Security Analysis and Portfolio Management Board Question Paper 2025

List out the major players in the financial markets.

What is long purchase? Illustrate with an example.

State any two functions of Nepal stock exchange.

Write about the factor influencing investment behaviour.

List out any four characteristics of bond.

Write the concept of efficient portfolio.

What are the major indicators of domestic macroeconomic?

Suppose you bought a share of stock at Rs 400 and sold it at Rs 500. Calculate capital gain yield.

Suppose you purchased 500 shares for Rs 250 at 60 percent initial margin requirement. How much do you have in your account? What is the debit balance in your margin account?

What is the value of a 9 percent perpetual bond if bondholders' required rate of return is 10 percent? Assume par value is Rs 1,000.

Describe the steps in the investment process.

Suppose that a price weighted stock market average is based on the closing price of five stocks. The divisor used in the calculation of stock market average is currently 0.8. The closing price for each of the five stocks in the stock market average today and exactly a year ago, when the divisor was 0.7 are as follows:

Calculate and interpret the duration of a 10% coupon bond making annual coupon payments if it has 5 years until maturity and has a yield to maturity of 8%.

The Asian Company paid Rs 25 per share dividend last year. The company will increase its dividend by 20 percent per year for next 2 years, after which the company will keep a constant growth rate of 6 percent per year forever. If the required rate of return on Asian stock is 15 percent, what is the value of stock today? Suppose the current share price for the firm is Rs 370, would you purchase the stock? [4+1]

Mr. Gopal Thapa buys on margin 500 shares of Kumari Bank Limited at Rs 325 per share. The initial margin is 50 percent and maintenance margin is 30 percent. If the price of the bank falls to Rs 275 per share, will Mr. Thapa receive a margin call?

What are the stages of the industry life cycle? Explain.

How do you calculate value of a coupon bond with finite maturity? Illustrate.

Distinguish between technical and fundamental analysis? Explain why technical analysis is important in making investment decision. [6+4]

Stock XYZ has an expected return of 10 percent and beta coefficient of 0.5. Stock ABC has expected return of 14 percent of 1.5. The market's expected return is 12 percent and risk free rate is 6 percent.
a. Calculate the required rate of return on stock XYZ and stock ABC.
b. Are the stocks fairly valued, undervalued, or overvalued?
c. According to CAPM, which stock is a better buy? [5+3+2]

Valuation of common stock is more complex than the valuation of bonds. Why?

After long period of market research, Pokhara Sunlight Company produces new products whose demand is very high. The firm projects an ROE of 20 percent, and it will maintain plowback ratio of 0.3. Its earnings will be Rs 30 per share. The investors' required rate of return is 16 percent.
a. Calculate growth rate.
b. Calculate value of stock.
c. Calculate dividend yield for the first year. [3+4+3]

Mr. Paudel, senior officer of the NIBL capital market, has just issued Rs 150 million amount of NIBL growth fund and investment in the stock portfolio. Observing the current situation of the stock market and a possible increase in the Nepalese market, he has shown interest in investing in stocks listed on the Nepal Stock Exchange. He asked for your advice on selecting a stock or portfolio of stocks. For that purpose, you have selected, among many stocks, Stock A and Stock B. You predict that the return on Stock A and Stock B for each stock will be given below: