MS-44 Solved Assignment

Old Samples – Ignou MS-44 Solved Assignment

Q. Define Investment. Discuss the effect of changes in investment environment on investment decisions. Distinguish between Investment, Speculation and Gambling. What is the usefulness of a Sound Investment Plan?

Answer. In finance, the purchase of a financial product or other item of value with an expectation of favorable future returns. In general terms, investment means the use money in the hope of making more money……

An understanding of the operational details of the market would be useful. Investment decisions to buy/sell securities taken by individuals and institutions are carried through a set of rules and regulations. There are markets – money and capital – that function subject to such rules and established procedures and are, in turn, regulated by legally constituted authority…

When gambling, the probability of losing an investment is usually higher than the probability of winning more than the investment. In comparison to speculation, gambling has a high risk of losing the investment……

An Investment plan brings you one step closer to the dreams you have for yourself or your family! By inspiring you to follow a disciplined or systematic approach towards savings, these plans aid in accumulating a lump sum amount, so that it can be utilized to make your dreams come to fruition……

Q. What are oscillators? How are they different from moving averages? Would you recommend the usage of an oscillator? Explain.

Answer. Oscillators are indicators that are used when viewing charts that are non-trending. Moving averages (MA) and trends are paramount when studying the direction of a stock. A technician will use oscillators when the charts are not showing a definite trend in either direction…….

During the price breakout, the oscillator will remain in the overbought or oversold range for an extended period of time depending on the extent of the breakout. Herein lies the dilemma that a trader is faced with. Should the trader buy the bullish breakout in the face of an overbought oscillator reading or, conversely…..

A 10-day MA would average out the closing prices for the first 10 days as the first data point. The next data point would drop the earliest price, add the price on day 11 and take the average, and so on as shown below………

Get Ignou Mba MS 44 Solved Assignment.When the stock is in either an overbought or oversold situation, the true value of the oscillator is exposed. With oscillators a chartist can see when the stock is running out of steam on the upside, the point at which the stock moves into an overbought situation…….

Q. Define the various forms of the market efficiency. State the anomalies in the Efficient Market Hypothesis.

Answer. Market Efficiency is a concept: The efficient-market hypothesis (EMH) states that it is impossible to "beat the market" because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information…….

In efficient markets, prices become not predictable but random, so no investment pattern can be discerned. A planned approach to investment, therefore, cannot be successful……

To test for this, consistent upward or downward adjustments after the initial change must be looked for. If there are any such adjustments it would suggest that investors had interpreted the information in a biased fashion and hence in an inefficient manner……..

Theoretically though, once an anomaly is discovered, investors attempting to profit by exploiting the inefficiency should result its disappearance. In fact, numerous anomalies that have been documented via back testing have subsequently disappeared or proven to be impossible to exploit because of transactions costs……..

Download Full MS44 Ignou Solved Assignment Security Analysis and Portfolio Management for July-Dec. If the actual reported earnings differs significantly from what was expected, then this earnings surprise can have a large effect on the subsequent stock price for an extended period of time……