1.

CASE STUDY ANALYSIS

Mr. Nirmal has been very prudent in saving funds and has made several investments through shares
post office deposits , residential house , endowment policy .

He wants to use his retirement benefits sum to purchase an apartment and enjoy return in the form of
rent from the tenants. Investment in an apartment for commercial purpose is a very safe option in case
the Mr. Nirmal’s willingness to take risk is very low(risk averse), since the amount of risk is less in future
returns in terms of capital appreciation may also be less because buildings are subject to depreciation
and their value only deteriorates over time.

Primary options available are firstly bank deposit is an low return, low risk but highly liquid and
convenient option as money can be withdrawn anytime and cash is the most liquid asset and returns
would be the interest earned on the deposit over the period of time.Bonds is a stable and low risk way
of diversifying the portfolio. Bonds are issued by the government and public institutions with a fixed rate
of interest, highly marketable and liquid.

Investments in money market instruments can act as a substitute for cash and is highly liquid and deals
in short term instruments and hence can be sold and converted into cash at any time. However, the
returns range from moderate to low.

Investment in company deposits also is a notable option as the rate of return is higher than the interest
provided on bank deposits. However, investment should be made in creditworthy companies.
Investment in non-convertible debentures can earn high returns with low risk and average liquidity.

Despite of the available investment options, Mr. Nirmal can always choose to invest in a combination of
2 or more investment avenues depending on the amount of risk he is willing to take, the liquidity
position he wishes to have and so on.

2
A liquid asset is either available cash or an instrument that has the capacity to be easily converted to
cash. A Liquid Investment will be value shares, as these can be promptly exchanged the auxiliary market
whenever.

Illiquid assets may also be hard to sell quickly because of a lack of ready and willing investors or
speculators to purchase the asset. An Illiquid investment will be investment in real estate as real estate
can't be promptly be undercuts in a timeframe and contains a ton of administrative work, and so on
simultaneously.

3
 a. Investment objective for a speculation for a long time could be wealth creation,
setting aside cash with moderate development for a particular reason, and so on.
b. The size of assets put resources into the market relies upon each individual's
capital accessibility and there is no capital on any base or greatest sum that can
be contributed.

c. Investment vehicles are the different methods by which we can contribute

capital, in India these can be shares, common assets, fixed stores, repeating
stores, PPFs, and so forth the portfolio ought to consistently be broadened
among vehicles of various dangers to make the portfolio less hazardous to
ensure the capital.

d. Important speculation vehicles would be Shares, Mutual assets, and PPFs, as I

will be working for a long time to come and might want a decently unsafe
portfolio for additional increases when contrasted with putting resources into
generally safe protections, for example, FDs and PPFs alone.

e. Variables that would be basic for investment choice are people hazard taking
ability (low, moderate or high) and furthermore the people chance craving.
Another factor is the measure of capital accessible for venture, for somebody
like me who will begin working from one year from now, speculation capital
would almost certainly be low. Another factor to consider would be an
individual's necessity of cash. In light of how soon the individual needs returns,
they will choose the time skyline of their speculation portfolio.

ANUGRAHA VASAN
5BCOMP A
1812560