Investment Management

This book extensively explores the art and science of investment management, offering students the tools to navigate the VUCA (Volatile, Uncertain, Complex, and Ambiguous) financial environment with confidence and competence.

Recognising that investment decisions form the crux of any financial plan, this book adopts a learner-centric approach. Each concept—from foundational theories to advanced valuation techniques—is explained in simple, lucid language to facilitate ease of comprehension. The primary objective is twofold:

• Academic Excellence – Align with the latest university syllabi to ensure a thorough understanding of the investment management course content
• Practical Relevance – Encourage practical application through project work, case studies, and worked examples, bridging the gap between classroom learning and professional practice.

This book is designed to cater to undergraduate Commerce and Management students—particularly those enrolled in B.Com. (Hons.) Paper: DSE 4.2 – Investment Management and B.Com. Paper: DSE 6.2 – Fundamentals of Investment at the University of Delhi.

The Present Publication is the 7th Edition, authored by Prof. (Dr) Vanita Tripathi, Prof. (Dr) Amit Kumar Singh, and Dr Vandana Jain, with the following noteworthy features:

• [Clear Learning Outcomes] Each chapter commences with a set of bullet-point outcomes, offering a quick preview of key takeaways
• [Student-friendly Approach] The language is crisp and accessible, carefully explaining even the most complex concepts through relatable examples and diagrams
• [Contemporary & Updated] Reflects the latest developments in financial markets, incorporating modern-day challenges, global trends, and updated regulations
• [Authorship of Expertise] Written by professors and researchers who have dedicated years to teaching and researching financial markets, ensuring authoritative insight into the subject matter
• [Sequential Paragraph Numbering] Facilitates effortless referencing and cross-linking of ideas within and across chapters
• [Extensive Illustrations & Solved Problems] 260+ solved problems demonstrating step-by-step solutions to strengthen conceptual clarity
• [Chapter Summaries & Exercises] Core concepts are reiterated at the chapter end, followed by multiple-choice and open-ended questions to test comprehension
• [Project Work in Every Chapter] Encourages experiential learning via practical assignments—ranging from stock-market simulations to advanced quantitative analyses
• [Exam-Oriented Material] Tailored specifically to align with the University of Delhi's curriculum, complete with past exam papers and mathematical tables to support students in their exam preparation
• [Practical Learning Emphasis] A special emphasis is placed on hands-on, experiential learning. Readers are guided to:
• Collect and interpret real-time market data
• Perform technical analyses using moving averages and other indicators
• Construct model portfolios
• Estimate intrinsic values of equities
• Experiment with option and futures strategies

The book is divided into five distinct units comprising eleven chapters, each focusing on a key dimension of investment management. A snapshot of the units is provided below:

• Unit I | Introduction to Investment (Chapters 1–3)
• Investment Fundamentals – Differentiate among investment, speculation, and gambling
• Indian Securities Market – Overview of market functioning, primary vs secondary markets, trading of securities, and regulatory framework
• Risk-Return Analysis – Calculation and interpretation of returns under various scenarios, with a dedicated discussion on the influence of taxes and inflation
• Unit II | Bond Analysis and Valuation (Chapter 4)
• Fixed-Income Instruments – Types of bonds, interest rate mechanics, credit ratings, Malkiel's theorems, and practical analysis of the Indian debt market
• Valuation Techniques – Methodologies for pricing bonds, yield estimation, and risk factors pertinent to bond investing
• Unit III | Equity Analysis and Valuation (Chapters 5–8)
• Fundamental Analysis (EIC Framework) – Economic, industry, and company-level analysis to evaluate intrinsic value
• Technical Analysis & EMH – Charting tools, market trends, and the efficient market hypothesis (EMH)
• Equity Valuation – Dividend Discount Model (DDM), Price-Earnings (P/E) model, and an introduction to CAPM-based valuations
• Unit IV | Portfolio Management (Chapter 9)
• Portfolio Creation & Diversification – Step-by-step process of portfolio construction, risk-return considerations, and Markowitz's model
• CAPM & Other Models – In-depth discussion on capital market line (CML), security market line (SML), and portfolio optimisation strategies
• Unit V | Mutual Funds and Derivatives (Chapters 10–11)
• Mutual Funds – Evolution in India, various schemes, performance evaluation, and associated advantages/limitations
• Derivatives – Overview of forwards, futures, options, and real-life applications for hedging and speculation