Semester : SEMESTER 6
Subject : Financial Economics
Year : 2022
Term : March
Branch : ECONOMICS
Scheme : 2020 Full Time
Course Code : ECO 6B 11
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2 C 20738
Differentiate between forward contracts and future contracts.
Explain the top-down approach of investment valuation.
Explain the trade-off between risk and return.
Explain various methods for valuation of securities.
Explain binomial option pricing model. Point out major advantage of a binomial option pricing
model.
(5 x 6 = 30 marks)
Section C (Long Essay Questions)
Answer any two questions.
Each question carries 10 marks.
Define investment criteria. Explain various criteria of investment.
Critically analyze Modigliani-miller hypothesis.
What do you mean by financial derivatives ? Discuss various types of financial derivatives.
Explain the capital asset pricing model. Discuss the uses of the CAPM model in investment analysis.
(2 x 10 = 20 marks)
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