Sharekhan  project report ,mba
Upcoming SlideShare
Loading in...5
×
 

Sharekhan project report ,mba

on

  • 1,010 views

project training report

project training report

Statistics

Views

Total Views
1,010
Views on SlideShare
1,010
Embed Views
0

Actions

Likes
2
Downloads
110
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft Word

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Sharekhan  project report ,mba Sharekhan project report ,mba Document Transcript

  • A SUMMER INTERNSHIP PROJECT ON INVESTMENT PATTERN ON THE BASIS OF RISK PROFILE OF INVESTORS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE TWO YEAR FULL TIME POST GRADUATE DIPLOMA IN MANAGEMENT PREPARED BY:- UNDER THE GUIDANCE OF :- VIJAY MANNEWAR 1) Dr. SHALINI SINGH Roll Number: - 14002 I.T.S-IM Batch :- 2012-14 2) MR. AMIT SHARMA BRANCH HEAD (SHAREKHAN LTD.) ITS-INSTITUTE OF MANAGEMENT 46, KNOWLEDGE PARK-III, GREATER NOIDA PH.:- 0120-2331073, 2331000, E-mail: itsim@edu.in
  • 2 | P a g e CERTIFICATE:- This is to certify that “Vijay Mannewar” a student of Post graduate diploma in management, Batch (2012-14) of ITS-INSTITUTE OF MANAGEMENT, Roll No. 14002 has undertaken the Summer Internship Project under my guideance for the Project Title “Investment Pattern on the basis of Risk Profile of Investors”. This Project Report is prepared in partial fulfillment for the Post graduate diploma in management. To the best of my knowledge, this research work is original and no part of this report has been submitted by the student earlier to any other institution / university. Date:-…………………… Faculty Mentor’s Name: ………… (Signature)
  • 3 | P a g e ACKNOWLEDGEMENT The satisfaction of the successful completion of any task wouldn‟t be complete without the expression of gratitude to the people who made it possible. I express my gratitude to Mr. Amit Sharma (Branch head) SHAREKHAN LTD, for his support and guidance during the survey. I am very thankful to Dr. Shalini Singh, Faculty, ITS- INSTITUTE OF MANAGEMENT, for the guidance and interest evinced throughout the preparation of this project. I also extend my heartfelt gratitude and thanks to Prof. Shekhar Ghosh, General Director, ITS- INSTITUTE OF MANAGEMENT. I take this opportunity, also to express my love and sincere thanks to my family members and friends for their support and advice during various stage of work. I also extend my gratitude to the respondents of my survey for their kind co-operation. But last not the least I thank God almighty for giving me the support for the completion of the task. View slide
  • 4 | P a g e DECLARATION I Vijay Mannewar Student of ITS- Institute of Management Greater Noida Batch 2012-14 declare that every part of the project report on “Investment Pattern on the basis of Risk profile of Investors (A Research report of Sharekhan ltd) ” that I have submitted is original . The information has been collected from genuine & authentic sources. The project work is done under the supervision of Dr.Shalini Singh. The work has been submitted in the partial fulfillment of the required degree PGDM. Date of Submission of Project: _____________ Place of Submission of Project: _____________ Vijay Mannewar Faculty‟s Comments: View slide
  • 5 | P a g e TABLE OF CONTENT CHAPTERS CONTENTS PAGE NUMBERS 1 Executive summary 6-7 2 Introduction of topic 8-12 3 Introduction of Company 13-33 4 Objectives of the study 34-35 5 Research methodology 36-39 6 Data analysis & interpretation 40-72 7 Findings & conclusions 73-74 8 References 75 9 Appendix 76-77
  • 6 | P a g e
  • 7 | P a g e EXECUTIVE SUMMARY People invest their money for generating good returns. But in this investment some kind of risk is involved. All investors have different attitudes towards risk. When it comes to investing, it is important to consider your risk profile or tolerance carefully, including how comfortable you are with the possibility of losing money, or that returns on your investments. The risk profile of investors depends upon their demographic structures or characteristics. The project deals with the analyzing the investment pattern on the basis of risk profile of investors at Sharekhan Limited and what are the risk factors that influence the type of investment made by individuals . As we all know that every person who wants to gain better returns in future they must have to invest their money in stock market or anywhere else. This study describes the investment pattern use by different persons while doing investment in stock market keeping different risk in mind. The main reason to choose this research is to find out the investment pattern behavior in respect of their risk bearing capacity and this research helps the company to target the investors according to their risk ability. The research process chosen by me is qualitative and quantitative research. Questionnaires in part help me a lot in finding the actual position of the market under the survey method. .A sample size of about 96 respondents which includes individual investors as well as corporate investors was taken for purpose from various parts of Delhi and N.C.R . After the survey was completed, the data was first stored and then analyzed on the chosen parameters. This analyzed data was later on converted into graphs. Such as pie chart, bar graphs, etc this was to make result easily comprehensible by any one going through the report. Later on, all this information was compiled in the form of a presentable and highly comprehensible report. After analyzing the data, the problem which has been identified that most of the investors are ready to bear risk in expectation of higher returns. There is a strong relationship in investment pattern and risk bearing capacity of investors while doing investment. For analyzing the data we
  • 8 | P a g e used chi- square and phi-Cramer V test in SPSS V 19.0 and use MS Excel 2007 for making graphs.
  • 9 | P a g e INVESTMENT PATTERN ON THE BASIS OF RISK PROFILE OF INVESTORS WHAT IS RISK? The word „risk‟ has a definite financial meaning. It refers to possibility of incurring a loss in a financial transaction. In a broad sense, investment is considered to involve limited risk and is confined to those avenues where the principal is safe. „Speculation‟ is considered as an involvement of funds of high risk. TYPES OF RISK 1. SYSTEMATIC RISK 2. UNSYSTEMATIC RISK SYSTEMATIC RISK Systematic risk refers to that portion of the total variability of the return caused by common factor affecting the prices of all securities alike through economic, political and social factors. UNSYSTEMATIC RISK Unsystematic risk refers to that portion of the total variability of the return caused due to unique factors, relating that firm or industry, through such factors as management failure, labour strikes, raw material scarcity etc. WHAT IS INVESTMENT? Investment is the purchase of an asset or item with the hope that it will generate income or appreciate in the future and be sold at the higher price.
  • 10 | P a g e INVESTMENT RISK PROFILE All investors have differing attitudes towards risk. When it comes to investing, it is important to consider your risk profile or tolerance carefully, including how comfortable you are with the possibility of losing money, or that returns on your investments could vary widely from year to year. Understanding your personal risk tolerance will help you choose an appropriate asset allocation - the following points can help you to determine an investment mix that's appropriate for your needs. INVESTMENT EXPERIENCE How would you describe your investment experience and understanding of financial markets? Just started investing in the last year You understand the basics of investing You have been investing on your own for several years and are reasonably confident of your knowledge of financial markets Your knowledge of financial markets is well above average and you make investment decisions confidently RISK TOLERANCE To establish investment strategies that suit your profile of risk and will be comfortable with, you need to consider the possibility that the value of your investment may decline even though this may be temporary. Are you prepared to accept the possibility of a negative return at any time in exchange for potentially higher long term returns? What percentage of your money would you be prepared to invest in higher-risk investments? Which of the following is important to you: Avoiding any short-term losses Receiving regular income from investments Long-term growth in the value of investments Protection against inflation
  • 11 | P a g e In October 1987 the stock market fell more than 20% in one day. If you owned an investment that fell by 20% in a short time what would you do or what did you do in 1987:Sell all of the remaining investment (Conservative) Sell a portion of the remaining investment (Conservative to Balanced) Hold the investment and sell nothing (Balanced or Aggressive) Buy more of the investment (Aggressive) INVESTMENT GOALS AND OBJECTIVES Why are you investing? Is it for something in the near future (new car, or down payment on a home) or something farther off (a young child's education or your own retirement)? If your investing goals are short term you want your money to be there - with interest - when you need it. Therefore you will need to focus on relatively short term investments like term deposits or a cash management trust. If on the other hand, you are investing for the long term, you may be able to afford to take some risk in pursuit of a higher return. Shares, property, and growth orientated managed which historically have provided higher returns than fixed interest or cash over time, may be more appropriate. INVESTMENT TIMEFRAME When do you expect to need to access all or part of your investments: Less than 1 year (immediate access) Less than 2 years (short term) 2 to 5 years (short to mid-term) 6 to 10 Years (mid to long term) Over 10 Years (long term) LIQUIDITY / CASH REQUIREMENTS How much money do you need to keep available for emergencies such as house repairs, a dental emergency or serious car repairs? These emergencies can be a serious setback if you are not prepared. The amount of your emergency fund will depend on your current lifestyle and expenses. As a general rule you should have about 3 months of income set aside to
  • 12 | P a g e meet emergencies without needing to rely on credit cards. A cash management trustthat pays high interest can be a good place to keep emergency funds. Age and Income Your age and your income - particularly the stability of your income - are important factors to consider when determining your investment profile. If you are young you can afford to take a longer term view and any short-term losses may have minimal effect. If your income or employment is unstable you will need to take this in to account when setting your investment goals. Risk Profile Investment Style Conservative Your primary investment goal is capital protection. You require stable growth and/or a high level of income, and access to your investment within 3 years. Cautious Your primary investment goal is capital protection. Investors in this risk profile require fairly stable growth and/or a moderate level of income. Your investment term is 3 years or more. Moderate Your primary investment goal is capital growth. You can tolerate some fluctuations in the value of your investment in the anticipation of a higher return. You don't require an income and you are prepared to invest for 5 years or more. Moderatley aggressive Your primary investment goal is capital growth. Investors in this risk profile can tolerate a fair level of fluctuations in the value of you investment in anticipation of possible higher returns. You don't require an income and you are prepared to invest for 5 to 10 years. Aggressive Your primary investment goal is long-term capital growth. You can tolerate substantial fluctuations in the value of your investment in the short-term in anticipation of the highest possible return over a period of 10 years or more.
  • 13 | P a g e
  • 14 | P a g e SHAREKHAN LIMITED INTRODUCTION Sharekhan is one of the leading retail broking House of SSKI Group which was running successfully since 1922 in the country. It is the retail broking arm of the Mumbai-based SSKI Group, which has over eight decades of experience in the stock broking business. Sharekhan offers its customers a wide range of equity related services including trade execution on BSE, NSE, Derivatives, depository services, online trading, investment advisory, Mutual Fund Advisory etc. The firm‟s online trading and investment site - www.sharekhan.com - was launched on Feb 8, 2000. The site gives access to superior content and transaction facility to retail customers across the country. Known for its jargon-free, investor friendly language and high quality research, the site has a registered base of over two lakh customers. The number of trading members currently stands More than 8 Lacs. While online trading currently accounts for just over 8 per cent of the daily trading in stocks in India, Sharekhan alone accounts for 32 per cent of the volumes traded online. The content-rich and research oriented portal has stood out among its contemporaries because of its steadfast dedication to offering customers best-of-breed technology and superior market information. The objective has been to let customers make informed decisions and to simplify the process of investing in stocks. On April 17, 2002 Sharekhan launched Speed Trade, a net-based executable application that emulates the broker terminals along with host of other information relevant to the Day Traders. This was for the first time that a net-based trading station of this caliber was offered to the traders. In the last six months Speed Trade has become a de facto standard for the Day Trading community over the net.
  • 15 | P a g e On October 01, 2007 Sharekhan again launched his another integrated Software based product Trade Tiger, a net-based executable application that emulates the broker terminals along with host of other information relevant to the Day Traders. It has another quality which differs it from other that it has the combined terminal for EQUITY and COMMODITIES both. Share khan‟s ground network includes over 1005 centers in 410 cities in India, of which 210 are fully-owned branches. Sharekhan has always believed in investing in technology to build its business. The company has used some of the best-known names in the IT industry, like Sun Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign Financial Technologies India Ltd, Spider Software Pvt Ltd. to build its trading engine and content. Previously the Morakiya family holds a majority stake in the company but now a world famous brand CITI GROUP has taken a majority stake in the company. HSBC, Intel & Carlyle are the other investors. With a legacy of more than 80 years in the stock markets, the SSKI group ventured into institutional broking and corporate finance 18 years ago. Presently SSKI is one of the leading players in institutional broking and corporate finance activities. SSKI holds a sizeable portion of the market in each of these segments. SSKI‟s institutional broking arm accounts for 7% of the market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional portfolio investment in the country. It has 60 institutional clients spread over India, Far East, UK and US. Foreign Institutional Investors generate about 65% of the organization‟s revenue, with a daily turnover of over US$ 4 million. The Corporate Finance section has a list of very prestigious clients and has many „firsts‟ to its credit, in terms of the size of deal, sector tapped etc. The group has placed over US$ 1 billion in private equity deals. Some of the clients include BPL Cellular Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shopper‟s Stop.
  • 16 | P a g e Sharekhan business 1. Brokering business. 2. White feathering house production.
  • 17 | P a g e Vision To be the best retail broking brand in the retail business of the stock market. Mission To educate and empower the individual investor to make better investment decisions through quality advices and superior services. Stock exchange Mumbai Share khan is the retail broking arm of SSKI, an organization with more then eight decade of trust and credibility in the stock market. Amongst pioneers of investment research in the Indian market.
  • 18 | P a g e In 1984 venture into institutional broking and the corporate finance. Leading domestic player in the Indian institutional business. Over US$5 billion of private equity deal. SSKI group companies SSKI investor services ltd (Sharekhan) S.S. Kantilal Isharlal securities SSKI corporate finance. SSKI - Corporate Structure 80 years of taming Bulls & Bears
  • 19 | P a g e
  • 20 | P a g e SHAREKHAN PROFILE SHAREKHAN RETAIL BROKING Among the top three (3) branded retail services providers (Rs 856 crs average daily volume. NO. 2 player in online business Large network of branded broking outlets in the country servicing around 5, 45, 000 Clients MANAGEMENT TEAM Tarun P. Shah Mr. Jaideep Arora Shankar Vailaya BOARD OF DIRECTORS
  • 21 | P a g e BENEFITS Free Depository A/c Secure Order by Voice Tool Dial-n-Trade. Automated Portfolio to keep track of the value of your actual purchases. 24x7 Voice Tool access to your trading account. Personalized Price and Account Alerts delivered instantly to your Cell Phone & E-mail address. Special Personal Inbox for order and trade confirmations. On-line Customer Service via Web Chat. Anytime Ordering. NSDL Account Instant Cash Tranferation. Multiple Bank Option. Enjoy Automated Portfolio. Buy or sell even single share. Branch - Head Office A-206, Phoenix House, 2nd Floor, Senapati Bapat Marg, Lower Parel, Mumbai- 400 013. Telephone No: 67482000 Email: myaccount@sharekhan.com
  • 22 | P a g e KEY OFFICIALS DESIGNATION 1. Mr. Shripal Morakhia Chairman 2. Mr. Tarun Shah CEO 3. Mr. Kaliyan Raman Online Sales Head 4. Mr. Jason Pandey and DP Head Mr. Pradeep 5. Mr. Hemendra Aggarwal Cluster Head 6. Mr Amit pal Singh and Regional Sales Manager Mr. Maneet Rastogi
  • 23 | P a g e PRODUCTS OF SHAREKHAN CLASSIC ACCOUNT This account allows the client to trade through the website www.sharekhan.com and is suitable for the retail investor who is risk-averse and hence prefers to invest in stocks or who do not trade too frequently. It allows investor to buy and sell stocks online along with the following features like multiple watch lists, Integrated Banking, De-mat and Digital contracts, Real-time portfolio tracking with price alerts and Instant money transfer. FEATURES Online trading account for investing in Equity and Derivatives via www.sharekhan.com Live Terminal and Single terminal for NSE Cash, NSE F&O, BSE & Mutual Funds (online and offline). Integration of On-line trading, Saving Bank and De-mat Accounts. Instant cash transfer facility against purchase & sale of shares. Competative transaction charges. Instant order and trade confirmation by E-mail. Streaming Quotes (Cash & Derivatives). Personlized market watch. Single screen interface for Cash and derivatives and more. Provision to enter price trigger and view the same online in market watch. TRADE TIGER TRADE TIGER is an internet-based software application which is the combination of EQUITY & COMMODITIES, that enables you to buy and sell share and well as commodities item instantly. It is ideal for every client of SHAREKHAN LTD.
  • 24 | P a g e FEATURES Integration of EQUITY & COMMODITIES MARKET. Instant order Execution and Confirmation. Single screen trading terminal for NSE Cash, NSE F&O & BSE & Commodities. Technical Studies. Multiple Charting. Real-time streaming quotes, tic-by-tic charts. Market summary (Cost traded scrip, highest value etc.) Hot keys similar to broker‟s terminal. Alerts and reminders. Back-up facility to place trades on Direct Phone lines. Live market debts. DIAL-N-TRADE Along with enabling access for your trade online, the CLASSIC and TRADE TIGER ACCOUNT also gives you our Dial-n-trade services. With this service, all you have to do is dial our dedicated phone lines which are 1800-22-7500, 3970-7500. PORTFOLIO MANAGEMENT SERVICES Sharekhan is also having Portfolio Management Services for Exclusive clients. 1. PROPRIME - Research & Fundamental Analysis. Ideal for investors looking at steady and superior returns with low to medium risk appetite. This portfolio consists of a blend of quality blue-chip and growth stocks ensuring a balanced portfolio
  • 25 | P a g e with relatively medium risk profile. The portfolio will mostly have large capitalization stocks based on sectors & themes that have medium to long term growth potential. 2. PROTECH - Technical Analysis. Protech uses the knowledge of technical analysis and the power of derivatives market to identify trading opportunities in the market. The Protech lines of products are designed around various risk/reward/ volatility profiles for different kinds of investment needs.  THRIFTY NIFTY: Nifty futures are bought and sold on the basis of an automated trading system that generates calls to go long/short. The exposure never exceeds value of portfolio i.e. there is no leveraging; but being short in Nifty allows you to earn even in falling markets and there by generates linear  BETA PORTFOLIO: Positional trading opportunities are identified in the futures segment based on technical analysis. Inflection points in the momentum cycles are identified to go long/short on stock/index futures with 1-2 month time horizon. The idea is to generate the best possible returns in the medium term irrespective of the direction of the market without really leveraging beyond the portfolio value. Risk protection is done based on stop losses on daily closing prices.  STAR NIFTY: Trailing Stops Momentum trading techniques are used to spot short term momentum of 5-10 days in stocks and stocks/index futures. Trailing stop loss method of risk management or profit protection is used to lower the portfolio volatility and maximize returns. Trading opportunities are explored both on the long and the short side as the market demands to get the best of both upwards & downward trends. 3. PROARBITRAGE - Exploit price analysis - ONLINE IPO'S AND MUTUAL FUNDS ADVISORY IS AVAILABLE.
  • 26 | P a g e PROCESS OF ACCOUNT OPPENING LEAD MANAGEMENT SYSTEM (LMS) / REFERENCES CONTACT TELEPHONE AND PRESONAL VISIT APPOINTMENT DEMONSTRATION AGREE DISAGREE (CLOSE) DOCUMANTATION FILLING THE FORM SUBMISSION THE FORM LOGIN OF THE FORM SENDING THE ACCOUNT OPENING KIT TO THE CUSTOMER FOR TRADING
  • 27 | P a g e CHARGE STRUCTURE 1)- PRE PAID OR AMC A/C: -  Advance Amount which will be fully adjsted against your brokerage you paid in One year. Following Schemes Are Available: - Brokerage will be chagred - 1) - 750/- Scheme:- 0.05 / 0.50 % 2) - 1000/- Scheme 0.045 / 0.45 % 3) – 2,000/- Scheme: - 0.035 / 0.40 % 4) – 6,000/- Scheme: - 0.025 / 0.25 % 5) – 18,000/- Scheme: - 0.020 / 0.20 % 6) – 30,000/- Scheme: - 0.015 / 0.18 % 7) – 60,000/- Scheme: - 0.010 / 0.15 % 8) – 1,00,000/- Scheme: - 0.0075 / 0.10 % Minimum Margine of Rs. 25000/- is Required for Account Opening. Annual Maintanance Charges will NIL for 1st year and Rs. 400/- from 2nd year. - EXPOSURE : 4 TIMES (ON MARGINE MONEY) - EXPOSURE : 10 TIMES (ON MAX TRADING) - ONLINE IPO'S AND MUTUAL FUNDS ADVISORY IS AVAILABLE. We are having tie-up with Eleven banks for online fund transfering i.e. HDFC, ICICI, IDBI, CITI, Union Bank of India, Oriental Bank of Commerce, INDUSIND, AXIS, Centurian Bank of Punjab, Bank of India and Yes Bank.
  • 28 | P a g e Company Provide 4-6 E-mail to there customers per day. Online Trade in Share Sharekhan customers can online trade through there computers, through internet during the market timings. Online Fund Transfer We have tie up with Eleven Banks for online fund transferring i.e. HDFC, IDBI, CITI, UBI, OBC, INDSLANDAND and UTI BANK, Yes bank, Bank of India for Online Money Transfer. Research based investment advice Investment and trading services Trading and seminars Technology based investment tools Integrated demat facility CUSTOMER CAN TRADE IN o Equities o Derivatives o Commodities
  • 29 | P a g e SWOT ANALYSIS OF SHAREKHAN (My observation) STRENGTHS 1. Big client base 2. In-house research house 3. online as well as offline trading 4. Online IPO/ MF services 5. Share shops 6. Transparent 7. User friendly tie ups with 10 banks 8. Excellent order execution speed and reliability WEAKNESS 1. Lack of awareness among customer 2. Less focus on customer retention 3. Less Exposure OPPORTUNITIES 1. Diversification 2. Product modification 3. Improve Web based trading 4. Provide competitive brokerage 5. Concentrate on PMS 6. Focus on Institutional investors 7. Concentrate on HNI‟s (high net worth investor)
  • 30 | P a g e THREATS 1. Aggressive promotional strategies by close competitor like Religare, Angel Broking and India bulls. 2. More and more players are venturing into this domain, which can further reduce the earning of Share Khan. 3. Stock market is very volatile, risk involves is very high.
  • 31 | P a g e LITERATURE REVIEW A number of academic studies have provided evidence of demographic and non demographic characteristics related to the financial risk tolerance of individuals. The most common variables researched by academics to determine their relationship with financial risk tolerance are gender, age, marital status, number of dependents, income, wealth, education and financial knowledge. We report the main findings as well as a number of less-researched variables. Gender differences have been widely examined, with a large number of studies reporting higher financial risk tolerance for males (Grable, 2000; Grable and Joo, 2000; Bemasek and Shwiff, 2001; Chaulk, Johnson, and Bulcroft, 2003; Yook and Everett, 2003; Grable, Lytton, and O'Neill, 2004; Hallahan, Faff, and McKenzie, 2004; Yao, Hanna, and Lindamood, 2004; Fan and Xiao, 2006; Van de Venter and Michayluk, 2007; Gilliam, Chatterjee, and Zhu,2010). Studies have also argued that financial risk tolerance decreases with age (Xiao, Alhabeeb, Hong, and Haynes, 2000; Chaulk, Johnson, and Bulcroft, 2003; Hallahan, Faff, and McKenzie, 2004; Yao, Hanna, and Lindamood, 2004; Fan and Xiao, 2006; Van de Venter and Michayluk, 2007; Faff, Hallahan, and McKenzie, 2009). Furthermore, a nonlinear aspect to age has been observed (Hallahan, Faff, and McKenzie, 2004; Grable, Lytton, O'Neill, Joo, and Klock, 2006; Faff, Hallahan, and Mckenzie, 2009). The primary explanation for the observation of a significantly negative coefficient for age and the nonlinear relationship has been attributed to the time horizon to recover losses that is lower with age and the higher reliance on investment funds as individuals‟ age. Marital status has been widely studied, especially because of its interaction with age and gender. Financial risk tolerance is higher for single individuals (Grable and Joo, 2004; Hallahan, Faff, and McKenzie, 2004; Yao, Hanna, and Lindamood, 2004; Fan and Xiao,2006). The main justification for this result is that single individuals do not hold the same responsibilities as those that are married and thus the single individuals are willing to accept more financial risk. For example, Chaulk, Johnson, and Bulcroft (2003) propose that married individuals tend to have a lower financial risk tolerance because of a greater need for wealth protection. When gender and marital status are incorporated together, Jianakoplos and Bemasek
  • 32 | P a g e (1998) and Bemasek and Shwiff (2001) find that single men tend to be more risk tolerant than single women. A negative relationship between financial risk tolerance and the number of dependents is identified by Chaulk, Johnson, and Bulcroft (2003) and Hallahan, Faff, and McKenzie (2004), with Faff, Hallahan, and McKenzie (2009) proposing a statistically significant nonlinear linkage. This negative relationship has been identified with marital status and may exist because of the added responsibilities and more conservative outlook to risk when dependents are considered. Higher financial risk tolerance is reported for individuals in high income and wealth categories (Grable, 2000; Chaulk, Johnson, and Bulcroft, 2003; Yook and Everett, 2003; Chang, DeVaney, and Chiremba, 2004; Grable and Joo, 2004; Grable, Lytton, and O'Neill, 2004; Hallahan, Faff, and McKenzie, 2004; Yao, Hanna, and Lindamood, 2004; Fan and Xiao, 2006). In addition, Grable and Joo (1999) indicate a significantly positive relationship between financial risk tolerance and an individual's level of financial solvency. A positive relationship has been identified between financial risk tolerance and education (Grable, 2000; Chang, DeVaney, and Chiremba, 2004; Grable and Joo, 2004; Hallahan, Faff, and McKenzie, 2004; Yao, Hanna, and Lindamood, 2004; Fan and Xiao, 2006). Hallahan, Faff, and Mckenzie (2004) also observe high positive correlations between income, wealth, and education, suggesting that financial risk tolerance could be a function of income and wealth rather than education. Financial or investment knowledge has a positive relationship with financial risk tolerance (Grable, 2000; Grable and Joo, 2000, Grable and Joo, 2004; Van de Venter and Michayluk, 2007). However, Davey (2004) challenges the view that educating individual investors about financial markets and instruments will necessarily increase their financial risk tolerance. Although the financial education of an advisor's clients is considered best practice, it will most likely not have any direct influence on the risk preference of an individual as even the most knowledgeable and educated could potentially have a low financial risk tolerance.
  • 33 | P a g e When advising clients about investment decisions, financial advisors have to consider both their financial goals and financial risk tolerance. In many cases these two could conflict, leading advisors to recommend that individuals take on more risk than they are comfortable with to meet their financial goals. Bemasek and Shwiff (2001) report that individuals generally tend to increase the level of risk of their retirement savings after they have consulted a financial advisor. Furthermore, this increase was found to be statistically significant for both the respondent and the spouse or partner consulting a financial advisor, possibly suggesting the existence of a relationship between gender and marital status as well. In contrast to the earlier finding. Van de Venter and Michayluk (2007) find no statistically significant effect on financial risk tolerance when a financial advisor is consulted. When examining whether a financial advisor has any impact on investment behavior. Hung and Yoong (2009) conclude that unless financial guidance is actively sought by the individual, consulting a financial advisor has no impact on investment behavior. This finding highlights the difficulty when interpreting survey questions that encompass financial advisors, and whether their advice is undertaken. Finally, Grable (2000) reports that individuals with positive economic expectations have higher financial risk tolerance scores than those with less positive expectations, with Van de Venter and Michayluk (2007) also finding evidence that financial risk tolerance is positively related to both future expectations and previous investment performance. These previous findings identify many factors that might influence risk tolerance on their own or in combination with others.
  • 34 | P a g e
  • 35 | P a g e OBJECTIVES OF THE STUDY 1. To understand the risk profile of investors. 2. To study risk bearing capacity on the basis of gender, education, occupation, age, family income and number of dependents.
  • 36 | P a g e
  • 37 | P a g e RESEARCH METHODOLOGY Research methodology is way to systematically solve the research problem. Research, in common terms refers to a search for knowledge. Research methodology consists of different steps that are generally adopted by a researcher to study the research problem along with the logic behind them. RESEARCH DESIGN:  Research design is the plan, structure and strategy of investigation conceived so as to obtain answers to research question.  There are two types of research design. One is exploratory research and other is descriptive research EXPLORATORY RESEARCH:  We studied the company report, talked to the customers and employee of the company. We identified that inspite of providing various opportunities customers may not be aware of derivative and commodity products. DESCRIPTIVE RESEARCH Survey method was adopted for this research DATA SOURCES: The study is mainly based on the data collection from primary as well as secondary sources. Primary data: Data collected for specific purposes in the form of questionnaire Secondary data: Data existing in the form of Books, Internet, Catalogues etc.
  • 38 | P a g e SAMPLING DESIGN: Definition of population: All the customers of share khan. Sampling procedure: A non probability sampling technique i.e. convenient sampling procedure was adopted. Sampling size: A sample of 96 customers was selected from the target population for the study. RESEARCH METHODOLOGY: Research design : descriptive in nature. Data source : data collected from primary and secondary sources. Primary data : primary data is collected from the respondent through these structured questionnaires. SAMPLING DESIGN: Sample size : 96 Sampling procedure : Convenience sampling Statistical tool : Percentage method, mean, chi-square test. STATISCAL TOOLS: For the purpose of analysis, Mean and percentage methods are used for the calculation and the result was interpreted. This test was used to minimize the error of the data collected.
  • 39 | P a g e STATISTICAL TOOLS USED: Sample tools are used for analyze purpose, they are follows: 1. Cross tab method 2. Chi square test 3. Phi and Cramer V test Null hypothesis (HO) states: the two attributes are independent of each other. Alternative hypothesis (HI) states: the two attributes are dependent of each other.
  • 40 | P a g e
  • 41 | P a g e 1. To understand the risk profile of investors Q9. What do you expect when you invest ? CHART-1 Interpretation:- This chart-1 shows, out of 96 respondents 40 people are ready to bear nominal risk and 36 people don‟t want to take any risk. This shows that around 79% respondents are conservative in terms of taking risk and only 21% respondents are ready to bear risk and out of these 21 % only 3% are ready for high risk situation. NO RISK NOMINAL RISK MODERATE RISK HIGHER RISK Series1 36 40 18 2 0 5 10 15 20 25 30 35 40 45 AxisTitle RISK
  • 42 | P a g e Q10 . How long do you normally hold investment? CHART -2 Interpretation:- As per Chart-2,most of the respondents invest for a longer time period i.e. around 32% and rest of the respondents have very less variability regarding holding of investment as all other respondents are equally interested in daily, weekly or monthly holding of investment i.e. around 20% go for each kind of investment holding. FOR A DAY FOR A WEEK FOR A MONTH FOR A YEAR Series1 22 25 18 31 0 5 10 15 20 25 30 35 AxisTitle TIME PERIOD
  • 43 | P a g e Q11. If your investments were to fall in value by 15 per cent over a one-year period, you will Chart -3 . Interpretation:- Chart-3 is giving the overview regarding respondents reaction related to their investment, if market falls in value. We can see here the respondents /investors are neither very conservative nor aggressive in market condition i.e. only 15% investors are willing to withdraw all money or invest more money in such situation. Most of the respondents are aware & ready for such condition. They want to be in the market in expectation of money of market. WITHDRA W ALL MONEY FROM SHARE MARKET TAKE OUT SOME MONEY AND MOVE IT TO SAFER… WAIT UNTIL MARKET RECOVERS THE LOSS AND… STICK TO THE INVESTME NT INVEST MORE MONEY IN THE SAME INVESTME NT AS IT… Series1 13 21 26 23 13 0 5 10 15 20 25 30 AxisTitle INVESTMENT FALL BY 15%
  • 44 | P a g e Q12. You are ready for limited losses in expectation of higher long-term returns? Chart-4 Interpretation:- Chart-4 is about that whether investors are ready to bear limited loss in expectation of high returns we find that only around 30% investors are not agree for this but around 70% are considering the idea i.e. most of the respondents are aware about the ups & downs of stock market & ready for risks involved in it in expectation of getting higher returns. STRONGLY DISAGREE DISAGREE NEITHER AGREE OR DISAGREE AGREE STRONGLY AGREE Series1 14 16 24 36 6 0 5 10 15 20 25 30 35 40 AxisTitle LIMITED LOSSES IN EXPECTATION OF HIGHER RETURNS
  • 45 | P a g e Q.13. I am willing to experience the ups and downs of the market for the potential of greater returns. Chart-5 Interpretation:- Chart-5 is about that whether investors are ready to experience ups and downs of market we find that only around 16% investors are not agree for this but around 84% are considering the idea i.e. most of the respondents are aware about the ups & downs of stock market & want to experience that. STRONGLY DISAGREE DISAGREE NEITHER AGREE OR DISAGREE AGREE STRONGLY AGREE Series1 5 11 39 35 6 0 5 10 15 20 25 30 35 40 45 AxisTitle EXPERIENCE UPS AND DOWNS OF MARKET
  • 46 | P a g e Q14. My main concern is security; keeping money safe is more important than earning high returns. Chart-6 Interpretation:- This chart -6 shows the investors are aware about the highs and lows of security market and want to experience that also they are quite positive towards market as they expect after a low market will recover & give them higher return still the safety is major concern of investors. Out of total 96 respondents only less than 10% disagree with the fact. STRONGLY DISAGREE DISAGREE NEITHER AGREE OR DISAGREE AGREE STRONGLY AGREE Series1 2 4 24 32 34 0 5 10 15 20 25 30 35 40 AxisTitle MAIN CONCERN IS SAFETY
  • 47 | P a g e Q15. I am fairly experienced in investment. Chart-7 INTERPRETATION:- As we can see in the chart-7, most of the respondents i.e. around 50% are not sure about their investment capabilities. They are not very sure that their expectation of decision is fair enough. Here I want to mention that the market is so volatile in India that very less investors find themselves fairly enough experienced & don‟t bear losses. STRONGLY DISAGREE DISAGREE NEITHER AGREE OR DISAGREE AGREE STRONGLY AGREE Series1 4 15 43 29 5 0 5 10 15 20 25 30 35 40 45 50 AxisTitle FAIRLY EXPERIENCED IN INVESTMENT
  • 48 | P a g e Q16. I am very secure related to my future income (such as from salary, pension or other investments)? Chart-8 Interpretation:- Chart-8 shows that most of people involve in security market are quite secured related to their future income. We can also understand the statement that the people who have fair enough income resources, comes in security investment as they consider all the pros. & cons. Of the market they know that the market is good place to get better returns but it also contain risk so losses bearable only in the case of secured future returns. STRONGLY DISAGREE DISAGREE NEITHER AGREE OR DISAGREE AGREE STRONGLY AGREE Series1 2 4 15 23 52 0 10 20 30 40 50 60 AxisTitle SECURE RELATED TO FUTURE INCOME
  • 49 | P a g e 2. To study risk bearing capacity on the basis of gender, education, occupation, age, family income and number of dependents To fulfill this objective I used cross tabs & chi-square test The results are compiled in a sheet which shows the significance value & chi- square values of all the cross tabs. Here I am providing 2 null hypothesis & 2 alternative hypothesis conditions as sample. Sample- Null Hypothesis Gender in respect of expectation from an investment X1 * X9 Crosstabulation Count X9 Total NO RISK NOMINAL RISK MODERATE RISK HIGHER RISK X1 MALE 27 29 13 2 71 FEMALE 9 11 5 0 25 Total 36 40 18 2 96 Chi-Square Tests Value Df Asymp. Sig. (2-sided) Pearson Chi-Square .797 a 3 .850 Likelihood Ratio 1.299 3 .729 Linear-by-Linear Association .011 1 .917 N of Valid Cases 96 a. 3 cells (37.5%) have expected count less than 5. The minimum expected count is .52. Interpretation: - As the chi-square shows the value of P is higher than .05, we will accept null hypothesis i.e. there is no significant relationship in between the expectation from investment with change in gender. Males and females are equally risk averse & conservative related to taking risk in stock market.
  • 50 | P a g e Gender in respect of holding time of investment X1 * X10 Crosstabulation Count X10 Total DAY WEEK MONTH YEAR X1 MALE 15 19 13 24 71 FEMALE 7 6 5 7 25 Total 22 25 18 31 96 Chi-Square Tests Value Df Asymp. Sig. (2-sided) Pearson Chi-Square .656 a 3 .883 Likelihood Ratio .647 3 .886 Linear-by-Linear Association .384 1 .536 N of Valid Cases 96 a. 1 cells (12.5%) have expected count less than 5. The minimum expected count is 4.69. Interpretation :- As the chi-square shows the value of P is higher than .05, we will accept null hypothesis i.e. there is no significant relationship in between the investment holding with change in gender. Males and females are equally risk averse & conservative in holding the investment.
  • 51 | P a g e Sample- Alternate Hypothesis Family income in respect of risk bearing capacity X7 * X9 Crosstabulation Count X9 Total NO RISK NOMINAL RISK MODERATE RISK HIGHER RISK X7 < 5LAKH 21 17 4 1 43 5-15 LAKH 15 23 10 1 49 15-25 LAKH 0 0 4 0 4 Total 36 40 18 2 96 Chi-Square Tests Value df Asymp. Sig. (2-sided) Pearson Chi-Square 21.932 a 6 .001 Likelihood Ratio 18.359 6 .005 Linear-by-Linear Association 9.013 1 .003 N of Valid Cases 96 a. 6 cells (50.0%) have expected count less than 5. The minimum expected count is .08. Interpretation :-As the chi-square shows the value of P is higher than .05, we will accept alternative hypothesis i.e. there is a significant relationship in between the expectation from investment with change in family income. Investors are balanced & aggressive related to taking risk in stock market.
  • 52 | P a g e Education in respect of holding time period for investment Chi-Square Tests Value Df Asymp. Sig. (2-sided) Pearson Chi-Square 20.330 a 9 .016 Likelihood Ratio 22.004 9 .009 Linear-by-Linear Association 6.992 1 .008 N of Valid Cases 96 a. 9 cells (56.3%) have expected count less than 5. The minimum expected count is .75. Interpretation :- As the chi-square shows the value of P is higher than .05, we will accept null hypothesis i.e. there is a significant relationship in between the investment holding with change in education. Investors are risk averse & conservative related to holding the investment. As from the above crosstabs the table- 1 is drawn in reference with the chi- square values and the significance values on different parameters and fills the box with yellow color who gives the best alternative hypothesis value. Then after interpret that value which is come under that yellow box and show their cross tabs. X4 * X10 Crosstabulation Count X10 Total DAY WEEK MONTH YEAR X4 UNDER GRADUATE 1 1 3 10 15 GRADUATE 14 15 5 17 51 POST GRADUATE 6 7 9 4 26 PH.D. 1 2 1 0 4 Total 22 25 18 31 96
  • 53 | P a g e TABLE-1 S.No. QUESTIONS GENDER OCCUPATION AGE EDUCATION Pearson chi-square Significa nce Pearson chi- square Signific ance Pearson chi- square signifi cance Pearson chi- square Significance 1 What do you expect when you invest? 0.797 0.85 9.131 0.425 8.871 0.449 8.854 0.451 2 How long do you normally hold investments? 0.656 0.883 5.669 0.773 4.203 0.898 20.330 0.016 3 If your investments were to fall in value by 15 per cent over a one- year period, you will 6.934 0.139 13.707 0.32 16.943 0.152 11.253 0.507 4 You are ready for limited losses in expectation of higher long-term returns? 6.266 0.18 17.361 0.137 9.682 0.644 28.133 0.005 5 I am willing to experience the ups and downs of the market for the potential of greater returns. 3.639 0.457 7.389 0.831 14.934 0.245 10.855 0.541 6 My main concern is security; keeping money safe is more important than earning high returns. 2.453 0.653 13.083 0.363 9.164 0.689 9.537 0.657 7 I am fairly experienced in investment. 0.570 0.966 7.997 0.785 16.547 0.167 11.665 0.473 8 I am very secure related to my future income (such as from salary, pension or other investments)? 2.561 0.634 9.092 0.695 5.942 0.919 3.830 0.986
  • 54 | P a g e S.No. QUESTIONS INCOME No. of dependents in Family FAMILY INCOME PERCENTAGE OF TOTAL INVESTMENT Pearson chi-square Significa nce Pearson chi- square Signific ance Pearson chi- square signifi cance Pearson chi- square Significance 1 What do you expect when you invest? 12.718 0.176 10.880 0.539 21.932 0.001 11.360 0.078 2 How long do you normally hold investments? 7.112 0.625 10.015 0.615 5.675 0.461 10.966 0.089 3 If your investments were to fall in value by 15 per cent over a one- year period, you will 11.086 0.522 12.448 0.713 7.197 0.516 7.471 0.487 4 You are ready for limited losses in expectation of higher long-term returns? 21.667 0.041 26.948 0.042 21.371 0.006 15.920 0.044 5 I am willing to experience the ups and downs of the market for the potential of greater returns. 9.029 0.7 16.915 0.391 5.955 0.652 2.999 0.934 6 My main concern is security; keeping money safe is more important than earning high returns. 10.156 0.602 23.013 0.113 4.279 0.831 10.899 0.207 7 I am fairly experienced in investment. 9.603 0.651 22.605 0.125 5.714 0.679 7.066 0.529 8 I am very secure related to my future income (such as from salary, pension or other investments)? 7.621 0.814 22.073 0.141 6.356 0.607 3.412 0.906
  • 55 | P a g e Expectation of risk from an investment From the Table-1 we can see that the all respondents‟ views are indifferent in terms of expectation of risk from investment irrespective of their gender, occupation, age, education, income, No. of dependent in the family and the percentage of total income they invest as most of the respondents wish to tale either no risk or nominal risk. This defines the conservatism related to risk profile of the respondents. But on the basis of Family income it shows a significant relationship as p-value is less than .05, which suggests accepting alternate hypothesis. The relationship is defined as follows: Table-2 Family income in respect of expectation of risk from an investment X7 * X9 Crosstabulation Count X9 Total NO RISK NOMINAL RISK MODERATE RISK HIGHER RISK X7 < 5LAKH 21 17 4 1 43 5-15 LAKH 15 23 10 1 49 15-25 LAKH 0 0 4 0 4 Total 36 40 18 2 96 49% 31% 0% 40% 47% 0%9% 20% 100% 2% 2% 0% < 5LAKH 5-15 LAKH 15-25 LAKH Family income in respect of expectation of risk NO RISK NOMINAL RISK MODERATE RISK HIGHER RISK
  • 56 | P a g e Chi-Square Tests Value Df Asymp. Sig. (2-sided) Pearson Chi-Square 21.932 a 6 .001 Likelihood Ratio 18.359 6 .005 Linear-by-Linear Association 9.013 1 .003 N of Valid Cases 96 a. 6 cells (50.0%) have expected count less than 5. The minimum expected count is .08. Symmetric Measures Value Approx. Sig. Nominal by Nominal Phi .478 .001 Cramer's V .338 .001 N of Valid Cases 96 Here from Table -2, it is clear that all the respondents belong to the family income group of < 5 Lakh and 5-15 Lakh are willing to take only nominal or no risk. In this situation as the income level increases the risk taking ability is shifted towards the bearing the more risk. This chart shows that most of the respondents lie in the income level group of <5 lakh want to go for no risk situation but as the income level increases to 5-15 lakh people get shifted from no risk to nominal risk situation. In the chart it is shown that out of 43 respondents who lies between the income level group of<5lakh around 50% respondents do not want any risk in their investments. are go for no risk and only 2% are going for high risk investments. Out of 49 respondents who lies in between income group of 5-15 lakh 46% are go for moderate risk ,30% are for no risk . So it defines that there is direct relationship between income and risk bearing capacity of persons. People belong to the income group of 15-25 Lakh as are more towards taking moderate risk. But the strength of relationship is very low as the value of Cramer‟s V is .338.
  • 57 | P a g e Investment holding From the Table-1 we can see that the all respondents‟ views are indifferent in terms of expectation of risk from investment irrespective of their gender, occupation, age, education, income, No. of dependent in the family and the percentage of total income they invest as most of the respondents wish to hold investments either for a week or for a year. This defines the conservatism related to risk profile of the respondents. But on the basis of Education it shows a significant relationship as p-value is less than .05, which suggests accepting alternate hypothesis. The relationship is defined as follows: Table-3 Education in respect of their investment holding X4 * X10 Crosstabulation Count X10 Total DAY WEEK MONTH YEAR X4 UNDER GRADUATE 1 1 3 10 15 GRADUATE 14 15 5 17 51 POST GRADUATE 6 7 9 4 26 PH.D. 1 2 1 0 4 Total 22 25 18 31 96
  • 58 | P a g e Chi-Square Tests Value Df Asymp. Sig. (2-sided) Pearson Chi-Square 20.330 a 9 .016 Likelihood Ratio 22.004 9 .009 Linear-by-Linear Association 6.992 1 .008 N of Valid Cases 96 a. 9 cells (56.3%) have expected count less than 5. The minimum expected count is .75. Symmetric Measures Value Approx. Sig. Nominal by Nominal Phi .460 .016 Cramer's V .266 .016 N of Valid Cases 96 Here from Table -3, it is clear that all the respondents belong to the education group of graduates are willing to hold investments for a week or for a year. This chart shows that most of the respondents lie in the education level group of graduate wants to go for week or a year trading but as the education level increases to post graduates people get diversify their investment holding period. In the chart it is shown that out of 51 respondents who lies between the education level group of graduates around 33% respondents go for a year based investment holding. And only 7% are going for a day investment holding. Out of 26 respondents who lies in between education group of post graduates 35% are go for month investment holding, 7% 27% 23% 25% 7% 29% 27% 50% 20% 10% 35% 25% 67% 33% 15% 0% 0% 10% 20% 30% 40% 50% 60% 70% UNDER GRADUATE GRADUATE POST GRADUATE PH.D. Education in respect of investment holdings DAY WEEK MONTH YEAR
  • 59 | P a g e 15% are for year investment holding. So it defines that there is direct relationship between education and investment holding tenure. People belong to the education group of graduates are more towards the holding investment for a week or a year . But the strength of relationship is very low as the value of Cramer‟s V is .266.
  • 60 | P a g e Limited losses in expectation of higher long term returns From the Table-1 we can see that the all respondents‟ views are indifferent in terms of bearing limited losses in the expectation of higher long term returns irrespective of their gender, occupation, age, education, income, No. of dependent in the family and the percentage of total income they invest as most of the respondents wish to tale either agree or neither agree or disagree in respect of bearing losses in expectation of higher long term returns. This defines the balanced approach related to risk profile of the respondents. But on the basis of Education it shows a significant relationship as p-value is less than .05, which suggests accepting alternate hypothesis. The relationship is defined as follows: Table-4 ( Education in respect of bearing limited losses in expectation of higher long term returns) X4 * X12 Crosstabulation Count X12 Total STRONGLY DISAGREE DISAGRE E NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE X4 UNDER GRADUATE 3 7 2 1 2 15 GRADUATE 8 8 17 17 1 51 POST GRADUATE 3 1 4 15 3 26 PH.D. 0 0 1 3 0 4 Total 14 16 24 36 6 96
  • 61 | P a g e Chi-Square Tests Value df Asymp. Sig. (2-sided) Pearson Chi-Square 28.133 a 12 .005 Likelihood Ratio 29.565 12 .003 Linear-by-Linear Association 10.020 1 .002 N of Valid Cases 96 a. 13 cells (65.0%) have expected count less than 5. The minimum expected count is .25. Symmetric Measures Value Approx. Sig. Nominal by Nominal Phi .541 .005 Cramer's V .313 .005 N of Valid Cases 96 Here from Table -4, it is clear that all the respondents belong to the education group of graduate are willing to take limited losses in expectation of higher returns. 20% 16% 12% 0% 47% 16% 4% 0% 13% 33% 15% 25% 7% 33% 58% 75% 13% 2% 12% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% UNDER GRADUATE GRADUATE POST GRADUATE PH.D. STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE Education in respect of bearing limited losses in expectation of higher long term returns
  • 62 | P a g e This chart shows that most of the respondents lie in the education level group of graduate and under graduates wants to bear limited losses in expectation of higher returns but as the education level decreases to under graduates‟ people is more concern about bearing limited losses in expectation of higher returns. In the chart it is shown that out of 51 respondents who lies between the education level group of graduates around 33% respondents are agree with bearing limited losses in expectation of higher returns . And only 13% are not agree with it. Out of 26 respondents who lies in between education group of post graduates 58% are agree, 12% are strongly agree with it. So it defines that there is direct relationship between education and bearing limited losses in expectation of higher returns. People belong to the education group of graduates as are more towards in taking the limited losses in expectation of higher returns. But the strength of relationship is very low as the value of Cramer‟s V is .313.
  • 63 | P a g e Income in respect of limited losses in expectation of higher long term return’s From the Table-1 we can see that the all respondents‟ views are indifferent in terms of bearing limited losses in the expectation of higher long term returns irrespective of their gender, occupation, age, education, income, No. of dependent in the family and the percentage of total income they invest as most of the respondents wish to tale either agree or neither agree or disagree in respect of bearing losses in expectation of higher long term returns. This defines the balanced approach related to risk profile of the respondents. But on the basis of income it shows a significant relationship as p-value is less than .05, which suggests accepting alternate hypothesis. The relationship is defined as follows: Table -5 Income in respect of limited losses in expectation of higher long term return’s X5 * X12 Crosstabulation Count X12 Total STRONGLY DISAGREE DISAGRE E NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE X5 < 3 LAKH 4 7 10 13 2 36 3-5 LAKH 7 9 10 13 2 41 5-10 LAKH 3 0 4 10 1 18 10-20 LAKH 0 0 0 0 1 1 Total 14 16 24 36 6 96
  • 64 | P a g e Chi-Square Tests Value Df Asymp. Sig. (2-sided) Pearson Chi-Square 21.667 a 12 .041 Likelihood Ratio 14.983 12 .242 Linear-by-Linear Association .978 1 .323 N of Valid Cases 96 a. 11 cells (55.0%) have expected count less than 5. The minimum expected count is .06. Symmetric Measures Value Approx. Sig. Nominal by Nominal Phi .475 .041 Cramer's V .274 .041 N of Valid Cases 96 Here from Table -5, it is clear that all the respondents belong to the income group of <3 lakh and 3-5 lakh are willing to take limited losses in expectation of higher returns. 11% 17% 17% 0% 19% 22% 0% 0% 28% 24% 22% 0% 36% 32% 56% 0% 6% 5% 6% 100% 0% 20% 40% 60% 80% 100% 120% < 3 LAKH 3-5 LAKH 5-10 LAKH 10-20 LAKH STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE Income in respect of limited losses in expectation of higher long term return’s
  • 65 | P a g e This chart shows that most of the respondents lie in the income level group of <3 lakh are agree for taking limited losses in expectation of higher returns but as the income level increases to 10- 20 lakh more people get shifted towards agree for taking limited losses in expectation of higher returns. In the chart it is shown that out of 41 respondents who lies between the income level group of 3-5lakh around 32% respondents are agree in taking limited losses in expectation of higher returns. and only 2% are strongly agree with it.But if the income increases to 10-20 lakh most of the persons are move towards strongly agree situation. So it defines that there is direct relationship between income and limited losses in expectation of higher returns. People belong to the income group of <3 lakh and 3-5 lakh as are more towards in taking the limited losses in expectation of higher returns. But the strength of relationship is very low as the value of Cramer‟s V is .274. TABLE-6 (No. of dependents in family in respectof limited losses in expectation of higher long term return’s) X6 * X12 Crosstabulation Count X12 Total STRONGLY DISAGREE DISAGRE E NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE X6 NO DEPENDENT 1 0 0 3 1 5 1-2 5 3 1 3 1 13 3-4 5 7 18 19 2 51 5-7 3 4 5 11 1 24 >7 0 2 0 0 1 3 Total 14 16 24 36 6 96
  • 66 | P a g e Chi-Square Tests Value Df Asymp. Sig. (2-sided) Pearson Chi-Square 26.948 a 16 .042 Likelihood Ratio 25.934 16 .055 Linear-by-Linear Association .233 1 .629 N of Valid Cases 96 a. 19 cells (76.0%) have expected count less than 5. The minimum expected count is .19. Symmetric Measures Value Approx. Sig. Nominal by Nominal Phi .530 .042 Cramer's V .265 .042 N of Valid Cases 96 Here from Table -6, it is clear that all the respondents belong to the no. of dependents group of 3-4 and 5-7 members are willing to take limited losses in expectation of higher returns. 20% 38% 10% 13% 0%0% 23% 14% 17% 67% 0% 8% 35% 21% 0% 60% 23% 37% 46% 0% 20% 8% 4% 4% 33% 0% 10% 20% 30% 40% 50% 60% 70% NO DEPENDENT 1 to2 3 to4 5 to7 >7 STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE No. of dependents in family in respectof limited losses in expectation of higher long term return’s
  • 67 | P a g e This chart shows that most of the respondents lie in the No. of dependents level group of 3-4 are agree for taking limited losses in expectation of higher returns but as the No. of dependents level increases to >7 more people get shifted towards disagree for taking limited losses in expectation of higher returns. In the chart it is shown that out of 51 respondents who lies between the No. of dependents level group of 3-4 around 37% respondents are agree in taking limited losses in expectation of higher returns. and only 4% are strongly agree with it. But if the No. of dependents increases to >7 most of the persons are move towards disagree situation. So it defines that there is direct relationship between income and limited losses in expectation of higher returns. People belong to the income group of 3 -4 and 5-7 members as are more towards in taking the limited losses in expectation of higher returns. But the strength of relationship is very low as the value of Cramer‟s V is .265.
  • 68 | P a g e Family income in respect of limited losses in expectation of higher long term return’s From the Table-1 we can see that the all respondents‟ views are indifferent in terms of bearing limited losses in the expectation of higher long term returns irrespective of their gender, occupation, age, education, income, No. of dependent in the family and the percentage of total income they invest as most of the respondents wish to tale either agree or neither agree or disagree in respect of bearing losses in expectation of higher long term returns. This defines the balanced approach related to risk profile of the respondents. But on the basis of family income it shows a significant relationship as p-value is less than .05, which suggests accepting alternate hypothesis. The relationship is defined as follows: TABLE-7 ( Family income in respect of limited losses in expectation of higher long term return’s) X7 * X12 Crosstabulation Count X12 Total STRONGLY DISAGREE DISAGRE E NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE X7 < 5LAKH 6 11 12 12 2 43 5-15 LAKH 8 4 12 23 2 49 15-25 LAKH 0 1 0 1 2 4 Total 14 16 24 36 6 96
  • 69 | P a g e Chi-Square Tests Value Df Asymp. Sig. (2-sided) Pearson Chi-Square 21.371 a 8 .006 Likelihood Ratio 15.805 8 .045 Linear-by-Linear Association 3.687 1 .055 N of Valid Cases 96 a. 7 cells (46.7%) have expected count less than 5. The minimum expected count is .25. Symmetric Measures Value Approx. Sig. Nominal by Nominal Phi .472 .006 Cramer's V .334 .006 N of Valid Cases 96 Here from Table -7, it is clear that all the respondents belong to the family income group of < 5 Lakh and 5-15 Lakh are willing to take limited losses in expectation of higher returns. 14% 16% 0% 26% 8% 25% 28% 24% 0% 28% 47% 25% 5% 4% 50% 0% 10% 20% 30% 40% 50% 60% < 5LAKH 5-15 LAKH 15-25 LAKH Family income in respect of limited losses in expectation of higher long term return’s STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE
  • 70 | P a g e This chart shows that most of the respondents lie in the family income group of 5-15 lakh are agree for taking limited losses in expectation of higher returns but as the family income level increases to 15-25 lakh no. of people are decreases towards disagree for taking limited losses in expectation of higher returns. In the chart it is shown that out of 49 respondents who lies between the family income level group of 5-15 lakh around 47% respondents are agree in taking limited losses in expectation of higher returns. and only 16% are strongly disagree with it. But if the family income increases to 15-25 lakh no. of the persons are decreased in disagree situation. So it defines that there is direct relationship between income and limited losses in expectation of higher returns. People belong to the income group of <5 lakh and 5-15 lakh as are more towards in taking the limited losses in expectation of higher returns. But the strength of relationship is very low as the value of Cramer‟s V is .334.
  • 71 | P a g e Percentage of total investment in respect of limited losses in expectation of long term return’s From the Table-1 we can see that the all respondents‟ views are indifferent in terms of bearing limited losses in the expectation of higher long term returns irrespective of their gender, occupation, age, education, income, No. of dependent in the family and the percentage of total income they invest as most of the respondents wish to take either agree or neither agree or disagree in respect of bearing losses in expectation of higher long term returns. This defines the balanced approach related to risk profile of the respondents. But on the basis of percentage of total investment it shows a significant relationship as p-value is less than .05, which suggests accepting alternate hypothesis. The relationship is defined as follows: TABLE -8 (Percentage of total investment in respect of limited losses in expectation of long term return’s) X8 * X12 Crosstabulation Count X12 Total STRONGLY DISAGREE DISAGRE E NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE X8 BELOW 20% 6 11 20 14 2 53 20%-40% 8 5 4 21 4 42 40%-60% 0 0 0 1 0 1 Total 14 16 24 36 6 96 11% 19% 0% 21% 12% 0% 38% 10% 0% 26% 50% 100% 4% 10% 0% 0% 20% 40% 60% 80% 100% 120% BELOW 20% 20%-40% 40%-60% Percentage of total investment in respect of limited losses in expectation of long term return’s STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE
  • 72 | P a g e Chi-Square Tests Value df Asymp. Sig. (2-sided) Pearson Chi-Square 15.920 a 8 .044 Likelihood Ratio 17.029 8 .030 Linear-by-Linear Association 1.860 1 .173 N of Valid Cases 96 a. 7 cells (46.7%) have expected count less than 5. The minimum expected count is .06. Symmetric Measures Value Approx. Sig. Nominal by Nominal Phi .407 .044 Cramer's V .288 .044 N of Valid Cases 96 Here from Table -8, it is clear that all the respondents belong to the percentage of total income in investment group of < 20% and 20%-40% are willing to take limited losses in expectation of higher returns. This chart shows that most of the respondents lie in the percentage of total investment group of below 20% are neither agree or disagree for taking limited losses in expectation of higher returns but as the percentage of total investment level increases to 40%-60% no. of people are increases towards agree for taking limited losses in expectation of higher returns. In the chart it is shown that out of 52 respondents who lies between percentage of total investment level group of below 20% around 38%respondents are neither agree or disagree in taking limited losses in expectation of higher returns and only 26% are agree with it. But if the percentage of total investment increases to 40%-60% no. of the persons is increased in agree situation. So it defines that there is direct relationship between income and limited losses in expectation of higher returns. People belong to the income group of <20% and 20%-40% as are more towards in taking the limited losses in expectation of higher returns. But the strength of relationship is very low as the value of Cramer‟s V is .288. .
  • 73 | P a g e
  • 74 | P a g e FINDINGS AND CONCLUSIONS:-  Most of the respondents are ready to take either no risk or nominal risk while doing the investment.  Most of the respondents are generally go for longer time horizon.  There is a situation of investment fall by 15% then most of the respondents are neither conservative nor aggressive.  Most of the respondents are agree to take limited losses in expectation of higher returns.  Most of the respondents are give their opinion in the favor of experiencing the ups and downs of the market.  Most of the respondents are agreeing with this there main concern is safety.  Most of the respondents are said that they are not sure about fairly experienced in investment.  Most of the respondents are in favors of they are very much concern with security related to future income.  This study shows most of the respondents either go for conservative risk profile or balanced risk profile.  This study helps in describing the risk profile of investors.  This study describes the strong relationship between demographic data in respect of different parameters.
  • 75 | P a g e BIBLOGRAPHY:-  www.google.com  www.wikipedia.com  www.ebscohost.com  www.sharekhan.com  Financial derivatives and risk management by L.C.GUPTA
  • 76 | P a g e QUETIONAIRE Investment Pattern on the basis of Risk profile of Investors I am a final year student currently pursuing my Post Graduate Diploma in Management (PGDM) at I.T.S-Institute of Management, Greater Noida. I am conducting a research study on “An analysis on investor behavior on various investment avenues”. This research (project) is taken as a partial requirement for the completion of my PGDM. I seek your kind assistance in completing the attached questionnaire which would take few minutes from your valuable time. Your responses will be treated as Strictly Confidential. Personal Information 1. Gender a) Male b) Female 2. Occupation i) Businessii) Service iii) Students iv) House wife 3. Age i) 20-30 ii) 30-40 iii) 40-50 iv) Above 50 4. Education i) Under Graduate ii) Graduate iii) Post Graduate iv) Ph. D. 5. Income a) < 3 Lakh b) 3-5 Lakh c) 5-10 lakh d) 10-20 Lakh e) > 20 Lakh 6. No. of dependents in Family a) No dependent b) 1-2 c) 3-4 d) 5-7 e) >7 7. Family Income a) <5 Lakh b) 5-15 lakh c) 15-25 Lakh d) > 25 Lakh 8. How much percentage of total income he/she invests? a) Below 20% b) 20 % - 40 % c) 40 % - 60% d) > 60 % The risk-profile questionnaire 1. What do you expect when you invest? a) no risk b) nominal risk c) moderate risk d) higher risk 2. How long do you normally hold investments? a) For a day b) For a week c) For a month d) For a year
  • 77 | P a g e 3. If your investments were to fall in value by 15 per cent over a one-year period, you will a) withdraw all money from share market b) Take out some money and move it to a safer investment. c) Wait until market recovers the loss and then consider other investments. d) Stick to the investment. e) Invest more money in the same investment as it is 15 per cent cheaper 4. You are ready for limited losses in expectation of higher long-term returns? a) Strongly disagree b) Disagree c) Neither agree nor disagree d) Agree e) strongly agree 5. I am willing to experience the ups and downs of the market for the potential of greater returns. a) Strongly disagree b) Disagree c) Neither agree nor disagree d) Agree e) Strongly agree 6. My main concern is security; keeping money safe is more important than earning high returns. a) Strongly disagree. b) Disagree. c) Neither agree nor disagree. d) Agree. e) Strongly agree. 7. I am fairly experienced in investment. a) Strongly disagree. b) Disagree. c) Neither agree nor disagree. d) Agree. e) Strongly agree. 8. I am very secure related to my future income (such as from salary, pension or other investments)? a) Strongly disagree. b) Disagree. c) Neither agree nor disagree. d) Agree. e) Strongly agree.
  • 78 | P a g e