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Hedging Techniqu

Hedging Techniqu

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Published by Gourav Sharma

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Published by: Gourav Sharma on Apr 29, 2011
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01/24/2012

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HEDGING TECHNIQUESINMUTUAL FUNDS(Franklin Templeton)
Submitted to Lovely Professional UniversityIn partial fulfillment of theRequirements for the award of Degree of Master of Business Administration Submitted by Guided byArun Sharma Mrs. ShellyRegistration No. 2020070160 Lecturer (Mgt)LSB DEPARTMENT OF MANAGEMENTLOVELY PROFESSIONAL UNIVERSITYPHAGWARA(2007-09)
 
HEDGING TECHNIQUES IN MUTUAL FUNDS
OBJECTIVES OF THE STUDY
The purpose of this study is to examine the effectiveness of hedging mutual fund returnsusing Index Futures Contracts. Additionally, the study allows understanding the variousissues, such as
1
. To study, how hedging techniques reduces the risk in investment.
2
. To study the application of derivatives in Mutual funds.
3.
To comparison of before and after returns of hedging funds.Lovely Professional University22
 
HEDGING TECHNIQUES IN MUTUAL FUNDS
\RESEARCH METHODOLOGY
Since the objective is to analyze the effectives of hedging in mutual funds, the datarequired is the fact sheet of the mutual fund for the relevant period. Further, from the usewebsite, the relevant details of derivatives contract were captured.
DATA COLLECTION
There was one method for the data collection:
Secondary DataThe mechanism involved in secondary data collection, mainly browsing through adequate journal (related to mutual funds and derivatives), collection of fact sheet of the mutualfund from the AMC, web portals, & books etc.Quantitative analysis required ascertaining the returns of the mutual funds for the certain period and then for same period calculated the hedged returns. Thus, compared both thereturns to arrive at better results.
METHODOLOGY
Mutual Funds: This study uses the daily returns of mutual funds such as FranklinBluechip Fund, Franklin Infotech Fund and Franklin Prima fund. The entire funds takenare growth funds. Daily NAV data was obtained from Association of Mutual Funds inIndia and computed daily returns from this data. After this, I used Chi-Square test to check that Is the Mutual Funds returns are equal tohedging returns or not ? By this I come to know how hedging returns are reduced the risk and also comparison of before and after hedging returns.Lovely Professional University33

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