analysis, Industry market ratios: PE, PEG, Price over sales, Price over book value, EVA), Understanding Shareholding pattern of the company
- Interpretation of all ratios andPractical questions/Numericals on Key Ratios: EPS, DPS, PE, PEG, Price over sales, Book value per share, Price over book value, Dividend Yield, Earning Yield, Debt Equity Ratio
UNIT-IV: TECHNICAL ANALYSIS
Topic 1. Trading rules (credit balance theories, confidence index, filter rules, market breadth, advances vs declines)
Concept and interpretation of
- The credit balance theory
- Barron’s confidence index
- Filter rules
- Market breadth Analysis
- Advances – decline ratio
Topic 2. Charting (use of historic prices, simple moving average and MACD) basic and advanced interactive charts.
- Concept and interpretation of all charts.
- Line, bar, candle stick and point and figure charts
- Focus on moving average and MACD charts,
- Understanding of support and resistance levels
Topic 3. Do’s & Don’ts of investing in markets
- Overview of Principles of sound investing and pitfalls
UNIT-V: INVESTING IN MUTUAL FUNDS
Topic 1. Concept and background on Mutual Funds: Advantages, Disadvantages of investing in Mutual Funds
- Concept and Structure of Mutual Funds
- Evolution of MF in Indian context
- Advantages & Disadvantages
Topic 2. Types of Mutual funds: Open ended, close ended, equity, debt, hybrid, money market, and entry load vs. exit load funds, Factors affecting choice of mutual funds
- Discussion on open and close ended MFs; equity, debt, hybrid funds and money market funds; interpretation of loads and expense ratio
- No practical problems/ Numericals on Loads, Expense Ratio etc.
- Coverage of factors affecting choice of MF
Topic 3. CRISIL mutual fund ranking and its usage,
- CRISIL rankings in respect of MF to be covered Calculation and use of Net Asset Value
- Numerical on calculation of NAV of the Mutual fund.
- Return on MF not to be covered.
Pattern of expected question paper for the University Examination.
- Duration 3 Hours
- Total marks: 100 (25 Marks Internal Assessment + Question Paper should be of 75 Marks)
- Comprehensive coverage of entire syllabus.
- Question paper should comprise 5 questions of 15 marks each.
- Internal choice must be given in all questions.
- The questions may have sub parts.
- Not more than two questions in the paper may be practical (numerical) based. The numerical component to have a weightage of 8 marks in each of these questions.
Practical/ numerical problems may only be from the topics mentioned in the guidelines.