Professional Documents
Culture Documents
NIDA REPORT Fi
NIDA REPORT Fi
A
SUMMER TRAINING PROJECT REPORT
ON
“ANALYSIS OF INVESTMENT PATTERN ON THE BASIS OF
RISK PROFILE OF INVESTORS”
WITH SPECIAL REFERENCE TO
SUBMITTED IN
THE PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE OF
2
CERTIFICATE
This is to certify that the project work done on “Analysis of Investment Pattern on the
basis of Risk Profile of Investors” in Sharekhan Ltd. submitted to STEP-HBTI, Kanpur
(U.P.) by NIDA PARVEEN Roll No-1718170030in partial fulfilment of the requirement for
the award of degree of Master of Business Administration is an original work carried out by
him under my supervision and guidance.
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.
…………………………
(Ms. Rashi Saxena)
Assistant Professor.
3
DECLARATION
I, NIDA PARVEEN confirm that the work embodied in this project report is my own original
work carried out by me under the supervision of Ms.Rashi Saxena at STEP- HBTI, Kanpur
affiliated to Dr.A.P.J. Kalam Technical University.
The matter embodied in this project report has not been submitted for the award of any
degree.
I declare that I have faithfully acknowledged, given credit to and referred to the research
workers wherever their works have been cited in the text and the body of the project report. I
further confirm that I have not will fully lifted up some other’s work, para, text, data, results,
etc. reported in the journals, books, magazines, reports, dissertations, theses, etc., or available
at web-sites and included them in this project report and cited as my own work.
Institute can used my research/project work for any purpose.
4
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. Sudhir Nigam (territory manager) SHAREKHAN LTD, for his
support and guidance during the survey.
I am very thankful to Ms.Rashi Saxena, Assistant Professor STEP-HBTI Kanpur, for the
guidance and interest evinced throughout the preparation of this project.
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.
5
PREFACE
This present Project report is an image of what I have done and observed during my
research project in SHAREKHAN LTD in Kanpur main branch.
I was assigned a research project “Analysis of Investment Pattern on the basis of Risk
Profile of Investors”.
This report is the result of the work done during the market survey period.
I have tried my level best to be as a systematic as possible and to avoid any sort of business.
6
TABLE OF CONTENT
2 Introduction of topic 8 - 12
3 Introduction of Company 12 - 43
5 Research methodology 46 - 48
8 Bibliography 86 - 86
9 Questionnaires 87 - 89
7
8
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 analysing 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 behaviour 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.
After analysing 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 analysing the data
we used chi- square and phi-Cramer V test in SPSS V 19.0 and use MS Excel 2007 for
making graphs.
9
10
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
Systematic risk
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.
When it comes to investing one has to choose an asset class that suits the individual’s
risk and return temperament.
An asset class is a category of investment with particular risk and return
characteristics. The following are some of the popular assets class...
1. Fixed income instruments
2. Equity
3. Real estate
4. Commodities (precious metals
11
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?
12
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 you’re
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
13
employment is unstable you will need to take this in to account when setting your investment
goals.
14
Risk Profile Investment Style
15
16
SHAREKHAN LIMITED
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.
Sharekhan is the largest standalone retail brokerage in the country and the third largest in
terms of customer base after ICICI Direct and HDFC Securities. Sharekhan is one of the
pioneers of online trading in India. It offers a broad range of financial products and services
including securities brokerage, mutual fund distribution, loan against shares, ESOP financing,
IPO financing and wealth management.
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.
17
Sharekhan was founded by Mumbai-based entrepreneur Shripal Morakhia in 2000.
Sharekhan pioneered the online retail broking industry and leveraged on the first wave of
digitization, when dematerialization (demat) of securities came into effect and electronic
trading was introduced in the stock exchanges.
In India, Sharekhan has over 4800+ employees, and is present in over 575 cities through 153
branches, more than 2,500 business partners. The company has 1.4 million customer base and
on an average, executes more than 4 lakh trades per day.
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 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 calibre 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.
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.
Sharekhan’s ground network includes over 1005 centres 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,
18
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.
19
Sharekhan Offerings
Sharekhan Classroom
Ways to Trade
Equity - IPO
Equity – Intraday and Delivery
Derivatives – Futures and Options
Exchange Traded Fund
Commodity Futures and Options
Currency Futures and Options
Mutual fund – SIP, Lump sum and Tax Saving Funds
Power Portfolio – Centralized Execution of Trades
Portfolio Management Service – Wealth Optimizer
Ignite – Professional Technical Analysis Training
Loan Against Shares
Research
20
Sharekhan Classroom
One of the best ways to learn to be a self-trader in the markets is to sign up for Sharekhan
Classroom. Through a series of FREE ONLINE Trainings, Classroom trains you on various
Trading/Investing strategies & Sharekhan products in all major asset classes. Please select the
desired Module/Category in order to register for the live training of your choice.
4 Demo on Website
7 Intraday Trading
8 Options Trading
21
Ways to Trade
Mobile App, Trade Tiger, Sharekhanmini, Website, and Call N Trade
1. Mobile App
You can trade through APPs. This facility is available on android and IPhone
2. Trade Tiger
If you are an Active Trader, use the trade tiger terminal and get the power of broker’s
terminal to your desktop.
3. Sharekhanmini
Low bandwidth mobile browser based trading platform which can be accessed on any mobile
device using basic internet plan.
4. Website
5. Call N Trade
Call the sharekhan shop or the toll-free number and place the order.
22
Equity - IPO
An initial public offering, or IPO, is the very first sale of stock issued by a company to the
public. Prior to an IPO the company is considered private, with a relatively small number of
shareholders made up primarily of early investors such as the founders, their families and
friends and professional investors such as venture capitalists or angel investors. The public,
On the other hand, consists of everybody else – any individual or institutional investor. Public
companies, on the other hand, have sold at least a portion of their shares to the public to be
traded on a stock exchange. This is why an IPO is also referred to as "going public."
You can invest through online or offline in both the cases you need to have Demat account;
Trading is not a mandate unless if you wish to sell the stock.
Making payments has become easy for investors as SEBI has made the use of ASBA
(application supported by blocked amount) compulsory for all categories of investors. For
investors, use of ASBA entails just writing their bank account numbers and authorising the
banks to make payment in case of allotment by signing the application forms. For investors,
the benefit arises from the fact that their account is debited only to the extent of the amount
for which they have been allotted shares. As a result issuing companies need not process
refunds.
Online
Login in to bank account and select IPO application and fill in the details. Lien for the said
amount gets created.
Offline
Collect the application from next-door broker or use sharekhan pre-printed forms which
comes to your email id , Fill in the details and submit the same to broker.
Usually IPO will be for three working days within which you have to apply.
The time taken for listing of public issues after it has closed for subscription will be six
days.
23
On Last day if IPO forms are submitted in offline mode need to submit in share shop
before 11:00AM
Intraday
The meaning of Intraday trading is day trading. In intraday trading traders close’s all his
positions before closing of the share Market. There are two ways you can do intraday in
market
Go Long: Buy First and then Sell (Done when stock is expected to go up)
Go Short / Short Sell: Sell fist and then buy (Done when stock is expected to go down)
Note on Short sell: Position has to be squared of the same day if not will go for auction on
T+2 Day.
Benefits of Intraday Trading (day trading)
Delivery:
In India, “Delivery Trading” stands for taking or giving delivery of Shares in the Demat
Account. A Delivery trade happens when a trader buys or sell shares and does not square off
24
the position on the same day. These transactions are settled as per the T+2 settlement cycles
of the exchanges.
Sharekhan provides leverage on scrip for delivery form one time to six times.
Leverage on stock depends on scrip. ( Vary from Scrip to Scrip )
In case your account runs into a debit balance from T+2 Day you would be liable to pay
delay –in-paying charges (Interest) @18% p.a. Also note that the shares held by you
would be auto squared off in case of non-payment of dues on timely basis. For further
details on Auto Square Off.
Buy Today Sell Tomorrow can be done with an element of risk.
For risk involved in BTST plus read rolling settlement in
https://www.nseindia.com/products/content/equities/equities/settlement_cycle.htm
Additional Features:
Bracket order is a feature for the users whereby the user can limit their loss and lock-in a
profit by 'bracketing' an order with two opposite-side orders. A Buy order is bracketed by a
high-side sell limit order and a low-side sell stop order. A Sell order is bracketed by a high-
side buy stop order and a low-side buy limit order. The order quantity for the high- and low-
side bracket orders matches the original order quantity.
Trailing stop-loss order is a feature for the users whereby the user will be able to place a stop-
loss order, which can be trailed to maintain the precise price below or above the market price.
This stop-loss order will be adjusted continuously on the basis of fluctuations in the market
25
price, thereby maintaining the same price below or above the market price. This is called as
trailing stop-loss order.
Eg: Assuming Stock price is trading at Rs 101. Once stock is bought at 100 if you want stop-
loss to start trailing from 100.50 then
MY GTD
MYGTD is an order which you can place buy and sell Limit orders in scrips of your choice
specifying the period for which you want the order instruction to be valid. The period
selected by you should be within the maximum validity date defined by Sharekhan Ltd.
A capital gain refers to profit that results from a sale of a capital asset. In Sharekhan we have
a detailed capital gain report which helps you understand the Profit/ loss in each transaction.
Under capital gain report, your portfolio is divided into long term and short term or
speculation, purely on the basis of the holding period and corporate actions during the
holding period are not considered. Presently these reports are provided for Equities and
Bonds only.
26
o Mimimum Brok of Rs 16/- per transaction only on delivery based selling
o For penny stocks minimum paisa brokerage will be applicable.
Futures and options represent two of the most common form of "Derivatives". Derivatives are
financial instruments that derive their value from an 'underlying'.
1. Futures
A futures contract is an agreement between two parties to buy or sell an asset at a certain time
in the future at a certain price. Such an agreement works for those who do not have the
money to buy the contract now but can bring it in at a certain date. These contracts are mostly
used for arbitrage by traders. The obligation is on both the buyer and the seller to execute the
contract at a certain date. Futures contracts are special types of forward contracts. They are
standardized exchange-traded contracts like futures of the Nifty index.
Features of Futures:
You can buy/sell the contract and square off any time before the expiry of the contract.
All contracts expire on last Thursday of the month.
You need maintain the Margin specified and also MTM to maintain the contract through
out the month.
Futures are marked to market (settled) everyday. Therefore, you’re credited/debited at the
end of everyday according to the market price of the contract you bought/short.
Futures contract can be squared of anytime during the contract.
Future contract are available for maximum of three months. Client can enter any month
contract and square off till the last Thursday of the contract month he has entered.
On the last day if the position is not squared off, it will get settled based on the prevailing
market price. (Called as settlement price decided by the exchange)
27
Big Trade Plus (BTP) Order is an order placement facility offered by Sharekhan wherein
any market order can be placed along with a Stop Loss Order. BTP order allows the client
to take leverage as per his / her risk appetite along with the benefit to limit the downside.
One can take an intra-day position with such orders which blocks lesser margin than other
product.
BTP orders can be placed from opening of the market at 9.15 AM till 3.30 PM.
BTP order facility would require the clients to place a minimum of 2 leg order i.e. a buy /
sell order (First Leg) along with a stop loss order (Second Leg). The client may at their
sole discretion place a third leg (Third Leg) of the order to book profit at desired rate.
The First Leg of the order shall have to be a market order only. This should be
accompanied by a Second leg stop loss order.
Stop Loss Order cannot be cancelled and will remain pending till trigger price is not
reached. As soon as the Last traded price reaches the trigger price, the order would be
converted as market order and will be executed at the then prevailing market rate.
The Client acknowledges that in case the Second Leg / Third leg of the order is not
executed till 3.15 PM or such other time that Sharekhan may, at its sole discretion decide,
Sharekhan shall endeavour to square off the open position. In case the said position is not
squared off before closure of the market, the position shall be carried forward to the next
day. In such cases the client shall be responsible for ensuring that adequate margins are
available in the clients account with Sharekhan in order to ensure that there is not
shortfall in the account. In case there is a margin shortfall, the positions may be squared
off based on the risk management policy of Sharekhan.
Please read terms and conditions before trading in Big Trade Plus
2. Options
An Option gives the buyer the right but not the obligation. As a buyer, you may choose to let
the option to buy call or put option lapse. The seller has an obligation to comply with the
contract. In the case of a futures contract, there is an obligation on the part of both the buyer
and the seller.
Calls give the buyer the right, but not the obligation to buy a given quantity of the
underlying asset, at a given price on or before a given future date.
Puts give the buyer the right, but not the obligation to sell a given quantity of underlying
asset at a given price on or before a given future date.
28
Features of Options
Client has to pay the premium for buying the call/put option.
Client can square off the options any time before the contract gets expired.
Three month contract are available in options also and client has to square off the position
before the last Thursday of the contract. Maximum liquidity is available in the current
month contract.
Maximum loss for the client when you buy a Call/Put is to the extent of the premium
paid.
An ETF is an exchange-traded fund. For simplicity's sake, you can think of it as a mutual
fund that trades like a stock. An ETF is bought and sold on an intraday securities exchange
and is composed of a basket of securities. The primary differences is that an ETF can be
traded throughout the day like a stock, whereas a mutual fund can only be bought or sold at
the end of the day's Net Asset Value (NAV).
Can easily be bought / sold like any other stock on the exchange through terminals across
the country.
Can be bought / sold anytime during market hours at a price close to the actual NAV of
the Scheme.
No separate form filling. Just a phone call to your broker or a click on the net.
Ability to put limit orders.
Minimum investment is one unit.
Enjoy flexibility of a stock and diversification of index fund.
Expense Ratio is lower.
Few ETF
Nifty BeES
Gold BeES
CPSE Exchange Traded Fund
Reliance Gold BeES
SBI – ETF Niftybank
29
30
Commodity Futures and Options
There are two major stock exchanges in India MCX and NCDEX. In commodity markets you
can trade only in futures except in Gold 1kg contract where options are also allowed.
Why Commodities
Commodity futures have extended timings from 10.00am to 11.30pm (11.55 during day
light saving)
Commodity futures are negatively correlated with stocks and bonds. The negative
correlation is stronger over longer holding periods.
Commodity futures perform better in periods of inflation. (Especially unexpected
inflation), when stock and bond returns generally disappoint.
Commodities diversify the cyclical variation in stock and bond
Diversified Portfolio
Price Transparency
Metal - Aluminium, Aluminium Mini, Copper, Copper Mini, Lead, Lead Mini, Nickel,
Nickel Mini, Zinc, Zinc Mini.
Bullion - Gold, Gold Mini, Gold Guinea, Gold Petal, Gold Petal (New Delhi), Gold
Global, Silver, Silver Mini, Silver Micro, Silver 1000.
Agro Commodities - Cardamom, Cotton, Crude Palm Oil, Kapas, Mentha Oil,
Castorseed, RBD Palmolien, Black Pepper.
Energy - Brent Crude Oil, Crude Oil, Crude Oil Mini, Natural Gas
31
Commodity Traded in NCDEX
32
2. Big Trade in Commodity:
Trading allowed only in MCX segment in approved scrips.
Leverage: Sharekhan Comtrade reserves the right to modify leverage from time to time
without any prior intimation based on prevailing market condition.
No orders will be processed under this product after 23:30 hours.
Trades executed under this product will be squared off either after 23:30 hours or in case
of erosion of margin blocked, by approximately 75% whichever is earlier.
Positions created through this product are compulsorily settled on intraday only. No
option is available to carry forward the positions taken through the product.
Please read the terms and conditions before trading in Big Trade.
NSE provides you a liquid, transparent market for foreign exchange risk management. The
contracts available to you are
33
Features of Currency Future
Details Eg on USD
Last Trading Day Two Working Days Prior to last business day of the
expiry month at 12:30 pm
Daily Settlement Price Last half an hour Weignted Avg Price
A mutual fund is not an alternative investment option to stocks and bonds, rather it pools the
money of several investors and invests this in stocks, bonds, money market instruments and
other types of securities. Each fund has an objective which is laid out in the fund's
prospectus, which is the legal document that contains information about the fund, its history,
its officers and its performance.
Mutual Fund works on Net Asset Value which is total asset value per unit of the fund and is
calculated by the AMC at the end of every business day. From this, all expenses are deducted
and the resultant value divided by the number of units in the fund is the fund’s NAV.
At the outset, there is a difference between the cash flows in case of lump sum investing, the
investor has money on hand that can be invested. Whereas in case of SIP, the investor may
not have lump sum on hand and may have regular surplus expected in future.
34
Some popular objectives of a mutual fund are –
Power Portfolio
Objective:
Create wealth through the power of Equity
Outperform Nifty Index by investing in quality stocks for long term
Key Feature:
Best 10 Stocks of the day
Long only balanced and concentrated portfolio
Quality Companies backed with in depth research
Actively managed and monitored
Centralized Advice and Execution
Fully invested all the time
No lockin
35
Investment Universe
Recommended trades will be mailed / SMS to the client. Client can place and execute order
just by confirming from his email or replying code given in SMS via registered mobile
number to our number (Provided in SMS). The confirmation needs to be given only by the
customer.
Wealth Optimizer
This is a Portfolio management product of sharekhan with a minimum corpus of Rs. 25 Lacs
managed by the research department from head office.
Strategy
To identify undervalued growth stocks on the day of investment. Automated decision making
system performs fundamental analysis and assigns a fair value to each stock on the basis of
reported financial performance; stocks with higher scope to grow are selected.
Unique Features
36
Disciplined approach
Transparency
Key Benefits
You’re personal Trading Program by Online Trading Academy – Power your trading with a
Trade Tiger Terminal. A comprehensive one year mentoring program, Designed to move
your trading dramatically forward.
37
38
Ignite Process
Post Training
Controlled Personal
Foundation Trader Education Support and
Trades Trading Plan
Mentorship
>>> >>>
>>> >>>
Foundation
Preliminary Analysis and Profiling
Orientation and expectation setting
Trader Education
Certified Trading Professional a customized training program created especially for
sharekhan customers by online trading academy.
It will help to learn to think and act like an institutional or professional traders.
OTA market timing strategy identifies demand and support on the chart.
It will help to identify high probability trades
“What” “Where” and “When to buy and sell”
Program is imparted online with a duration of one month where there will be 24 sessions
with 2 hours class each.
Recorded session accessible for 48 Hours
Controlled Trades
Mentor will guide student to take 40 Controlled trades
Trades will be controlled and rule based
Proving that “Core strategy and rule bases approach works.
39
Post Training and Support
Be it new opportunities or sudden needs now there's a way to handle it all with ease. We at
sharekhan bring you loan against securities – a loan that will provide you the money you
need, while allowing to hold on to your securities.
40
Research
Sharekhan recommendation gets updated live on sharekhan website and trade tiger.
We have-
2. Stock Idea :
Time Frame : More than 3 Months
Sector wise recommendation with best stocks to be invested in each sector.
41
PROCESS OF ACCOUNT OPPENING
LEAD MANAGEMENT SYSTEM (LMS) / REFERENCES
CONTACT
APPOINTMENT
DEMONSTRATION
DOCUMANTATION
42
CHARGE STRUCTURE
1) - PRE PAID OR AMC A/C: -
Advance Amount which will be fully adjusted against your brokerage you paid
in One year.
We are having tie-up with eleven banks for online fund transferring 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.
Company Provide 4-6 E-mail to their customers per day.
Online Trade in Share
Sharekhan customers can online trade through their computers, through internet during the
market timings.
43
BRANCHES OF SHAREKHAN LTD. IN INDIA
44
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)
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.
45
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, and 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 individual’s 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 (1998) and Bemasek and Shwiff (2001) find that single men tend to be more risk
46
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.
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
47
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.
48
49
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.
50
51
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 in spite 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.
52
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.
53
54
1. To understand the risk profile of investors
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.
55
Question-2 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.
56
Question-3 If your investments were to fall in value by 15 per cent over a one-year
period, you will
CHART-3
57
Question-4 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.
58
Question-5 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.
59
Question-6 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.
60
Question-7 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.
61
Question-8 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.
62
2. To study risk bearing capacity on the basis of gender,
education, occupation, age, family income and number of
dependents.
To fulfil 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
Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square .797a 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.
63
Gender in respect of holding time of investment
X1 * X10 Cross tabulation
Count
X10
DAY WEEK MONTH YEAR Total
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 .656a 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.
64
Sample- Alternate Hypothesis
Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square 21.932a 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.
65
Education in respect of holding time period for investment
X4 * X10 Cross tabulation
Count
X10
DAY WEEK MONTH YEAR Total
X4 UNDER 1 1 3 10 15
GRADUATE
GRADUATE 14 15 5 17 51
POST 6 7 9 4 26
GRADUATE
PH.D. 1 2 1 0 4
Total 22 25 18 31 96
Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square 20.330a 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 colour who gives
the best alternative hypothesis value. Then after interpret that value which is come under that
yellow box and show their cross tabs.
66
67
TABLE-1
S.NO. QUESTIONS GENDER OCCUPATION AGE
Pearson Significance Pearson Significance Pearson Significance
chi-square chi-square chi-square
1 What do you expect when 0.797 0.85 9.131 0.425 8.871 0.449
you invest?
2 How long do you normally 0.656 0.883 5.669 0.773 4.203 0.898
hold investments?
4 You are ready for limited 6.266 0.18 17.361 0.137 9.682 0.644
losses in expectation of
higher long-term returns?
68
S.NO. QUESTIONS EDUCATION INCOME NO. OF
DEPENDENTS IN
FAMILY
Pearson Significance Pearson Significance Pearson Significance
chi-square chi-square chi-square
1 What do you expect when 8.854 0.451 12.718 0.176 10.880 0.539
you invest?
2 How long do you normally 20.330 0.016 7.112 0.625 10.015 0.615
hold investments?
4 You are ready for limited 28.133 0.005 21.667 0.041 26.948 0.042
losses in expectation of
higher long-term returns?
69
S.NO. QUESTIONS FAMILY INCOME PERCENTAGE OF
TOTAL INVESTMENT
Pearson chi-square Significance Pearson chi-square Significance
4 You are ready for limited losses 21.371 0.006 15.920 0.044
in expectation of higher long-
term returns?
70
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 Cross tabulation
Count
X9
NO NOMINAL MODERATE HIGER Total
RISK RISK RISK RISK
X7 <5 LAKH 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
71
Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square 21.932a 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 0.478 0.001
Cramer’s V 0.338 0.001
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.
72
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
73
Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square 20.330a 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 0.460 0.016
Cramer’s V 0.266 0.016
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.
74
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 groups 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, 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.
75
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 UNDER 3 7 2 1 2 15
GRADUATE
GRADUATE 8 8 17 17 1 51
POST 3 1 4 15 3 26
GRADUATE
PH.D. 0 0 1 3 0 4
Total 14 16 24 36 6 96
76
Chi-Square Tests
Value Df Asymp. Sig.
(2-sided)
Pearson Chi-Square 28.133a 12 0.005
Likelihood Ratio 29.565 12 0.003
Linear-by-Linear Association 10.020 1 0.002
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 0.541 0.005
Cramer’s V 0.313 0.005
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.
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
77
lies between the education level groups 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.
78
Income in respect of 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 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 returns
X5 * X12 Cross tabulation
Count
X12
Total
STRONGLY DISAGREE NEITHER AGREE STRONGY
DISAGREE AGREE AGREE
NOR
DISAGREE
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
79
Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
Pearson Chi-Square 21.667a 12 0.041
Likelihood Ratio 14.983 12 0.242
Linear-by-Linear Association 0.978 1 0.323
N of Valid Cases 96
a. 11 cells (55.0%) have expected count less than 5. The minimum expected count is 0.06.
Symmetric Measures
Value Approx. Sig.
Nominal by Nominal Phi 0.475 0.041
Cramer’s V 0.274 0.041
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.
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
80
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 respect of limited losses in expectation of higher long
term returns)
X6 * X12 Cross tabulation
Count
X12
Total
STRONGLY DISAGREE NEITHER AGREE STRONGY
DISAGREE AGREE AGREE
NOR
DISAGREE
X6 NO 1 0 0 3 1 5
DEPENDENT
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
81
Chi-Square Tests
Value Df Asymp. Sig.
(2-sided)
Pearson Chi-Square 26.948a 16 0.042
Likelihood Ratio 25.934 16 0.055
Linear-by-Linear Association 0.233 1 0.629
N of Valid Cases 96
a. 19 cells (75.0%) have expected count less than 5. The minimum expected count is 0.19.
Symmetric Measures
Value Approx. Sig.
Nominal by Nominal Phi 0.530 0.042
Cramer’s V 0.265 0.042
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.
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
82
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.
83
Family income in respect of 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 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 returns)
X7 * X12 Cross tabulation
Count
X12
Total
STRONGLY DISAGREE NEITHER AGREE STRONGY
DISAGREE AGREE AGREE
NOR
DISAGREE
X7 < 5 LAKH 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
84
Chi-Square Tests
Value Df Asymp. Sig.
(2-sided)
Pearson Chi-Square 21.371a 8 0.006
Likelihood Ratio 15.805 8 0.045
Linear-by-Linear Association 3.687 1 0.055
N of Valid Cases 96
a. 7 cells (46.7%) have expected count less than 5. The minimum expected count is 0.25.
Symmetric Measures
Value Approx. Sig.
Nominal by Nominal Phi 0.472 0.006
Cramer’s V 0.334 0.006
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.
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
85
in expectation of higher returns. In the chart it is shown that out of 49 respondents who lies
between the family income level groups 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.
86
Percentage of total investment in respect of limited losses in
expectation of 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 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
returns)
X8 * X12 Cross tabulation
Count
X12
Total
STRONGLY DISAGREE NEITHER AGREE STRONGY
DISAGREE AGREE AGREE
NOR
DISAGREE
X8 BELOW 6 11 20 14 2 53
20%
20%-40% 8 5 4 21 4 42
40%-60% 0 0 0 1 0 1
Total 14 16 24 36 6 96
87
Chi-Square Tests
Value Df Asymp. Sig.
(2-sided)
Pearson Chi-Square 15.920a 8 0.044
Likelihood Ratio 17.029 8 0.030
Linear-by-Linear Association 1.860 1 0.173
N of Valid Cases 96
a. 7 cells (46.7%) have expected count less than 5. The minimum expected count is 0.06.
Symmetric Measures
Value Approx. Sig.
Nominal by Nominal Phi 0.407 0.044
Cramer’s V 0.288 0.044
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
88
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 0.288.
89
90
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 given their opinion in the favour 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 favour 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.
91
BIBLOGRAPHY
www.sharekhan.com
www.google.com
www.wikipedia.com
www.valueresearchonline.com
www.moneycontrol.com
https://finance.google.com
https://in.finance.yahoo.com
www.way2wealth.com
www.investopedia.com
92
QUESTIONNAIRES
Personal Information
1. Gender
a) Male b) Female
2. Occupation
i) Business ii) 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
93
The risk-profile questionnaire
1. What do you expect when you invest?
a) no risk
b) nominal risk
c) moderate risk
d) higher risk
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
94
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
95
96