Course Manual-2014-15-PGEP

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SYLLABUS

PGEP-FM, 2014-15

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Quadmester-1

S.No. Paper Paper Code Covered by Page No.

1. Financial Institutions & Markets PGEP(FM) 101 NIFM 03-04

2. Capital Market Operations PGEP(FM) 102 NSE 05-07

3. Quantitative Methods for Financial Markets PGEP(FM) 103 NIFM 08-09

4. Accounting and Taxation for Mangers PGEP(FM) 104 NIFM 10-11

5. Economics for Financial Markets PGEP(FM) 105 NIFM 12-13

6. Introduction to Financial Planning PGEP(FM) 106 NSE 14-15

Quadmester-2


1. Corporate Finance including Merger & Acquisitions PGEP(FM) 201 NIFM 16-18

2. Financial Reporting Standards PGEP(FM) 202 NIFM 19-20

3. Computer Application in Finance PGEP(FM) 203 NIFM 21-22

4. Corporate and Capital Market Laws PGEP(FM) 204 NSE 23-23

5. Commodities Market Operations PGEP(FM) 205 NSE 24-25

6. Derivative Market Options PGEP(FM) 206 NSE 26-27

Quadmester-3


1. Financial Econometrics PGEP(FM) 301 NIFM 28-29

2. Bank Management PGEP(FM) 302 NIFM 30-31

3. Foreign Exchange & Currency Market PGEP(FM) 303 NIFM 32-34

4. Financial Valuation and Modelling PGEP(FM) 304 NSE 35-36

5. Technical Analysis PGEP(FM) 305 NSE 37-38

6. Equity Research PGEP(FM) 306 NSE 39-40

Quadmester-4


1. Behavioural Finance PGEP(FM) 401 NIFM 41-43

2. Wealth Management PGEP(FM) 402 NSE 44-45

3. Investment Banking PGEP(FM) 403 NSE 46-48

4. Venture Capital & Private Equity PGEP(FM) 404 NSE 49-50

5. Mutual Funds & Fixed Income Securities PGEP(FM) 405 NSE 51-52

6. Project Work PGEP(FM) 406 NIFM/NSE 53

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FINANCIAL INSTITUTIONS & MARKETS

Course Code: PGEP(FM) 101

OBJECTIVES

To provide an overall understanding of Indian Financial System. It aims at

discussing the different components of Indian Financial Systems viz.,

Financial Institution, Financial Markets and Financial Instruments.

CONTENTS

Module 1: Financial System and Economic Development

• Financial system & economic development,

• Interest rate - components & dynamics,

• Financial Intermediation,

• Regulation - aspects and institutional framework in India,

• Financial Sector Reforms.

Module 2: Money Market

• CCIL, Money market,

• Government securities market,

• Money market instruments - call money and notice money, treasury

bills (TBs),

• Commercial papers (CPs),

• Certificate of deposits (CDs),

• Commercial bills, repos,

• Regulation - aspects and institutional framework in India.

Module 3: Capital Market

• Capital Market - primary market, secondary market,

• Trends in trading,

• Volume and capitalization: BSE and NSE trading platforms,

• Screen based trading: trading clearing & settlement,

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• Credit rating,

• Merchant banking,

• CMR Regulation - aspects and institutional framework in India.

Module 4: Foreign Exchange and Derivative Market

• Foreign Exchange Market - concept, organization and dynamics,

• Financial Derivatives - derivative markets in India,

• derivative instruments; trading of derivatives,

• Regulation - aspects and institutional framework in India.

Module 5: Select Financial Instruments & Financial Services

• Global Depository Receipt & American Depository Receipt,

• Fixed income instruments,

• Mutual funds,

• Insurance,

• Pension,

• Warrants and Convertibles,

• Issuance and listing of securities - Follow on issues,

• Rights issue,

• Book Building,

• Security Contract & Regulatory Act.

Suggested Readings:

• Khan MY: Indian Financial System, Tata McGraw Hill, and New Delhi,

2000.

• Bhole, L M: Financial Institutions and Markets: Structure Growth and

Innovations.2nd edition: New Delhi: Tata McGraw Hill, 1992.

• Srivastava, R M: Financial Institutions in Indian Financial Institutions. 3rd

revision ed. Mumbai: Himalaya Publishing House, 1996.

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CAPITAL MARKET OPERATIONS


OBJECTIVES

This course is designed to help the students in understanding the capital

market trading, clearing, settlement and risk management processes of NSE.

The students will also learn the eligibility criteria for membership of NSE,

important regulatory aspects and valuation concepts.

CONTENTS

Module 1: Indian Securities Market – an Overview

• Introduction,

• market segments, primary market, secondary market,

• products and participants,

• derivatives market, reforms, research,

• Corporate and government securities market.

• NSE membership - stock brokers, sub-brokers, broker-clients

relationship, trading mechanism, code of ethics etc.

Module 2: Trading

• Introduction,

• NEAT system, market types, corporate hierarchy,

• local databases,

• market phases,

• order management, trade management, auction,

• limited physical market,

• RETDEBT market (RDM), trading,

• Information downloaded to trading members and internet broking.

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Module 3: Clearing and Settlement

• Introduction,

• key terminologies,

• transaction cycle, settlement process,

• settlement agencies, risks in settlement, securities settlement, funds

settlement,

• shortages handling,

• risk containment measures,

• international securities,

• identification number,

• demat and electronic transfer of securities,

• investor protection fund,

• clearing software – data and reports download, file transfer protocol.

Module 4: Legal Framework and Fundamental Valuation Concept

• Introduction to various Acts governing securities Market

• Securities Contracts (Regulation) Act, 1956,

• Securities Contracts (Regulation) Rules, 1957,

• Securities and Exchange Board of India Act, 1992,

• SEBI (Stock Brokers & Sub-Brokers) Regulations, 1992,

• SEBI (Prohibition of Insider Trading) Regulations, 1992,

• SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to

Securities Markets) Regulations, 2003,

• The Depositories Act, 1996,

• Indian Contract Act, 1872,

• The Companies Act, 1956,

• Income Tax Act, 1961,

• Money Laundering Act, 2002.

• Fundamental Valuation Concepts

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• Elementary statistical concepts,

• understanding financial statements,

• Time value of money and equity research.

Market Simulation Lab - NLT

Students will develop financial market skills such as trading, investment,

portfolio management etc. through practice on NSE Learn to Trade (NLT), an

internet based market simulation software.

P.S.: Students must read daily news papers like The Economic Times,

Financial Express etc., watch business channels e.g. CNBC, NDTV Profit, ET

Now etc. and get updates from websites of SEBI, NSE etc.

Suggested Readings:

• Capital Market (Dealers) Module, Workbook from NSE

QUANTITATIVE METHODS FOR FINANCIAL MARKETS

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OBJECTIVES

The paper is expected to review various quantitative techniques used in

financial markets. It aims at developing usage of quantitative skills in financial

markets and attempts to make participants comfortable in usage of these

techniques with the help of observed data and forecast. It helps wherever

possible to predict / forecast prices or returns and interest rates.

CONTENTS

Module 1: Useful Mathematical Functions:

• Graphing and solving linear functions;

• Simultaneous equations;

• Simple Polynomials;

• Discrete and Continuous Compounding;

• Discounting - link to interest;

• logarithmic and exponential functions;

• Interpretation within a business context.

Module 2: Descriptive and Inferential Statistics

• Descriptive Statistics: data presentation;

• Frequency distributions;

• Measures of Central Tendency;

• Dispersion;

• Summaries of data and usefulness of trends, patterns and exceptions.

Module 3: Probability and Sampling Technique

• The concept of probability;

• Discrete and continuous random variables;

• Theory of distributions;

• Expected values;

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• Probability Density Function: Links to business data; Population -

samples;

• Probalistic and Non Probalistic Sampling.

Module 4: Hypothesis Testing

• Hypothesis testing - Parametric and Non-Parametric approach;

• Confidence intervals - interpretation;

• Usefulness in business context.

Module 5: Parametric Data Analysis

• Regression analysis;

• Correlation, Scatter diagrams;

• OLS techniques;

• Interpretation of results;

• Multiple regression;

• Strengths of evidence - statistical testing;

• Link to decision - making in a business context.

Suggested Readings:

• Cochran, William G.: Sampling Techniques, 3rd Edition, Paperback, Wiley.

• Dominick Salvatore & Derrick Reagle: Schaum's Outline of Statistics and

Econometrics,

2nd

Revised Edition, McGraw Hill Companies.

ACCOUNTING AND TAXATION FOR MANAGERS

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OBJECTIVES

To provide the participants a thorough grounding of Commercial Accounting

concepts and Financial Statements with analysis of Financial Statements &

Taxation practices related to Capital Gains.

CONTENTS

Module 1: The Foundation

I Conceptual Framework of Financial Accounting

• Users of Accounting Information and their Information Needs;

• Basic Concepts and Conventions & Assumptions;

• Accounting Equation and the rules of Debit and Credit.

II Corporate Financial Statements:

Legal Requirement relating to preparation of Financial Statements of

Companies

a. Profit &Loss Account

• Features of Profit and Loss Account and its preparation;

• Understanding the various items of Profit and Loss Account

and their treatment.

b. Balance Sheet

• Features of Balance Sheet;

• Understanding the various items of Balance Sheet and their

treatment;

• Notes to Accounts and Accounting Policies.

c. Cash Flow Statement

• Understanding, Construction and interpretation of Cash

Flow Statement.

Module 2: Annual Reports

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Contents of Annual Report

• Auditors' Report;

• Directors' Report;

• Corporate Governance Report;

• Segment Reporting;

• Value Reporting.

Cases: Any two annual reports shall be discussed.

Module 3: Analysis of Financial Statements

• Common-size Financial Statement;

• Ratio Analysis; Liquidity Ratios, Solvency Ratios, Activity Ratios &

Profitability Ratios;

• Ratios Useful for Shareholders and Investors;

• Du-Pont Analysis;

• Altman’s Z score.

Module 4: Taxation

• Overview of IT Act;

• Securities Transaction Tax (STT);

• Capital Gains (Short Term Capital Gain and Long Term Capital

Gain);

• Services Tax;

• Income from Business and Profession.

Suggested Readings:

• Dr. T.P. Ghosh: Accounting for Managers, Taxman Publication

• D.S. Rawat: Student Guide to Accounting Standards, Taxman

Publication

• Ambrish Gupta: Financial Accounting for Management, Pearson

Publication

• Vinod Singhania: A Student Guide to Income Tax, Taxman Publication

ECONOMICS FOR FINANCIAL MARKETS

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OBJECTIVES

This paper focuses on a few simple but powerful economic concepts that

enable us to explain features of financial markets. The paper also

demonstrates the process of important link between the financial system

and the performance of the aggregate economy.

CONTENTS

Module 1: Economics for Financial Markets – Introduction

• Why Study Money, Banking, and Financial Markets;

• An Overview of the Financial System;

• Understanding Interest Rates and its behavior;

• The Risk and Term Structure of Interest Rates;

• The Stock Market, the Theory of Rational Expectations, and the

Efficient

Module 2: Monetary Theory

• The Demand for Money

• The Keynesian Framework and the ISLM Model

• Monetary and Fiscal Policy in the ISLM Model

• Aggregate Demand and Supply Analysis

• Transmission Mechanisms of Monetary Policy: The Evidence

• Money and Inflation

Module 3: Central Banking and the Conduct of Monetary Policy

• Structure of Central Banks

• Multiple Deposit Creation and the Money Supply Process

• Determinants of the Money Supply

• Tools of Monetary Policy

• Conduct of Monetary Policy: Goals and Targets

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Module 4: Models of Securities Prices in Financial Markets

• Single-Period Models

• Multiperiod Models

• Continuous-Time Models

• Fundamentals of Equilibrium Models

• CAPM

• Multifactor Models

Suggested Readings:

• Mishkin, Frederic S.(2004). The economics of money, banking, and financial

markets. 7th ed.Pearson The Addison-Wesley series in economics.

• Campbell, J., A. Lo, and G. MacKinlay. (1996). The Econometrics of Financial

Markets. Princeton, NJ: Princeton University Press.

• Dothan, U. (1990). Prices in Financial Markets. New York: Oxford University

Press.

• Fama, E. (1976). Foundations of Finance. New York: Basic Books.

INTRODUCTION TO FINANCIAL PLANNING


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OBJECTIVES

This paper serves individuals who are, or will be, actively developing their

own personal financial plans.

CONTENTS

Module 1: Foundations of Financial Planning

• Understanding the Financial Planning Process

• Your Financial Statements and Plans

• Personal Financial Planning – The Process

• Setting Financial Planning Objectives

• Managing Your Taxes

Module 2: Managing Basic Assets

• Managing Your Cash and Savings

• Making Housing and Automobile Decisions

• Managing Credit: Borrowing on Open Account, Using consumer Loans

• Using Insurance Effectively: Basic Insurance Principles, Life Insurance and Social

Security, Health Insurance, Property and Liability Insurance

Module 3: Managing Assets

• Basic Investment Principles

• Investing in Stocks and Bonds

• Making Securities Transactions

• Investing in Mutual Funds

• Investing in Fixed-Income Securities

• Income Tax Planning

Module 4: Retirement and Estate Planning

• Meeting Retirement Goals

• Preserving Your Estate

• Estate Planning Principles

• Planning for Death Taxes

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• Will Substitutes in the Estate Plan

• Planning for Business Interests

Suggested Readings:

• J. Gitman, Lawrence and D. Joehnk Michael. Personal Financial Planning.

Harcourt Brace College Publishers, The Dryden Press.

• G. Victor Hallman and Jerry S. Rosenbloom. Personal Financial Planning.

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CORPORATE FINANCE INCLUDING MERGERS & ACQUISITION


OBJECTIVES

Corporate Finance aims to provide a conceptual foundation to the theoretical aspects of

corporate finance. The end goal is to provide students with the tools necessary to

conduct accurate financial analysis as well as to analyze financial scenarios using

financial theory.

Furthermore, Mergers and Acquisitions discuss the organic and inorganic growth

choices as pursued by the firms.

The course will sensitize the students about the need for corporate restructuring for

achieving fast growth and maximize shareholders value in the context of ever increasing

competition thrown up by liberalization and globalization of Indian economy.

It is expected that after pursuing this course the students will be able to develop

competencies in identifying opportunities/areas for mergers, demergers,

amalgamations and takeovers etc., carrying out valuations involved therein, building up

strategies for them and evaluating the post restructuring performance of the enterprise.

CONTENTS

Part A: Corporate Finance

Module 1. Foundation of Finance

• Goals and Functions of finance

• Applications of Time Value of Money

Module 2. Risk and Return

• Finding the Risk and Return of Securities – Ex-post and Ex ante

• Risk and Return on a Portfolio - 2 Security Case and 3 -Security

Case: Capital Assets Pricing Model

Module 3. Cost of Capital and Valuation of Securities

• Finding the Cost of Capital for various sources of finance

• Weighted Cost of Capital: Book Value and market Value

Proportions

• Equity and Bond Valuation

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Module 4. Capital Budgeting: Techniques and Applications

• Determination of Relevant Cash Flows

• Capital Budgeting Techniques and their application

• Capital Budgeting under conflicting situations

• Capital Rationing

• Investment Decision under Risk and Uncertainty

Module 5. Capital Structure & Dividend Policy

• Operating, Financial and Total Leverage FBIT-FPS Analysis

• Capital Structure Theories

• MM Hypothesis with and without taxes

• Capital Structure Decision Making

Module 6. Dividend Policy

• Dividend Policy - Theories, Mechanics and Practices of Dividend

Payment

• Dividend Policy in India: Some Recent Evidence

Module 7. Working Capital Management - An Overview:

• Nature of Working Capital

• Planning of Working Capital

• Computation of Working Capital and Management the

Constituents of Working Capital

• Cash, Inventory and Receivables

Part B. Mergers and Acquisitions

Module 8. Introduction to Corporate Restructuring

• Introduction, Scope & Types: : Expansion, Downsizing and

Restructuring

• Objectives & Motivations of Mergers, Takeovers, Acquisitions &

Demergers

Module 9. Strategy, Diversification, Types & Characteristics

• Analytical & framework for Generic & Corporate Strategies

• Economic Rationales for major types of mergers

• Managerial, Financial& Organizational Synergy

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• Due Diligence Process & Value chain analysis

Module 10. Valuation- The Financial Methodology

• Valuation Models; Valuation of listed and unlisted companies,

Modes of valuation

• Fixing price for acquisition.

• Determination of share exchange ratio on merger, Share Swaps

Module 11. Restructuring Techniques and Procedures

• Techniques of and Procedure for organizing takeover bids

• Search for acquisition of Target Company

• Procedure for Takeovers and Acquisitions

• Code of conduct, SEBI Takeover Regulations

Module 12. Downsizing & Antitakeover strategies

• Forms of Demergers & Reverse

• Mergers, Divestitures

• Equity carve out; Master Limited Partnerships

• Leveraged buyout and Management buyout

• Defensive & Anti-takeover strategies & Cost of Such strategies

Suggested Readings:

• Barley Mayers: Corporate Finance.

• Khan-Jain: Financial Management.

• Godbole, Prasad & G, 'Mergers, Acquisitions and Corporate Restructuring "Vikas

Publishing House Pvt. Ltd, 2009 written as Godbole: MACR.

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FINANCIAL REPORTING STANDARDS


OBJECTIVES

India has been preparing for IFRs conversions in the times to come. IFRS’s as a Financial

Reporting Standards are revolutionary nature and based on principles despite the

criticism and carve outs they draw across the globe. Approximately 130 nations and

reporting jurisdictions permit or require IFRS’s for domestic listed companies. This

paper on Financial Reporting Standards strengthen the knowledge of recognition of

assets, liability, equity and income & expense in Indian Accounting Standards vis-a-vis

IFRS’s.

CONTENTS

Module1. A review of National Accounting Standards, International Accounting

Standards and US GAP

• General Accounting Standards

o Disclosure of Accounting Policy – AS1 - IAS1

• Revenue Recognition

o Revenue Recognition – AS9 - IAS18

Module2. Asset Related Accounting Standards

o Accounting for fixed assets – AS10 - IAS16

o Depreciation Accounting – AS6 - IAS16

o Accounting for leases - AS19 - IAS17

o Accounting for intangible assets – AS26 – IAS38

Module 3. Disclosure Related Accounting Standards

o Cash Flow Statements – AS3 – IAS7

o Segment Reporting – AS17 – IAS14

o Related party disclosure – AS20 – IAS33

o Discontinuing operation – AS24-IAS35

Module 4. Investment Related Accounting Standards

o Accounting for Investments – AS13 – IAS39 & IAS40

o Accounting for amalgamation – AS14 – IAS22

o Consolidated Financial Statements – AS21 – IAS27

o Accounting for investments in associates in consolidated Financial

Statements – AS23 – IAS28

o Financial Reporting of Interest in Joint Venture – AS27 – IAS31

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Module 5. Financial Instrument Standards

o Financial Instruments: Recognition and Measurement – AS30 - IAS39

o Financial Instruments: Presentation AS-31 – IAS32

o Financial Instruments: Disclosures AS-32 – IFRS -7

Module 6. Other Accounting Standards

o Accounting for the effects of changes in foreign exchange rates AS11 –

IAS21

o Accounting for taxes on income AS22 – IAS 12

o Interim Financial Reporting AS25 – IAS34

o New Accounting Standards

Suggested Readings:

• Accounting Standard by Shri D.S. Rawat (Taxman Publication)

• T.P. Ghosh: Indian Accounting Standards and IFRSs, Taxman

• Compendium of the Accounting Standard - ICAI

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COMPUTER APPLICATION IN FINANCE


OBJECTIVES

Whether one works for a Fortune 500 Corporation, a small company, a government

agency, or a non-profit organization, if (s)he reads this paper the chances are that (s)he

uses Microsoft Excel in his daily work. Their job probably involves summarizing,

reporting, and analysing data; it might also involve building analytical models to help

their employer in increasing profits, reducing cost or just managing operations more

efficiently. This paper is meant to develop the skills of computer applications in the

Finance.

CONTENTS

Module 1: Microsoft Excel Using VBA

• Introduction to VBA

• Elements of VBA language and syntax

• Designing a good program

• Entering data and formulas to the worksheet under VBA

• Range validation

• Working with worksheet contents

• Selecting ranges and formatting cells using VBA

• Assigning values to cells and ranges using VBA

• Concatenating strings

• Using external functions through add-ins like Solver, Financial Analysis

ToolPak, etc

• Embedded macro buttons

• Testing and debugging VBA code

Module 2: Financial Econometrics Using MS Excel

• The Simple Linear Regression Model

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• Interval Estimation and Hypothesis Testing

• Prediction, Goodness-of-Fit and Modeling Issues

• The Multiple Linear Regression

• Heteroskedasticity

• Dynamic Models, Autocorrelation, and Forecasting

• Random Regressors and Moment-Based Estimation

• Nonstationary Time-Series Data and Cointegration

• VEC and VAR Models: An Introduction to Macroeconometrics

• Time-Varying Volatility and ARCH Models: An Introduction to Financial

Econometrics

Module 3: Financial Model Using MS Excel

• The Black Scholes Formula in the spreadsheet

• Introduction to Monte Carlo Simulations

• Calculating Greeks in Monte Carlo Simulations

• CAPM using spreadsheet

• Multi-period model using speadsheet

Suggested Readings:

• Vijay Gupta, 2002, Financial Analysis Using Excel, Vol. 6, VJ Books Inc. Canada

• Curtis D. Frye, 2007, Step By Step MS Office Excel, PHI Pvt. Ltd

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CORPORATE AND CAPITAL MARKET LAWS


OBJECTIVES

This course is designed to help the students in understanding the legal environment in

which the financial market operates.

CONTENTS

Module1. Companies Act, 1956, SCRA, 1956 and and Depositories Act, 1996

• Companies Act 1956 - Incorporation of a Company, Prospectus, Allotment

and Issue of Shares, Share Capital and Debentures, Management and

Administration, Winding up.

• Securities Contract Act, 1956 – Definitions, Listing of Securities, Penalties

and Procedures. Depositories Act, 1996 – Definitions, Rights of

Obligations of Depositories, Participants, Issuers and Beneficial owners,

Enquiry and Inspection, Penalty.

Module2. SEBI Regulations Act, 1952, Circulars, Rules, Regulations and Bye-

laws

• Definitions, registration of stock brokers and sub brokers, registration of

trading and clearing members, general obligations and responsibilities,

inspection and procedure for action in case of default.

• Circulars, rules, regulations and bye-laws - NSE, NSCCL, SEBI and MoF

circulars as enforced from time to time, NSE rules, regulations and bye-

laws, NSCCL rules, regulations and bye-laws.

Module3. SEBI Rules and Regulations

• SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to

Securities Market) Regulations, 2003.

• SEBI (Prohibition of Insider Trading) Regulations, 1992, SEBI (Portfolio

Managers) Regulations, 1993,

• SEBI (Underwriters) Regulations, 1993.

Module4. SEBI Rules and Regulations

• SEBI (Ombudsman) Regulations, 2003, Compliance with the provision of

listing agreement, Compliance with book building guidelines for raising

funds through public issue, Compliance with SEBI(DIP) guidelines for

raising funds through public issue

Suggested Readings:

• Corporate & Capital Markets Laws Module, Workbook from NSE

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COMMODITIES MARKET OPERATIONS


OBJECTIVES

This course is designed to help the students in understanding of commodities market,

products, financial derivatives, pricing mechanism etc. They will be able to understand

the trading, clearing and settlement operations using NCDEX platform. Students will also

learn regulatory framework and taxation aspects.

CONTENTS

Module 1: Introduction to Commodity Derivatives

• Introduction to derivatives, products, participants and functions, derivatives

markets,

• Difference between commodity and financial derivatives.

• Evolution of commodity exchanges,

• Global commodity derivatives exchanges, latest developments.

• The NCDEX platform – structure, exchange membership,

• risk management,

• Clearing and settlement system and commodities traded on the NCDEX platform.

Module 2: Application of Commodity Futures

• Instruments available for trading - forward contracts,

• introduction to futures and options,

• payoff for F&O,

• Using futures versus options.

• Pricing commodity futures - investment assets versus consumption assets, the

cost of carry model, the futures basis.

• Using commodity futures for hedging, speculation and arbitrage.

Module 3: Trading, Clearing and Settlement

• Trading - futures trading system,

• entities in the trading system,

• commodity futures trading cycle, order types and trading, parameters,

• Margins for trading in futures, charges, hedge limits.

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• Clearing and settlement - clearing, settlement, risk management,

• Margining at NCDEX and Standard Portfolio Analysis of Risk (SPAN).

Module 4: Regulatory Framework of Commodity Derivatives

• Rules governing commodity derivatives exchanges, participants,

• Investor grievances and arbitration.

• Implications of Sales Tax, Value Added Tax (VAT) and obligations.

• Electronic Spot Exchange - NCDEX Spot Exchange Ltd. (NSPOT).


Students will develop financial market skills such as trading, investment, portfolio

management etc. through practice on NSE Learn to Trade (NLT), an internet based

market simulation software.

P.S.: Students must read daily news papers like The Economic Times, Financial Express

etc., watch business channels e.g. CNBC, NDTV Profit, ET Now etc. and get updates from

websites of SEBI, NSE etc.

Suggested Readings:

• Commodities Market Module, Workbook from NSE

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DERIVATIVE MARKET OPERATIONS


OBJECTIVES

This course is designed to help the students in understanding the basics of the

derivatives market products in speculating, hedging and arbitraging. Students will also

learn the process involved in trading, clearing, settlement and risk management of

equity derivatives in addition to the regulatory, accounting and taxation issues.

CONTENTS

Module 1: Introduction to Derivatives

• Derivatives - types, history, participants and economic functions.

• Understanding interest rates and stock indices - Indices construction, economic

significance, application etc.

• Futures contracts, mechanism and pricing - forward contracts, introduction to

futures, terminologies, pricing etc.

Module 2: Pricing, Applications of Futures and Options

• Understanding Beta,

• Numerical illustration of applications of stock futures.

• Options contracts,

• mechanism and applications - option terminology,

• comparison between futures and options,

• options payoffs,

• Application of options.

• Pricing of options contracts and Greek letters - variables affecting option pricing,

The Black Scholes Merton model for option pricing (BSO), the Greeks.

Module 3: Trading, Clearing and Settlement

• Futures and options trading system,

• the trader workstation,

• futures and options market instruments,

• Criteria for stocks and index eligibility for trading, charges.

• Clearing and settlement - clearing entities, clearing mechanism, settlement

procedure, risk management and margining system.

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Module 4: Regulatory Framework and Accounting

• Securities Contracts (Regulation) Act, 1956,

• Securities and Exchange Board of India Act, 1992,

• Regulation for derivatives trading,

• Adjustments for corporate actions.

• Accounting for futures,

• accounting for options,

• Taxation of derivative transaction in securities.








Suggested Readings:

• Derivative Market (Dealers) Module, Workbook from NSE

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Financial Econometrics


Objective:

The course covers topics in time series analysis with an emphasis on applications rather

than econometric theory. The aim of the course is to equip students with a working

knowledge of important econometric techniques used in macroeconomics, international

finance, and financial economics.

CONTENTS

Module I Single-Equation Regression Models

• The Nature of Regression Analysis

• Two-Variable Regression Analysis: Some Basic Ideas

• Two-Variable Regression Model: The Problem of Estimation

Module II Multiple Linear Regression Models

• Two-Variable Regression: Estimation and Hypothesis Testing

• Multiple Regression Analysis: The Problem of Estimation

• Multiple Regression Analysis: The Problem of Inference

Module III Relaxing the Assumptions of the Classical Model

• Multicollinearity

• Heteroscedasticity

• Autocorrelation

Module III Time Series Econometrics

• Nonstationary Time-Series Data and Co integration

• VEC and VAR Models

• Time-Varying Volatility and ARCH Models

Core Reading:

Gujarati, Damodar N. and Dawn C. Porter, Basic econometrics (Latest Edition), McGraw-

Hill/Irwin.

Reference Reading:

Brooks, C. (2008), Introductory Econometrics for Finance. 2nd

ed., Cambridge:

Cambridge University Press.

Campbell, J.Y., A.W. Lo and A.C. MacKinlay (1997), The Econometrics of Financial

Markets, Princeton, NJ: Princeton University Press.

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Christoffersen, P.F. (2003), Elements of Financial Risk Management. Amsterdam:

Academic Press.

Tsay, R.S. (2005), Analysis of Financial Time Series. 2nd

ed., New York: Wiley.

Wang, P. (2007), Financial Econometrics, London: Routledge.

Enders, W. (1995), Applied Econometric Time Series, New York: Wiley. Hamilton,

J.D. (1994), Time Series Analysis, Princeton, NJ: Princeton University Press.

Maddala, G.S., and I.-M. Kim (1998), Unit Roots, Cointegration, and Structural

Change, Cambridge, U.K.: Cambridge University Press.

Diebold, F.X. (2006), Elements of Forecasting, Cincinnati, 4th

ed., South-Western

College Publishing.

Mark, N.C. (2001), International Macroeconomics and Finance, Blackwell

Publishers.

Sarno, L., and M.P. Taylor (2002), The Economics of Exchange Rates, Cambridge

University Press.

Judge, G. G., R.C. Hill, W.E. Griffiths, H. Lutkepohl, and T.-C. Lee (1988),

Introduction to the Theory and Practice of Econometrics, 2nd

ed., New York:

Wiley.

Kennedy, P. (2008), A Guide to Econometrics, 6th

ed., Blackwell Publishers.

Stock, J.H., and M.W. Watson (2003), Introduction to Econometrics,

Boston, MA: Addison- Wesley.

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BANK MANAGEMENT


OBJECTIVES

Banking Sector is not only the integral part of any financial system; rather it acts on the

back bone of the system. Studying this paper will make the participants well versed with

Banking System in India, its regulation, operation exposure and risk management

techniques.

CONTENTS

Module1: An Overview of Banks and NBFCs.

• Indian Banking System, Role of RBI

• Regulatory system for Banks and NBFCs {{{{

Module 2: Banking Sector Reforms,

• Banks Balance Sheet

• Liabilities Management

• Cost of funds and Transfer Pricing

• Negotiable Instrument s Act, Banking Regulation Act

Module 3: Loan Policy of Banks, Exposure Norms

• Credit Appraisal, Assessment of Credit requirements 0 Project Finance,

• Credit Rating, Pricing of Loans, PLR

• Credit Delivery

• Non Fund Business LIC, Guarantee,

• Credit Supervision and Monitoring

• Leasing and Hire Purchase

• Case Study

Module 4: Prudential Norms on Income Recognition and Asset

• Classification

• Restructuring of Loans,

• Industrial Rehabilitation,

• Management of NPAs,

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• Recovery Management in Banks,

• Legal and Non Legal Measures.

• DRT Act 1993, SARFAESI Act 2002.

• Exercises and Problems

Module 5: Investment Management in Banks, SLR l Non SLR, securities

• Dealing Room Operations,

• Integrated Treasury Operations 0 Asset Liability Management 0 Case Study on

ALM

Module 6: International Banking,

• Foreign Exchange and Euro Markets, 0 Bourse Programme in Forex,

• Trade Finance

• Derivatives,

• Foreign Currency Funding Options

Module 7: NBFCs - Types,

• RBI guidelines for NBFCs,

• Role of NBFCs in financing projects

Suggested Readings:

• Rose, Peter S, Commercial Bank Management

• Heffernan, Shelagh : Modem Banking

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FOREIGN EXCHANGE MANAGEMENT & CURRENCY MARKETS


OBJECTIVES

This course is designed to help the students in understanding the basic concepts of

Foreign Exchange market & currency derivatives, products and their applications as a

risk management tool.

CONTENTS

Module 1: Foreign Exchange Management

• Forex Market-Wholesale and Domestic;

• Quotations- Direct, Indirect and Cross Currency;

• Various Kinds of Transactions and their settlement dates;

• Forward Rates;

• Swaps;

• Quotes for various kinds of Merchant Transactions;

• Early Delivery;

• Extension or Cancellation of Forward Contracts.

Module 2: Exchange Rate Determination and Forecasting

• Purchasing power parity and interest rate parity;

• Relationship between PPP and IPP;

• Reasons for Deviation from PPP and IPP;

• Models of Exchange rate forecasting;

• The Demand and Supply Approach;

• The Monetary Approach;

• The Portfolio balance Approach.

Module 3: Foreign Exchange Exposure

• Financial Accounting and Foreign Exchange-Currency Translation Methods;

• AS-8 and FAS 52;

• Transaction exposure;

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• Managing Transaction and Translation Exposure;

• Designing a Hedging Strategy;

• Measuring & Managing Economic Exposure.

Module 4: Basics of Equity Derivatives

• Introduction;

• Definitions of basic derivatives;

• Put options & call options applications of derivatives and derivatives as a risk

management tool.

Module 5: Trading Futures and Options on Stock Exchanges

• Trading Futures - Pay-off of futures;

• Theoretical models for future pricing.

• Trading Options – option payouts;

• Option strategies;

• Determination of option prices and factors affecting option prices.

• Derivatives trading on NSE – using daily newspapers to track F&O;

• Settlement of F&O;

• Accounting and taxation.

Module 6: Introduction to Currency Markets

• Introduction to currency markets;

• Exchange rates;

• factors affecting currency futures;

• Strategies using currency futures;

• Hedging, speculation, arbitrage.

• NSE's currency derivatives segment.

Module 7: Trading, Clearing, Settlement and Risk Management in Currency

Futures

• NSE membership – categories;

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• Eligibility and criteria;

• Future contract specifications;

• Trading system, placing orders, client broker relationship.

• Clearing, settlement and risk management system through margins of different

kinds;

• Clearing entities and settlement mechanism.

Market Simulation Lab

Market simulation lab sessions using technical analysis software such as Metastock

for timing the currency futures trading decisions.

P.S.: Students must read daily news papers like The Economic Times, Financial

Express etc., watch business channels e.g. CNBC, NDTV Profit, ET Now etc. and get

updates from websites of SEBI, NSE etc.

Suggested Readings:

• International Finance, PG Apte

• Multinational Financial Management, Alan C. Shapiro

• Currency Derivatives: A Beginner’s Module, Workbook from NSE

35

FINANCIAL VALUATION AND MODELLING


OBJECTIVES

This course is designed to help the students learn the application of MS-Excel in the

financial modelling.

CONTENTS

Module 1: Excel as a tool in Financial Modelling

• Excel concepts - Basic commands.

• Functions - math’s, logical, look up, date, text and financial.

• Chart, diagram, picture, background, auto format, conditional formatting,

style, filter, sort.

• Formulas and macros.

• What if analysis, pivot table, pivot chart, scenario, goal seek, problem solver

tool, advanced filter.

Module 2: Financial Modelling Basic Concepts

• Introduction,

• Advanced functions of MS-Excel as a tool in financial modelling.

• Components of a financial model, building the template,

• filling in the historical data,

• identifying assumptions and drivers,

• forecasting various schedules and financial statement,

• building the supporting schedules,

• various approaches to valuation,

• key ratios, financial ratios and company analysis,

• Building cases and sensitivity analysis: - looking at the probabilistic analysis of

the best and worst case scenario.

Module 3: Cash Ratios and Non Cash Valuations

• Cash Ratio - Structured model with a menu & accounting statements,

• Calculating key financial ratios,

• Deriving an international cash flow.

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• Non Cash Flow Valuations - Accounting methods,

• Dividend discount models,

• Market-based methods – EPS and multiples,

• Fundamentals EV/EBITDA, EV/Sales, etc, Peer groups.

Module 4: Forecasting Methods and Initial Valuations

• Review of forecasting methods,

• relationship between company and financial strategy,

• identifying and forecasting key drivers,

• linkages and modelling problems,

• Deriving free cash flow.

• Cost of capital and initial valuation

• alternative theories – bonds and arbitrage pricing theory, capital asset pricing

model constituents,

• asset and equity betas,

• mathematical derivation,

• methods of adding terminal value,

• producing an equity valuation,

• comparison to existing share price,




Note: The curriculum is under revision by NSE due to constant changes in financial

market and will be provided before the corresponding semester starts.

Suggested Readings:

• Financial Valuation and Modeling, Workbook from NSE

37

TECHNICAL ANALYSIS


OBJECTIVES

This course is designed to help the students to develop the practical skills for utilizing

tools and techniques of technical analysis for timing the investment and trading

decisions in stock, commodity and currency market.

CONTENTS

Module 1: Introduction to Technical Analysis

Technical analysis, basic assumptions, strengths and weakness. Dow theory, the

charts, candlestick charts analysis with one two and three candles like hammer,

hanging man, shooting star, bearish and bullish harami etc. Pattern Study -

Support and resistance, head and shoulders, double top and double bottom and

Gap theory.

Module 2: Major Indicators and Oscillators

Stochastics, RSI, Williams %R, MFI, Bollinger bands, Moving Averages, MACD,

Other Investments

Module 3: Major Theories in TA

Dow Theory and Eliot Wave Theory

Module 4: Risk Management, Trading Phycology and Trading Strategies

Risk Management – Need, techniques, uses of stop loss, qualities of successful

traders, golden rules of traders, do's and don'ts in trading, rules to stop losing

money, choosing the right market to trade, importance of discipline in trading.

Day trading, advantages of day trading, risks associated with trading, strategies

for day trading, momentum trading strategies.

38






Express etc., watch business channels e.g. CNBC, NDTV Profit, ET Now etc. and

get updates from websites of SEBI, NSE etc.

Suggested Readings:

• Technical Analysis, Workbook from NSE

EQUITY RESEARCH


OBJECTIVES

39

This course is designed to give the students a practical orientation towards the

principles of investment, pricing, valuation and portfolio management.

CONTENTS

Module 1: Introduction to Equity Research, and Economic Analysis

• Equity Research an Introduction – Overview,

• Market participants,

• Types of research,

• Role of an analyst,

• Stocks and industry classification.

• Time value of money, future and present value,

• Risk and return, types of risks, measurement,

• Beta, risk return trade off,

• Quantitative and qualitative aspects,

• Concept of intrinsic value.

• Economic analysis - economic indicators, gross domestic product, inflation,

interest rates, credit policies, foreign direct investment, FIIs etc.

Module 2: Industry and Company Analysis

• Industry analysis, life cycle of an industry,

• SWOT analysis,

• Characteristics of industry analysis,

• Michael Porters five forces model.

• Company analysis - non financial aspect,

• The management - general analysis of company, SWOT analysis, quality-price

matrix.

• Company analysis – financial, analysis of financial statements.

• Ratio analysis – Activity, Solvency and Valuation Ratios and leverage analysis.

Module 3: Valuation of Stocks and Firms

• Valuation concepts,

• Time value of shares,

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• Share models, discount rate,

• Multiplier approach to share valuation, regression analysis, preferred stock.

• Valuation of firms,

• Weighted average cost, cost of debt, cost of preferred stock, cost of equity,

CAPM approach,

• Discounted cash flow approach,

• Discounted cash flow corporate valuation model,

• Relative corporate valuation model,

• Advantages and disadvantages of relative valuation.

Module 4: Report Writing and Presentation

• Equity Research Report Writing – Information memorandum,

• Format structure and content,

• Source of information and its validity,

• Desk research,

• Independent appraisal of management information,

• Expert / legal opinion








Suggested Readings:

• Equity Research Module, Workbook from NSE

BEHAVIOURAL FINANCE


41

OBJECTIVES

Behavioural finance, studies the effects of social, cognitive, and emotional factors on the

economic decisions of individuals and institutions and the consequences for market

prices, returns, and the resource allocation. The fields are primarily concerned with the

bounds of rationality of economic agents. Behavioural models typically integrate insights

from psychology with neo-classical economic theory; in so doing, these behavioural

models cover a range of concepts, methods, and fields.

CONTENTS

INTRODUCTION

• Finance Theory as an Engine not a Camera, Rebuilding on New Foundations,

Challenging the Classical Assumptions of Finance, Modeling Behavioral Aspects

of Finance.

Module 1: FOUNDATIONS

• Financial Decision Making.

o The Expected Utility Rule, Expected Utility Theory: Simple But

Untrue?, Frames for Actions, Contingencies and Outcomes.

• Discounting.

o The Discounted Utility Model, How and Why Discount Rates

Vary, How Investment Decisions are Made When Discount

Factors Decline over Time.

• Learning.

o Rational Learning, Over Inference and the Law of Small

Numbers, Disagreement, & Tastes.

• Bubbles.

o Bubbles: Past, Present and Future, The 1929 Stock–Market

Crash, Should Government Burst the Bubble?

Module 2: ASSET PRICING

• Noise Traders

o Can Investors Get Emotional?

• Overconfidence and Optimism

o Do Investors Trade Too Much?

• Asset Pricing under Prospect Theory

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o The Basics of Prospect Theory, Does Prospect Theory Work?,

The Cumulative Probability Version of Prospect Theory, Does

Cumulative Prospect Theory Work?

• Overreaction and/or under reaction.

• Momentum.

• Herding.

• Insider Trading.

o Insider Trading Here for Better or Worse, Insider Trading,

Stock Options and the Construction of Earnings, Insider

Trading and its Consequence for Outsiders.

• Equity Premium Puzzle.

o The Puzzle, Loss Aversion in a Reference–Dependent Utility

Model.

Module 3: CORPORATE FINANCE

• Incorporation.

o Companies: Where did They Come from and Where will They

Go?, Agency, Monitoring and Incorporation.

• The Market for Information, Noise and Deception.

o The Boundaries of the Market for Corporate Information,

What Do Analysts Do?, Valuing Investment Advice.

• Dividends.

o The Irrelevance of Dividends to Value, A Prospect Theory

Explanation of Dividend Payments, Who Pays Dividends and

Why?

• Entrepreneurship.

Module 4: THE PROFESSIONS

Analysts’ Conflicts of Interest.

• Accounting Reform.

Suggested Readings:

• Behavioural Finance (2009), William Forbes, John Wiley & Sons

• Value Investing And Behavioral Finance 1st Edition, Parag Parikh, Tata McGraw-

Hill Education (2009)

43

WEALTH MANAGEMENT


OBJECTIVES

44

This course is designed to help the students in managing the wealth of clients through

investments in equity, debt and alternative products, keeping in mind the risk profile

and taxation aspects while allocating assets.

CONTENTS

Module 1: Introduction to Wealth Management

Financial planning to wealth management, wealth cycle, risk profiling and asset

allocation, contract and documentation, client data collection, client data

analysis, life cycle, systematic approach to investing, financial plan, financial

blood-test report (FBR), financial planning in India. Economic cycles and

indicaters, interest rate views, currency exchange rate, the deficits.

Module 2: Investment and Risk Management using Equity & Debt

Role of equity, active and passive exposures, returns from passive exposure to

S&P CNX Nifty, sector exposure and diversification, fundamental and technical

analysis, fundamental valuation approaches, investment and speculation,

leveraging. Role of debt, deposits and debt securities, valuation of debt

securities, yields and interest rate risk, interest rate and debt investments, credit

exposure and debt investments, concentration risk, passive investments in debt

Module 3: Investment and Risk Management with alternate assets

Gold - Role of gold, gold investment routes, rupee returns from gold. Risk

assessment, life insurance, health insurance, general insurance, safeguards in

insurance. Derivatives–futures & options, mutual fund, venture capital / private

equity funds, hedge funds, structured products, portfolio management services

(PMS). Role of real estate, real estate investment routes and real estate indices.

Estate planning assets & liabilities, nomination, inheritance law, will, trust.

Module 4: Risk profiling, asset allocation and evaluation of investment

Risk profiling, why asset allocation?, strategic asset allocation, tactical asset

allocation, fixed asset allocation, flexible asset allocation, asset allocation returns

in equity and debt asset allocation returns in equity, debt and gold, allocation to

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speculation, diversification in perspective. Risk-return framework, risk, risk

adjusted returns, selectively-invest classification scheme for investment products

Module 5: Taxation of Investment Products

Previous year and assessment year, gross total income, income tax slabs,

advance tax, tax deducted at source (TDS), exempted income, deductions from

income, long term and short term capital gain / loss, speculation profit / loss,

capital gains tax exemption, under section 54EC, capital gains tax exemption

under section 54F, setting off & carry forward. dividend tax / tax on income

distributed by mutual fund, securities transaction tax (STT), capital gains

taxation, taxation of fixed deposits and fixed maturity plans, dividend and

growth options in mutual fund schemes, wealth tax.

Suggested Readings:

• Wealth Management Module, Workbook from NSE

46

INVESTMENT BANKING


OBJECTIVES

This course is designed to help the students in understanding the role and

responsibilities of an Investment Banker, products, services for the individual as well as

corporate while managing the risks.

CONTENTS

Module 1: Financial Markets Overview

• Structure of financial market

• Types of markets

• Types of financial instruments & their importance

• Role of Investment Banks

Module 2: Analyzing Financial Statement for I-Banking

• Concept of the three financial Statements

• Understanding the line items of financial statements

• Understanding the relationship between financial statements

Module 3: Financial Statement Analysis

• Common sizing of financial statements

• Ratio analysis

• Time series analysis

• Cross sectional analysis

Module 4: Financial Modelling

• Introduction to financial modelling

• Preparing for modelling

• Building an earning projection model

• Review exercise

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Module 5: Relative Valuation Analysis

• Introduction to valuation

• Why do we value companies?

• Difference between book value and market value

• Valuation methodologies: relative & fundamental valuation

Module 6: Trading Comparable

• Choosing appropriate peer group

• Calculating equity value and enterprise value (EV)

• Calculating fully diluted shares outstanding (options &

convertibles)

• Adjusting the EV

• Normalizing Income statement

• Calculating last twelve months (LTM)

Module 7: Case Study on Trading Comps

• Practice on full trading comps

• Interpretation and analysis of trading multiples

Module8: Transaction Comparable

• Choosing appropriate peer group

• Discuss strategic rationale

• Different kind of deal considerations

• Control premiums, synergies

• Calculating equity value and EV

Module 9: Case Study on Transactions Comps

• Practice on full transaction comps

• Interpretation and analysis of transactions multiples

Module 10: Absolute Valuation Analysis

• Introduction to Discounted cash flow

• Dividend Discount Model

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• Free cash to Firm (FCFF) & Free Cash Flow to Equity (FCFE)

• Discount Rate (Cost of Debt, Cost of Equity & Cost of Capital)

• Forecasting

• Revenue drivers

• Cost drivers

• Practice complete DCF model

Pitch book building process

• Introduction to Pitchbooks

• Building Company Profiles

• Building case studies

• Building industry thematic

P.S.: Students must read daily news papers like The Economic Times,

Financial Express etc., watch business channels e.g. CNBC, NDTV Profit, ET

Now etc. and get updates from websites of SEBI, NSE etc.

Note: The curriculum is under revision by NSE due to constant changes in

financial market and will be provided before the corresponding semester

starts.

Suggested Readings:

• Investment Banking, Workbook from NSE

49

VENTURE CAPITAL AND PRIVATE EQUITY

Course Code: PGEP (FM) 404

OBJECTIVES:

This course is designed to help the students in understanding the role of private equity

for early stage in financing, structure and format of operation together with post-

investment support that can come with private equity capital.

CONTENTS:

Module 1: Private Equity Background

Evolution of Finance for Business, VC Funds and PE Funds, Fund Structure,

Leveraging in Funds, Forms of Investment by Funds, J Curve and Measuring the

Performance of Investments and PE Fund. PE Investment Criteria, Role of

Facilitators, Resource Mobilisation, Valuation & Dilution

Module 2: Business & Financial Model

Background, Assumptions, Cost of Project & Means of Financing, Projected

Profit & Loss Account , Projected Balance Sheet, Projec4rrdccxted Funds Flow,

Project IRR, Equity IRR, Loan Servicing Capability, Valuation, Sensitivity Analysis

and Building Scenarios. Buyouts and other Transactions - LBO, MBO, Project-

based Funding Transactions and Distressed Assets Funding Transactions.

Module 3: PE Investment Process

Sourcing of Proposals, Initial contact / Flier, Non-Disclosure Agreement (NDA),

Information Memorandum, Management Presentation, Initial Due Diligence,

Preliminary Investment Note, Non-binding Letter of Intent, Final Due Diligence,

Final Investment Memorandum, Signing the Term Sheet and Closure of the Deal.

Documentation and Typical Investment Conditions - Typical Investment

Conditions, Subscription Agreement and Shareholders’ Agreement.

Module 4: Tax Aspects of PE Investment

Section 10(23FB) of Income Tax Act, 1961, Section 10(47) of Income Tax Act,

1961, Income Types, Securities Transaction Tax (STT), Tax on Distributed Profit

(Dividend Distribution Tax), Taxability of Interest, Taxability of Short Term Capital

Gains on Debt, Taxability of Long Term Capital Gains on Debt, Taxability of Short

Term Capital Gains on Equity, Taxability of Long Term Capital Gains on Equity and

Taxation of Non-Residents. Post-Investment Support, Monitoring and Exit -

Support, Monitoring and Exit.

50

Module 5: Regulation of PE Funds

SEBI (Alternate Investment Funds) Regulations, 2012, Categories of AIFs,

Eligibility Criteria, Conditions & Restrictions for Investment in Fund, Tenure,

Listing, Conditions & Restrictions for Investment by Fund, General Obligations,

Maintenance of Records and Winding up of AIF.

Module 6: EMERGE: NSE’s Platform for SMEs - Emerge Introduction, Benefits of

Listing for Companies, Benefits of Listing for Investors, Eligibility Criteria, Listing

Requirements, Listing Fees, Selecting a Merchant, Banker for the Issue, Role of

Merchant Bankers in Emerge, Role of Market Makers in Emerge and The Emerge

Trading Platform.


Express etc., watch business channels e.g. CNBC, NDTV Profit, ET Now etc. and

get updates from websites of SEBI, NSE etc.

Suggested Readings:

Venture Capital and Private Equity Module, Workbook from NSE

51

MUTUAL FUNDS & FIXED INCOME SECURITIES


OBJECTIVES

This course is designed to help the students in understanding the basic and advance

concepts of mutual funds. In addition it will help them in understanding the

fundamental features of debt instruments, trading on the NSE-WDM Segment,

regulatory & procedural aspects and concepts in valuation of bonds.

CONTENTS

Module 1: Mutual Fund Products and Features

Mutual Funds, benefits, risks of investing, NAV, entry/exit load, types, fund offer

document. Different type of mutual fund products, features, exchange traded

funds (ETF) and gold ETFs. investments by mutual fund schemes, valuation of

investments by mutual fund schemes, mutual fund accounting, novel portfolio

structures in mutual fund schemes, quantitative evaluation of mutual fund

schemes, cut-off time regularations & time stamping, investment in mutual

funds through NSE, non-residential investment in Indian MF schemes,

investment by Indians in international MF schemes, SID, SAI, KIM & fact sheets

Module 2: Debt Market and Trading in Wholesale Debt Market (WDM)

Debt instruments: fundamental features, Indian debt markets: a profile, central

government securities: bonds, central government securities: t-bills, state

government bonds, bond market indices and benchmarks. Call money markets,

corporate debt: bonds, commercial paper & certificate of deposits, repos,

trading mechanism in the NSE-WDM.

Module 3: Valuation of Bonds

Valuation of bonds, yield curve and term structure of interest rates –

bootstrapping, alternative methodologies to estimate the yield curve, NSE ZCYC

52

(Nelson Seigel Model), duration, fixed income derivatives – interest rate futures,

swaps and guidelines.

Module 4: Regulatory framework and taxation of Mutual Funds and Debt

Regulations governing equity market and mutual funds. Introduction to

techniques of analysis in stock market and mutual funds like ratio analysis. An

introduction to income tax, capital gains having direct relevance for investment /

trading in stock market and mutual funds. G-Sec Act 2006; SEBI (Issue and Listing

of Debt Securities) Regulations 2008 and Market Practices and Procedures.

Suggested Readings:

• Mutual Funds: A Beginners’ Module, Workbook from NSE

• Mutual Funds (Advanced) Module, Workbook from NSE

• FIMMDA-NSE Debt Market (Basic) Module, Workbook from NSE

53

PROJECT REPORT


The participants are required to submit a project report which will be evaluated to enable

them to earn a required credit.

Course Manual-2014-15-PGEP

Documents

financial markets pgepfm

financial planning pgepfm

financial econometrics

mangers pgepfm

modelling pgepfm

capital market laws

financial intermediation

financial valuation