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Capital Market and
Portfolio Management
Dec 2025 Examination
Q1. Reeva Capital, a
newly launched Indian fintech-driven brokerage firm, is planning to expand its
services by catering to both retail and institutional investors. Their CTO
wants to ensure smooth trade execution through the selection of appropriate
trading platforms, order types, and mechanisms. As the Chief Market Strategist,
you are tasked with drafting a strategy that outlines the application of market
structure concepts to enhance trade efficiency and market access.
Based on this scenario,
answer the following:
Question:
1. Discuss the role of
different types of trading orders (Market, Limit, Stop- loss) that Reeva
Capital should support for clients, with examples of when each would be
practically used. (3 Marks)
2. Evaluate whether
Reeva Capital should act as a broker, dealer, or market maker in the Indian
context. Justify with functions and regulatory implications. (3 Marks)
3. How should Reeva
Capital handle liquidity concerns, especially when catering to institutional
investors? Explain using the concept of market depth and Indian trading
platforms. (4 Marks)
(10 Marks)
Q2(A). Astra Capital, a
registered stockbroking firm in India, recently onboarded a new institutional
client from Singapore. During the client onboarding process, Astra's compliance
officer notices that the client is indirectly linked to a promoter group of a
listed Indian company. Meanwhile, one of Astra’s analysts accidentally shares a
draft research report about that company before it is officially published.
As the Compliance Head
of Astra Capital, you are required to evaluate the regulatory and ethical risks
involved and suggest a compliant course of action under Indian capital market
regulations.
Question:
Identify and explain
two key regulatory and ethical concerns in this scenario. How should
Astra Capital address
these concerns in accordance with Indian regulatory
frameworks and ethical investment practices? (5 Marks)
Q2(B). Ritika, a young
fund manager at a boutique investment firm in Mumbai, is designing a new mutual
fund scheme for moderately risk-tolerant investors. She selects 6 Indian stocks
from various sectors (banking, IT, FMCG, pharma, infra, and renewable energy).
Her objective is to maximize returns while reducing overall risk through
diversification.
However, a senior
analyst questions whether the selected portfolio truly follows Modern Portfolio
Theory (MPT), especially in terms of risk-return trade- off and efficient
frontier alignment.
Question:
Based on the above
case, explain how Ritika can apply Modern Portfolio Theory to construct an
efficient portfolio. In your answer, mention:
a) How diversification
reduces risk
b) How expected return
and standard deviation help in evaluating portfolios
c) What role the
efficient frontier plays in this decision-making (5 Marks)
Dear students, get fully
solved assignments by professionals
Do send your query at :
or call us at :
08263069601
(Plagiarism proofed
assignments available with 100% surety and refund)
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