The document discusses key concepts in investment analysis including: 1) The various steps involved in the investment process such as setting objectives, establishing policy, selecting strategies and assets, and measuring performance. 2) Definitions of return, risk, systematic and unsystematic risk, beta which measures sensitivity to market returns, and alpha which measures performance independent of market returns. 3) The meanings of speculation which involves taking business risks for short term gains, and gambling which involves wagering without understanding the risks.

1. SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT
UNIT - I

2. VARIOUS STEPS INVOLVED IN INVESTMENT PROCESS:
 Setting the investment objectives
 Establishing investment policy
 Selecting the portfolio strategy
 Selecting the assets
 Selecting the assets
 Measuring and evaluating performance

4. MUTUAL FUND:
MUTUAL FUND:MUTUAL FUND:
MUTUAL FUND

5. CHOICE AND EVALUATION

6. DEFINE RETURN
Return is a reward for and a motivating force behind in investment, the
objective of which is usually to maximize return.
The return from the stock includes both current income and capital gain
caused by the appreciation of the price. The income flow is the dividend
he receives during the holding period.

7. WHAT IS MEAN BY RISK?
 It refers to the possibility of incurring a loss in a financial transaction.
Risk in holding securities is generally associated with possibility that
realized returns will be less than the returns that the investors were
expected.
 The source of such disappointment is the failure of dividends or the
security materializes is unexpected. It is this uncertainty associated with
the returns from an investment that introduces risk into an investment.

8. TOTAL RISK = SYSTEMATIC RISK + UNSYSTEMATIC RISK

12. WHAT IS MEANT BY BETA?
 Beta is the slope of the characteristic of regression line. Beta describes the
relationship between the stock’s return and the index’s return. Beta is the
sensitivity of an investment's returns as compared to a benchmark. This
benchmark is commonly the NIFTY and SENSEX. A benchmark must be
assigned before beta calculations can be made.

13. WHAT IS MEANT BY ALPHA?
The intercept of the characteristic regression line is Alpha. It indicates
that the stock return is independent of the market return. A positive value
of alpha is a healthy sign.
So usually an investor’s strategy should be to buy securities with positive
alpha as these may be undervalued.

14. WHAT IS MEANT BY SPECULATION?
 Speculation means taking up the business risk in the
hope of getting short term gain. It essentially involves
buying and selling activities with the expectation of
getting profit from the price fluctuations.

15. WHAT IS MEANT BY GAMBLING?
Gambling is the wagering of money or something
of material value on an event with an uncertain
outcome with the primary intent of winning
additional money and/or material goods. It is
unplanned and non scientific, without the
knowledge of the nature of the risk involved.