Poject Sequence

“A Study of Traditional and Modern Modes of Investment
Avenues”
A Dissertation Submitted By
Miss.Samruddhi S. Malani
(Specialization: - Finance)
(MBA Programme 2017 - 2019)
Under the Guidance of
Prof. Ritesh D. Chandak

(B.Com, L.L.B., P.G.D.M)
To
SANT GADGE BABA AMRAVATI UNIVERSITY, AMRAVATI
In Partial Fulfillment of the Requirements

For the Award of Degree of
MASTER OF BUSINESS ADMINISTRATION
Department of Management
College Of Management and Computer Science,
Yavatmal – (445-001)
COLLEGE OF MANAGEMENT AND COMPUTER SCIENCE
DEPARTMENT OF MANAGEMENT
YAVATMAL-445001
TEL: - 07232-255575/255595 Website: - www.hjes.in
Certificate
This is to certify that the Dissertation entitled “A Study of Traditional and Modern
Modes of Investment Avenues”
Submitted By
Miss. Samruddhi S. Malani
In partial fulfillment of the conditions for the award of degree of Masters of Business
Administration to Sant Gadge Baba Amravati University, Amravati has been prepared
under Supervision and Guidance of Prof. Ritesh Chandak. It is also certified that:-
1. The candidate has satisfactorily conducted this research for not less than one
academic year
2. The dissertation is of sufficiently high standard to warrant its presentation for
examination.
Prof. Ritesh Chandak Prof. Ritesh Chandak Prof. Ritesh Chandak
(Principal) (HOD, MBA Dept) (Project Guide)
Date:-
Place:-Yavatmal
Declaration
I Miss. Samruddhi Sunil Malani hereby declare that the dissertation entitled, “A Study
of Traditional and Modern Modes of Investment Avenues” is the result of my own
research work and that the same name has not been previously submitted to any
examination of this or any other university.
Date: Samruddhi S. Malani
Place: Yavatmal MBA II

Acknowledgement
Completing a task is never alone journey. It is often the result of valuable contribution
from a number of individuals in every possible way, which ultimately helps in
achieving the objectives.
My sincere gratitude to all Mr. Sohel Khan (Manager of Khandelwal Jewellers,

Yavatmal), Sau. V. A. Agrawal (Manager of Washim Urban Co-operative Bank,
Yavatmal), Mrs. Dharmik (Manager of Post Office, Yavatmal), Mr. Vicky Sharma
(Manager of Angel Broking, Yavatmal) and Mrs. Gupta (Manager of Bajaj Allience,
Yavatmal) for their co-operation. I also thank all the employees for their co-operation
in successful completion of my project.
Indeed a great pleasure and amount of immense satisfaction for me to express my

profound gratitude towards my Academic Guide, Prof. Ritesh D. Chandak. I would
like to thank him for his kind support and giving me the opportunity to present this
project.
I take pride in thanking my family and friends for their suggestions and constructive
criticisms, right from the inception of this project to its successful completion.
I also thankful to honorable Principal Ritesh D. Chandak, President Mr. Prakashji

H. Jajoo, Secretary Mr. Ashishji P. Jajoo whose encouragement, moral support and
valuable guidance, which has been source of inspiration to me.
Samruddhi S. Malani Prof. Ritesh Chandak
MBA- II Year Project Guide

INDEX
Sr. No. Contents Page No.
1. Introduction 1
1.1 Introduction
1.2 Meaning and Definition
1.3 Why Invest?
1.4 Features of Investment
1.5 Asset Class
2. Review of Literature 34
3. Research Methodology 35
3.1 Introduction
3.2 Tools of data Collection:
3.3 Sample Area
3.4 Span of the study
3.5 Sample of size
3.6 Research Objective
3.7 Research Scope
3.8 Hypothesis of Study
3.9 Limitations of Study
4. Company Profile 39
4.1 Traditional Investment
4.2 Modern Investment
5. Data Analysis, Interpretation and Findings 41

5.1 Data Analysis & Interpretation
5.2 Findings
5.3 Hypothesis Testing
6. Conclusion and Recommendations 67
7.1 Conclusion
7.2 Suggestions & Recommendations
7. Appendices 69
7.1 Questionnaire
7.2 Bibliography
List of Figure
Sr. No. Figures Name Page No.
1. Need of Investment 3
2. 1 Year Gold Prices in Indian Rupees 8
3. Public Provident Fund Interest Rate 10
4. Government of India Saving Bonds Interest Rate 16
5. Types of Mutual Funds 21
6. Issues of Shares 23
7. Types of Shares 24
8. Money Market Instrument 27
9. Money Market Fund 28

List of Table
Sr. No. Table Name Page No.
1. Know about Investment 41
2. Percentage of annual income 42
3. Aware of Investment Mode 43
4. Time period prefer to Invest 44
5. Factors before Investing 45
6. Sectors to Invest Money 46
7. Better Option of Investment 47
8. Schemes that people have Invest 48
9. Reason for Investing in Fixed Deposit Account 49
10. Saving Objective 50
11. Risk of losing Principal Investment Amount 51
12. Satisfied with the return from which mode of 52

Investment
13. Money Invest in Share Market 53
14. Money Invest in Real Estate 54
15. Investing in Gold 55
16. Investing in Debenture 56

17. Investment Rate to Grow 57
18. Monitor Investment 58
19. Different Source of Information 59
20. Satisfied with Suggestion Given by bank relating to 60

Investment
21. Year Use Investment Facilities 61

List of Graphs
Sr. No. Graph Name Page No.
1. Data Shows Know about Investment 41
2. Data Shows Percentage of annual income 42
3. Data Shows Aware of Investment Mode 43
4. Data Shows Time period prefer to Invest 44
5. Data Shows Factors before Investing 45
6. Data Shows Sectors to Invest Money 46
7. Data Shows Better Option of Investment 47
8. Data Shows Schemes that people have Invest 48
9. Data Shows Reason for Investing in Fixed Deposit 49

Account
10. Data Shows Saving Objective 50
11. Data Shows Risk of losing Principal Investment 51

Amount
12. Data Shows Satisfied with the Return from which 52

mode of Investment
13. Data Shows Money Invest in Share Market 53
14. Data Shows Money Invest in Real Estate 54
15. Data Shows Investing in Gold 55

16. Data Shows Investing in Debenture 56
17. Data Shows Investment Rate to Grow 57
18. Data Shows Monitor Investment 58
19. Data Shows Different Source of Information 59
20. Data Shows Satisfied with Suggestion Given by bank 60

relating to Investment
21. Data Shows Year Use Investment Facilities 61

Executive Summary
Investment, in literal terms, implies redirecting resources from being consumed today so that
they may create benefits in the future. In the world of business, it implies „using your money
to buy different assets which may provide you an income or grow in its value over a period of
time‟. This basic concept of investing has been known to investors since several years.
However, as time passed, the different investment options grew and became more and more
developed and complicated.
This report studies the basic concept of “Investment”, its need and then looks at the different
investment avenues that have developed over the years. These investment avenues have been
essentially divided into “Traditional” forms of investment and the more recent and structured
“Modern” investments.
Traditional investments comprising of asset classes like gold, government bonds, fixed
deposits, insurance plan etc. have been studied, thus documenting their characteristics and
risk return profiles.
Similarly, Modern investment options which garnered much attention from institutional
investors and HNIs (High Network Individual‟s) in the past few years have been looked at
with a special focus on the following avenues i.e., Mutual Funds, Share, Money Market, SIP,
ULIP etc.
Considering the ongoing global financial crisis, the effectiveness of these different forms of
investment options have been studied with respect to their risk – return profiles and their
performance over the years.
Throughout the report, a strong emphasis has been laid on conceptual understanding of
different forms of investments so as to educate every investor and make him capable of
making a reasonable investment decision, thereby constructing a balanced “Investment
Portfolio” for himself as per his needs.
“A Study of Traditional and Modern Modes of Investment Avenues”
CHAPTER NO. 1
INTRODUCTION
1.1. Introduction
Investment is an asset or item acquired with the goal of generating income or

appreciation. In an economic sense, an investment is the purchase of goods that are
not consumed today but are used in the future to create wealth.
Investment is a conscious act of an individual or any entity that involves deployment

of money (cash) in securities or assets issued by any financial institution with a view
to obtain the target returns over a specified period of time.
Investment is a type of activity that is engaged in by the people who have to do

savings i.e. investments are made from their savings, or in other words it is the
people invest their savings. A variety of different investment options are available
that are bank, Gold, Real estate, post services, mutual funds & so on much more.
Investors are always investing their money with the different types of purpose and
objectives such as profit, security, appreciation, income stability.
In simple terms, Investment refers to purchase of financial assets. While Investment

goods are those goods, which are used for further production. Investment implies the
production of new capital goods, plants and equipments. John Keynes refers
investment as real investment and not financial investment. In finance, an investment
is a monetary asset purchased with the idea that the asset will provide income in the
future or will later be sold at a higher price for a profit.
The money we earn is partly spent and the rest saved for meeting future expenses.
Instead of keeping the savings idle we may like to use savings in order to get return
on it in the future. This is called Investment. An investment is the current
commitment of money for a period of time in order to derive future payments that
will compensate the investor for (1) the time the funds are committed, (2) the
expected rate of inflation, and (3) the uncertainty of the future payments.
College of Management and Computer Science, Yavatmal. Page 1

1.2. Meaning and Definition
Meaning:
An investment is an amount of money that you invest, or the thing that you invest it
in. Investment is the activity of investing money. Investment is the action or process
of investing money for profit.
Investment is a type of activity that is engaged in by the people who have to do

savings i.e. investments are made from their savings, or in other words it is the
people invest their savings. It also means savings or savings made through delayed
consumption. From an economic perspective, investment and saving are different;
saving is known as the total earnings that are not spent on consumption, whether
invested to achieve higher returns or not.
In finance, an investment is a monetary asset purchased with the idea that the asset
will provide income in the future or will later be sold at a higher price for a profit.
Definition:
Investment is defined as “the commitment of current financial resources in order to

achieve higher gains in the future”. It deals with what is called uncertainty domains.
From this definition, the importance of time and future arises as they are two
important elements in investment.
“Investment means the investing of money from an individual refers to a money

Commitment of some sort”.
“Investment means employment of funds with objective of achieving additional

income or growth in value of investment at a future date”

1.3. Why Invest?
Putting Your
Beating Money To Meeting
Inflation Work Goals
Saving For Generates

Retirement altenate
source of
income
Figure 1: Need of Investment
Needs of Investment:
One needs to invest to:
 Earn return on your idle resources.
 Generate a specified sum of money for a specific goal in life.
 Make a provision for an uncertain future.
One of the important reasons why one needs to invest wisely is to meet the cost of
Inflation. Inflation is the rate at which the cost of living increases. Inflation causes
money to lose value because it will not buy the same amount of a good or a service in
the future as it does now or did in the past. For example, if there was a 6% inflation
rate for the next 20 years, a Rs. 100 purchase today would cost Rs. 321 in 20 years.
This is why it is important to consider inflation as a factor in any long-term
investment strategy. Remember to look at an investment's 'real' rate of return, which
is the return after inflation. The aim of investments should be to provide a return
above the inflation rate to ensure that the investment does not decrease in value. For
example, if the annual inflation rate is 6%, then the investment will need to earn more
than 6% to ensure it increases in value. If the after-tax return on your investment is
less than the inflation rate, then your assets have actually decreased in value; that is,
they won't buy as much today as they did last year.

1.4. Features of Investment
The features of economic and financial investments can be summarized as return,

risk, safety, liquidity, marketability and capital growth.
1. Return
Return expectation is the main objective of investment. Investors expect regularity of

high and consistent income for their capital. All investments are characterized by the
expectation of a return. In fact, investments are made with the primary objective of
deriving a return. The return may be received in the form of yield plus capital
appreciation. The difference between the sale price and the purchase price is capital
appreciation. The dividend or interest received from the investment is the yield. The
return from an investment depends upon the nature of the investment, the maturity
period and a host of other factors.
2. Risk
Risk refers to the loss of principal amount of an investment. It is one of the major
characteristics of an investment. Every investment contains certain portion of risk. It
is a key feature of investment which refers to loss of principal, delay in payment of
interest and capital etc. Most investors prefer to invest in less riskier securities.
The risk depends on the following factors:
 The investment maturity period is longer; in this case, investor will take larger
risk.
 Government or Semi Government bodies are issuing securities which have
less risk.
 In the case of the debt instrument or fixed deposit, the risk of investment is
less due to their secured and fixed interest payable on them
 The risk of degree of variability of returns is more in the case of ownership
capital compare to debt capital.
 The tax provisions would influence the return of risk.

3. Safety:
Safety refers to the protection of investor principal amount and expected rate of
return. Investors expect safety for their capital. They desire certainty of return and
protection of their investment or principal amount. Safety is also one of the essential
and crucial elements of investment. Investor prefers safety about his capital. Capital
is the certainty of return without loss of money or it will take time to retain it. If
investor prefers less risk securities, he chooses Government bonds. In the case,
investor prefers high rate of return investor will choose private Securities and Safety
of these securities is low.
4. Liquidity:
Liquidity refers to an investment ready to convert into cash position. Liquidity means
easily sale or convert the capital or investment into cash without any loss. So, most
investors prefer liquid investments. In other words, it is available immediately in
cash form. Liquidity means that investment is easily realizable, saleable or
marketable. When the liquidity is high, then the return may be low. An investor
generally prefers liquidity for his investments, safety of funds through a minimum
risk and maximization of return from an investment.
5. Marketability:
It is another feature of investment that they are marketable. It means buying and
selling or transferability of securities in the market. It means easy and quick means of
transferability of an asset. Thus, assets of listed companies and shares of public
limited companies are more easily transferable than those of non-listed companies
and private limited companies.
6. Capital Growth:
One of the important principles of investment is capital appreciation. A company

flourishes when the industry to which it belongs is sound. So, the investors, by
recognizing the connection between industry growth and capital appreciation should
invest in growth stocks. In short, right issue in the right industry should be bought at
the right time.

1.5 Asset Classes
Asset class refers to a set of related investment vehicles that have similar risk and
return characteristics. Different types of asset classes would include real estate,
shares, bonds debentures, public provident fund and money market. Thus we can
divide these in two basic kinds i.e. Traditional and Modern.
1.5.1 Traditional Mode of Investments or Traditional Asset Class
Traditional investment means options that are available in the industry since long and
now the attractiveness of those investment options have slowly been falling due to
their nature and the returns that are received from them. In today’s world the returns
expected by the people are more and in shorter period of time where as the returns
that are received from these traditional investments are less and over a longer period
of time.
The options available in traditional investment are:
 Gold
 Post Office savings
 Public Provident fund
 Bank Deposit
 Real Estate
 Government Of India Saving Bonds
 Insurance Plan

1.5.1.1. GOLD
Of all the precious metals, gold is the most popular as an investment. Investors
generally buy gold as a way of diversifying risk, especially through the use of futures
contracts and derivatives. The gold market is subject to speculation and volatility as
are other markets. Compared to other precious metals used for investment, gold has
the most effective safe haven and hedging properties across a number of countries. In
fact, gold has not been a good long-term investment.
Investors and speculators have bid gold prices up over the past year because they
consider it a safe haven amid worries about the credit crunch, slowing economy,
rising inflation and stock market volatility. Gold does well in times of financial
stress, inflation and when there is fear for currency.
Although gold is categorized as a commodity, it does not always behave like other
commodities such as oil or wheat, which run out and must be continually resupplied,
he says. Once mined and turned into jewellery, gold stays in the market. Hence, the
supply is continually growing, helping to explain why gold prices have not gone up
over the long term. Over the long term, gold has not been much of an inflation hedge
because it is not an inherently productive resource. Stocks generally do better against
inflation because companies raise prices when inflation goes up, and company assets
such as buildings and factories appreciate as well. Growing productivity also helps
stock prices keep ahead of inflation. No such factor supports gold prices.
In India, there is a sentimental value associated with gold. The yellow metal
symbolizes prosperity and wealth. Gold jewellery is so dear to Indian women that
they can’t enough of it. Since gold is an important part of auspicious celebrations,
the sale of gold increases drastically around Diwali. Gold rate changes every day.
Gold ornaments are quite popular in our country. The shopping for Indian weddings
is incomplete without gold. The best thing about gold is that it can be easily sold in
case there is a financial crunch.
While gold fascinates Indian women, it attracts investors as well. For investment
purposes, investors buy gold coins, gold bars, gold ETFs etc. Investment experts
recommend not buying gold jewellery for investment purposes. It is because when

gold jewellery is purchased; it attracts additional charges in the form of making

charges.
Today gold price is affected by various factors such as demand and supply, market
scenarios across the globe and the strength of US dollar etc. Additionally, the price
of gold differs in various cities across India as well. Various factors such as taxes,
demand, carriage, local associations etc. affect the gold price in different cities.
Welcome to the Gold Rate in India per Gram in (Mumbai, Kolkata, Delhi). Current
price in Indian rupee of 24k, 23k, 22k, 21k, 18k gold in Kolkata (Asia) time
(GMT+05:30). Gram in IN is a standard unit for measuring the precious metals.
Gold bullion bars are also measured in gram e.g., 1, 5, 10, 20, 50, and 100 grams.
While the 10-gram gold bullion bar is the most common. The gold utility in India is
popular and its Jewellery is used for different events (e.g., wedding and
engagements) in many designs e.g., Bracelet, Necklace, Bangles, Chains, and
Dresses. They can be bought in INR. Today (on 24 March, 2019) the Gold Price per
Gram in India = 2919.94 INR.
Figure 2: 1 Year Gold Prices in Indian Rupees

1.5.1.2. POST OFFICE SAVINGS
The post office savings account is a deposit scheme provided by the post office
departments throughout India, which provides a fixed interest rate. It is a beneficial
scheme for individual investors who wish to earn a fixed rate of interest by investing
a significant portion of their financial assets.
Post office savings account is also a very helpful scheme for those residing in rural
parts of India. Since the nationwide reach of post offices is much greater compared to
banks, a large number of undeserved people have been able to get access to savings
accounts through post offices.
Post Office savings scheme has been one of the most important saving funds in our
country. People have been investing in this since long especially in the rural areas of
the country where the facility of banks are not available. Post office saving are
considered to be safe as it is similar to investing in the government securities where
there cannot be a default due to any reason by the government.
The central government decides the interest rates on the post office savings account.
Mostly it is same as that of the banks which is around 4% and it is calculated every
month. According to the income tax regulations, if a post office savings account
holder generates returns lower than Rs. 10,000 a year through interest, then it is tax-
free.
Steps to open account:
1. Get a form from the nearest post office or online.

2. Fill up the form and submit it along with the necessary KYC documents and a
photograph.
3. Pay the amount that you wish to deposit, which should not be less than Rs. 20.
4. In case you wish to open a post office savings account without cheque book,
then the minimum deposit amount required is Rs. 50.
5. Separate forms are available for senior citizens.
6. Once you pay the amount, your savings account will be generated.

1.5.1.3. PUBLIC PROVIDENT FUND
The Public Provident Fund is a savings-cum-tax-saving instrument

in India, introduced by the National Savings Institute of the Ministry of Finance in
1968. The aim of the scheme is to mobilize small savings by offering an investment
with reasonable returns combined with income tax benefits. The scheme is fully
guaranteed by the Central Government. Balance in PPF account is not subject to
attachment under any order or decree of court. However, Income Tax & other
Government authorities can attach the account for recovering tax dues.
A minimum yearly deposit of ₹500 is required to open and maintain a PPF account.
A PPF account holder can deposit a maximum of ₹1.5 lacs in his/her PPF account
(including those accounts where he is the guardian) per financial year. There must be
a guardian for PPF accounts opened in the name of minor children. Parents can act as
guardians in such PPF accounts of minor children. Any amount deposited in excess
of ₹1.5 lacs in a financial year won't earn any interest. The amount can be deposited
in lump sum or in a maximum of 12 instalments per year. However, this does not
mean a single deposit once in a month.
The Ministry of Finance, Government of India announces the rate of interest for PPF
account every quarter. Interest will be paid on 31 March every year. Interest is
calculated on the lowest balance between the close of the fifth day and the last day of
every month.
Figure 3: Public Provident Fund Interest Rate

1.5.1.4. BANK DEPOSITS
Bank deposits consist of money placed into banking institutions for safekeeping.
Primarily, banks offer two kinds of deposit accounts. These are demand deposits like
current/saving account and term deposits like fixed or recurring deposits. When you
open a deposit account in a bank, you become an account holder or a depositor.
Saving accounts are used to meet daily on-demand requirements of cash. For
example, you hold a saving bank account with the bank having cheque book facility.
The bank asks you to maintain a minimum balance of Rs 1000. In return, the bank
pays you an interest at the rate of 4% per annum.
The deposit rates on saving account keeps changing based on RBI’s revision of
policy rates. Banks offer lower interest rates on saving account as compared to term
deposits. It is because of this reason, investors opt for term deposit accounts.
A term deposit account is used to hold money for a fixed period of time. In return for
this, the bank pays interest on the term deposits. However, you are not allowed to
withdraw your money before expiry of the fixed duration.
For example, you hold a fixed deposit (FD) of Rs 10,000 for a period of five years
with the bank. In return, the bank pays you an interest at the rate of 10% per annum.
Current Account/Demand Deposit Account
A current account, also called a demand deposit account, is a basic checking

account. Consumers deposit money which they can withdraw as desired on demand.
These accounts often allow the account holder to withdraw funds using bank cards,
checks or over-the-counter withdrawal slips. In some cases, banks charge monthly
fees for current accounts, but they may waive the fee if the account holder meets
other requirements such as setting up direct deposit or making a certain number of
monthly transfers to a savings account.
Savings Accounts
Savings accounts offer account holders interest on their deposits. However, in some
cases, account holders may incur a monthly fee if they do not maintain a set balance

or a certain number of deposits. Although savings accounts are not linked to paper
checks or cards like current accounts, their funds are relatively easy for account
holders to access. In contrast, money market accounts offer slightly higher interest
rates than savings accounts, but account holders face more limitations on the number
of checks or transfers they can make from these accounts.
Fixed Deposit
A fixed deposit (FD) is a financial instrument provided by banks or NBFCs which

provides investors a higher rate of interest than a regular savings account, until the
given maturity date. It may or may not require the creation of a separate account. It
is known as a term deposit or time deposit in Canada, Australia, New Zealand, and
the US, and as a bond in the United Kingdom and India. For a fixed deposit is that
the money cannot be withdrawn from the FD as compared to a recurring deposit or
a demand deposit before maturity. Some banks may offer additional services to FD
holders such as loans against FD certificates at competitive interest rates. It's
important to note that banks may offer lesser interest rates under uncertain economic
conditions. The interest rate varies between 4 and 7.25 percent. The tenure of an FD
can vary from 7, 15 or 45 days to 1.5 years and can be as high as 10 years. These
investments are safer than Post Office Schemes as they are covered by the Deposit
Insurance and Credit Guarantee Corporation (DICGC). However, DICGC guarantees
amount up to ₹ 10 per depositor per bank. They also offer income tax and wealth
tax benefits.
Recurring Deposit
Recurring Deposit is a special kind of Term Deposit offered by banks in India which
help people with regular incomes to deposit a fixed amount every month into their
Recurring Deposit account and earn interest at the rate applicable to Fixed Deposits.
It is similar to making FDs of a certain amount in monthly installments, for example
₹ 1000 every month. This deposit matures on a specific date in the future along with
all the deposits made every month. Thus, Recurring Deposit schemes allow
customers with an opportunity to build up their savings through regular monthly
deposits of fixed sum over a fixed period of time. Minimum Period of RD is 6
months and maximum is 10 years.

The Recurring Deposit can be funded by Standing instructions which are the
instructions by the customer to the bank to withdraw a certain sum of money from
his Savings/ Current account and debit to the Recurring Deposit account.
When the RD account is opened, the maturity value is indicated to the customer
assuming that the monthly installments will be paid regularly on due dates. If any
installments are delayed, the interest payable in the account will be reduced and will
not be sufficient to reach the maturity value. Therefore, the difference in interest will
be deducted from the maturity value as a penalty. The rate of penalty will be fixed
upfront. Interest is compounded on quarterly basis in recurring deposits.
One can avail loans against the collateral of Recurring deposit up to 80 to 90% of the
deposit value.
Rate of Interest offered is similar to that of Fixed Deposits. Earlier it seemed to be

one of the best methods to save the amount yield after years of deposit.

1.5.1.5. REAL ESTATE
The Real Estate sector is one of the most globally recognized sectors. Real estate
sector comprises four sub sectors - housing, retail, hospitality, and commercial. The
growth of this sector is well complemented by the growth of the corporate
environment and the demand for office space as well as urban and semi-urban
accommodations. The construction industry ranks third among the 14 major sectors
in terms of direct, indirect and induced effects in all sectors of the economy.
Real estate licenses, authorizations issued by state governments, give agents and
brokers the legal ability to represent a home seller or buyer in the process of buying
or selling real estate. Real estate agents and real estate brokers are required to be
licensed when conducting real estate transactions in the India and many other
countries.
Through a complicated arrangement, the National Association of Realtors (NAR), a

trade and lobbying group for agents and brokers, sets policies for most of the multiple
listing services. As the Internet gained widespread use in the late 1990s, NAR created
regulations allowing Information Data Exchanges (or Internet Data Exchanges)
(IDX) whereby brokers would allow a portion of their data, such as listings of homes
for sale, to be seen online via brokers' or agents' websites.
The association attempted to limit online access to some or all of that data,
particularly by brokers operating solely on the Internet. In 2005, the Department of
Justice brought an antitrust lawsuit against the NAR trade group. The complaint
accused the association of unfairly limiting access to the multiple listing service
(MLS), which effectively prevented online brokerages from competing with
traditional brick-and-mortar offices. The Justice Department accused the NAR of
conspiring to restrain trade.

1.5.1.6. GOVERNMENT OF INDIA SAVING BONDS
A government bond is an obligation instrument issued by the government of a nation

to fund government spending. It implies a debt owed by the government to the holder
of the bond. In simple language, a bond is a loan taken by the government, on which
it pays interest. This loan matures after a fixed period of time, at which point, the
government redeems the bond by paying back the principal amount. Depending upon
the sort of government bonds, the tenure is between 91 days to 40 years.
Any individual, Non-Resident Indian (NRI), Hindu Undivided Family (HUF) or

foundation can purchase these bonds from the government. Bonds are issued at a
minimum face value of Rs 1,000 and in products thereof and there is no maximum
limit for investing in government bonds. Government bonds are sold by the Reserve
Bank of India
The Bonds will bear interest at the rate of 7.75% per annum. Interest on non-
cumulative Bonds will be payable at half-yearly intervals from the date of issue (The
date of issue of the Bonds in the form of Bonds Ledger Account, will be opened
(issued) from the date of tender of cash or the date of realisation of draft/cheque.) or
interest on cumulative Bonds will be compounded with half-yearly rests and will be
payable on maturity along with the principal.
In the cumulative Bonds, the maturity value of the Bonds shall be Rs.1,703 for every
Rs.1,000 face value of the bond.
Interest to the holders opting for non-cumulative Bonds will be paid from the date of
issue up to 31st July or 31st January as the case may be, and thereafter half-yearly for
a period ending 31st July and 31st January on 1st August and 1st February.
Interest on Bonds in the form of “Bonds Ledger Account” will be paid, by

electronically by credit to bank account of the holder as per the option exercised by
the investor/holder.
An advice of payment of interest will be issued to the investor one month in advance
from the due date. Maturity intimation advice will be issued one month before the
due date of the bond.

Facility for payment of interest and principal by ‘demand draft free of cost or at par
cheques’ for up country customers is available. The facility of the intra-bank branch
and interbank branch transfer of the bonds is available.
Do remember that you can’t change the bond option in middle from Non-Cumulative
to Cumulative and vice versa.
Figure 4: Government of India Saving Bonds Interest Rate

1.5.1.7. INSURANCE PLAN

Insurance is a means of protection from financial loss. It is a form of risk
management, primarily used to hedge against the risk of a contingent or uncertain
loss.
Insurance is a contract, wherein the individual or an entity gets the protection against
the losses resulting from some unexpected or uncertain event. The concept of
insurance is that a group of people exposed to similar risk come together and make
contributions towards formation of a pool of funds. A person, suffering an actual
loss on account of such risk, is compensated out of the same pool of funds.
The interesting aspect of insurance is that it serves the twin-objective of protection

as well as investment. The investor has to primarily separate the insurance portion
from the investment portion of the premium that he pays, so that he knows, the
quantum of each portion. The total premium paid minus the amount evaluated as the
cost of insurance must be considered as the amount invested. The yield must be
calculated based on this amount to evaluate the investment.
An entity which provides insurance is known as an insurer, insurance company,

insurance carrier or underwriter. A person or entity who buys insurance is known as
an insured or as a policyholder. The insurance transaction involves the insured
assuming a guaranteed and known relatively small loss in the form of payment to the
insurer in exchange for the insurer's promise to compensate the insured in the event
of a covered loss. The loss may or may not be financial, but it must be reducible to
financial terms, and usually involves something in which the insured has an insurable
interest established by ownership, possession, or pre-existing relationship.
The insured receives a contract, called the insurance policy, which details the
conditions and circumstances under which the insurer will compensate the insured.
The amount of money charged by the insurer to the insured for the coverage set forth
in the insurance policy is called the premium. If the insured experiences a loss which
is potentially covered by the insurance policy, the insured submits a claim to the
insurer for processing by a claims adjuster. The insurer may hedge its own risk by
taking out reinsurance, whereby another insurance company agrees to carry some of
the risk, especially if the primary insurer deems the risk too large for it to carry.

1.5.2 Pros and Cons of Traditional Investment
Advantages:
 Less risky as majority of investment are fixed such as FD, post office savings
and gold is a commodity that will be most helpful if the economy is into
crisis.
 Tax benefits are also available in options like postal savings and on long-term
capital gains.
 Investor’s familiarity with these kinds of investments makes them attractive.
 Small amount can also be invested in postal savings, mutual fund and direct
equity investment.
 Traditional investment can be given as a security against loans.
 Traditional investment can be easily converted into liquidity.
Disadvantages:
 Majority of the investments are done on one’s own knowledge without any
professional help except in mutual fund.
 The risk taken is less and thus the earning is also limited. E.g. postal savings
gives 8% p.a. that has no risk involved.
 The interest rates have been falling and therefore there are low investments in
options like FD and post office savings.
 There are many options to be selected from and thus it makes it difficult to
select, which is best suited for us.

1.5.3. Modern Mode Of Investments Or Modern Asset Class
Since the early 1990s, institutional investor interest in “modern” asset classes has
grown significantly. Such modern assets cover a wide range of investment
opportunities. An investment is considered modern if it has relatively limited
investment history, is relatively uncommon in investment portfolios, is relatively
illiquid, has different performance characteristics than traditional assets, is rarely
traded in public markets and requires specialized skills on the part of the manager.
People sometimes use the term Modern Investments i.e. to mean investments other
than in traditional asset classes such as domestic and foreign stocks and bonds.
Actually, however, modern investments often involve stocks and bonds; the
difference lies in the use of non-traditional methods. Institutional investors use
various strategies to invest in some or all of these areas. Although many modern
investment products help institutional investors diversify risk, the products generally
have a high-risk, high-return characteristic. Thus each modern investment is unique
in nature.
 Mutual Funds
 Company Deposits / Public Deposits
 Share
 Money Market
 Debenture
 Systematic Investment Plan
 Unit Linked Insurance Plan (ULIP)

1.5.3.1. MUTUAL FUNDS
A mutual fund is a professionally managed investment fund that pools money from
many investors to purchase securities. These investors may be retail or institutional in
nature.
Mutual funds have advantages and disadvantages compared to direct investing in

individual securities. The primary advantages of mutual funds are that they provide
economies of scale, a higher level of diversification, they provide liquidity, and they
are managed by professional investors. On the negative side, investors in a mutual
fund must pay various fees and expenses.
Primary structures of mutual funds include open-end funds, unit investment trusts,
and closed-end funds. Exchange-traded funds (ETFs) are open-end funds or unit
investment trusts that trade on an exchange. Mutual funds are also classified by their
principal investments as money market funds, bond or fixed income funds, stock or
equity funds, hybrid funds or other. Funds may also be categorized as index funds,
which are passively managed funds that match the performance of an index, or
actively managed funds. Hedge funds are not mutual funds; hedge funds cannot be
sold to the general public and are subject to different government regulations.
Whether an annual return on a mutual fund is good is a relative judgment based on

the investment goals of the individual investor and the overall economic and market
conditions.
Most mutual funds are aimed at long-term investors and seek relatively smooth,
consistent growth with less volatility than the market as a whole. Historically, mutual
funds tend to underperform compared to the market average during bull markets, but
they outperform the market average during bear markets. Long-term investors usually
have a lower risk tolerance and are typically more concerned with minimizing risk in
their mutual fund investments than they are with maximizing gains.
For a mutual fund, a "good" return is largely defined by the individual investor's
expectations and desired level of return. Most investors are likely to be satisfied by a
return that roughly mirrors the average return of the overall market, and a number
that meets or exceeds that goal would constitute a good annual return. However,

investors seeking higher returns would be disappointed by that level of return on

investment.
Figure 5: Types of Mutual Funds
Reasons for investing in Mutual funds are:
 Professional Management
 Diversification
 Economies of Scale
 Liquidity
 Simplicity

1.5.3.2. PUBLIC DEPOSITS
Public deposits refer to the unsecured deposits invited by companies from the public
mainly to finance working capital needs. A company wishing to invite public
deposits makes an advertisement in the newspapers.
Any member of the public can fill up the prescribed form and deposit the money with
the company. The company in return issues a deposit receipt. This receipt is an
acknowledgement of debt by the company. The terms and conditions of the deposit
are printed on the back of the receipt. The rate of interest on public deposits depends
on the period of deposit and reputation of the company.
A company can invite public deposits for a period of six months to three years.
Therefore, public deposits are primarily a source of short-term finance. However, the
deposits can be renewed from time-to-time. Renewal facility enables companies to
use public deposits as medium-term finance.
Public deposits of a company cannot exceed 25 per cent of its share capital and free
reserves. As these deposits are unsecured, the company having public deposits is
required to set aside 10 per cent of deposits maturing by the end of the year. The
amount so set aside can be used only for paying such deposits.
Thus, public deposits refer to the deposits received by a company from the public as
unsecured debt. Companies prefer public deposits because these deposits are cheaper
than bank loans. The public prefers to deposit money with well-established
companies because the rate of interest on public deposits is higher than on bank
deposits. Now public sector companies also invite public deposits. Public deposits
have become a popular source of industrial finance in India.

1.5.3.3. SHARES
In financial markets, a share is a unit used as mutual funds, limited partnerships,

and real estate investment trusts The owner of shares in the corporation/company is
a shareholder (or stockholder) of the corporation. A share is an indivisible unit of
capital, expressing the ownership relationship between the company and the
shareholder. The denominated value of a share is its face value, and the total of the
face value of issued shares represent the capital of a company which may not reflect
the market value of those shares.
The income received from the ownership of shares is a dividend. The process of
purchasing and selling shares often involves going through a stockbroker as a middle
man. There are different types of shares such as equity shares, preference shares,
bonus shares, right shares, employees stock option plans and sweat equity shares.
Valuation:
Shares are valued according to various principles in different markets, but a basic
premise is that a share is worth the price at which a transaction would be likely to
occur were the shares to be sold. The liquidity of markets is a major consideration as
to whether a share is able to be sold at any given time. An actual sale transaction of
shares between buyer and seller is usually considered to provide the best prima facie
market indicator as to the "true value" of shares at that particular time.
Figure 6: Issues of Shares

Terminology:
 Shares outstanding are those that are authorized by the government, issued by
the company, and held by third parties. The number of shares outstanding times
the share price gives the market capitalization of the company, which if the
trading price held constant would be sufficient to purchase the company.
 Treasury shares are authorized, issued, and held by the company itself.
 Issued shares is the sum of shares outstanding and treasury shares.
 Shares authorized include both issued (by the board of directors or shareholders)
and unissued but authorized by the company's constitutional documents.
Shares Certificate:
Historically, investors were given share certificates as evidence of their ownership of

shares. In modern times, certificates are not always given and ownership may be
recorded electronically by a system such as CREST or DTCC, a central securities
depository.
Types of Shares:
a. Equity Shares
b. Preference Shares
SHARES
EQUITY PREFERENCE
SHARES SHARES
Figure 7: Types of Shares

Equity sharing is another name for shared ownership or co-ownership. It takes one
property, more than one owner, and blends them to maximize profit and tax
deductions. Typically, the parties find a home and buy it together as co-owners, but
sometimes they join to co-own a property one of them already owns. At the end of an
agreed term, they buy one another out or sell the property and split the equity.
Equity is typically referred to as shareholders' equity, which represents the amount of

money that would be returned to a company’s shareholders if all of the assets were
liquidated and all of the company's debt was paid off.
Preference shares, more commonly referred to as preferred stock, are shares of a

company’s stock with dividends that are paid out to shareholders before
common stock dividends are issued. If the company enters bankruptcy, the
shareholders with preferred stock are entitled to be paid from company assets first.
Most preference shares have a fixed dividend, while common stocks generally do
not. Preferred stock shareholders also typically do not hold any voting rights,
but common shareholders usually do.
Companies issue preference shares to raise capital. Preference shares carry many of
the benefits of both debt and equity capital and are considered to be a hybrid security.
A benefit for investors who hold preference shares is that they receive dividend
payments before common stock shareholders. A drawback is that they have no voting
rights as common shareholders typically do.

1.5.3.4. MONEY MARKET
As money became a commodity, the money market became a component of the

financial market for assets involved in short-term borrowing, lending, buying and
selling with original maturities of one year or less. Trading in money markets is done
over the counter and is wholesale.
There are several money market instruments in most Western countries, including
treasury bills, commercial paper, bankers' acceptances, deposits, certificates of
deposit, bills of exchange, repurchase agreements, federal funds, and short-lived
mortgage- and asset-backed securities. The instruments bear differing maturities,
currencies, credit risks, and structure and thus may be used to distribute exposure.
Money markets, which provide liquidity for the global financial system including for
capital markets, are part of the broader system of financial markets.
The money market consists of financial institutions and dealers in money or credit
who wish to either borrow or lend. Participants borrow and lend for short periods,
typically up to twelve months. Money market trades in short-term financial
instruments commonly called "paper". This contrasts with the capital market for
longer-term funding, which is supplied by bonds and equity.
The money market is where financial instruments with high liquidity and very short
maturities are traded. It is used by participants as a means for borrowing and lending
in the short term, with maturities that usually range from overnight to just under a
year.
The core of the money market consists of interbank lending—banks borrowing and
lending to each other using commercial paper, repurchase agreements and similar
instruments.
Money markets serve five functions - to finance trade, finance industry, invest
profitably, enhance commercial banks' self-sufficiency, and lubricate central
bank policies.

Certificat
e
Municipa Treasury
l Notes bills
Money
Market
Instument
Banker's
Commerci
Accetanc
al Paper
e
Repurchas
e
Agreement
Figure 8: Money Market Instrument
Treasury Bills:
Treasury Bills are money market instruments to finance the short term requirements
of the Government of India. These are discounted securities and thus are issued at a
discount to face value. The return to the investor is the difference between the
maturity value and issue price. There are different types of Treasury bills based on
the maturity period and utility of the issuance like, ad-hoc Treasury bills, 3 months,
12months Treasury bills etc. In India, at present, the Treasury Bills are the 91-days
and 364-days Treasury bills.
Money Market Funds:
A money market fund (also called a money market mutual fund) is an open-
ended mutual fund that invests in short-term debt securities such as US Treasury
bills and commercial paper. Money market funds are widely (though not necessarily
accurately) regarded as being as safe as bank deposits yet providing a higher yield.
Mutual funds offer baskets of these instruments, which are generally considered to
be safe, to individual investors. That triggered market panic and a mass exodus from

the funds, which ultimately led to restrictions on them holding higher-yielding

investments in order to raise returns.
STABILITY
LIQUIDITY
HIGHER YIELDS
Cash Money Market Fund
Figure 9: Money Market Fund
Money Market Accounts:
Money market accounts are high interest rate accounts targeted at retail investors
that also allow limited withdrawal facilities, meaning you can write checks from the
account and, in some instances, also get a debit card linked to it. The accounts are
meant to incentivize customers to save money for important purposes, such as down
payment for a home. They can also be used for overdraft protection in some cases.
Thus, funds from your money market accounts are used if you overdraw on your
regular accounts. Funds in money market accounts are insured by the Federal
Deposit Insurance Corporation (FDIC) at banks and the National Credit Union
Administration (NCUA) in credit unions.
In typical money market accounts, banks calculate interest for an account holder on a
daily basis and make a monthly credit to his or her account. Average interest rates
for money market accounts vary based on the amount deposited. Typically, larger
deposit amounts beget higher interest rates.

1.5.3.5. DEBENTURE
In corporate finance, a debenture is a medium- to long-term debt instrument used by

large companies to borrow money, at a fixed rate of interest. The legal term
"debenture" originally referred to a document that either creates a debt or
acknowledges it, but in some countries the term is now used interchangeably
with bond, loan stock or note. A debenture is thus like a certificate of loan or a loan
bond evidencing the fact that the company is liable to pay a specified amount with
interest and although the money raised by the debentures becomes a part of the
company's capital structure, it does not become share capital Senior debentures get
paid before subordinate debentures, and there are varying rates of risk and payoff for
these categories.
Debentures are generally freely transferable by the debenture holder. Debenture

holders have no rights to vote in the company's general meetings of shareholders, but
they may have separate meetings or votes e.g. on changes to the rights attached to
the debentures. The interest paid to them is a charge against profit in the
company's financial statements.
The term "debenture" is more descriptive than definitive. An exact and all-
encompassing definition for a debenture has proved elusive. The English
commercial judge, Lord Lindley, notably remarked in one case: "Now, what the
correct meaning of ‘debenture’ is I do not know. I do not find anywhere any precise
definition of it. We know that there are various kinds of instruments commonly
called debentures. It is an acknowledgement of a debt.
Attributes:
 A movable property
 Issued by the company in the form of a certificate of indebtedness
 Generally specifying the dates of redemption, repayment of principal and

payment of interest
 May or may not create a charge on the assets of the company

1.5.3.6. SYSTEMATIC INVESTMENT PLAN
A Systematic Investment Plan (SIP) is an investment vehicle offered by mutual funds

to investors, allowing them to invest small amounts periodically instead of lump
sums. The frequency of investment is usually weekly, monthly or quarterly.
In SIPs, a fixed amount of money is debited by the investors in bank accounts

periodically and invested in a specified mutual fund. The investor is allocated a
number of units according to the current Net asset value. Every time a sum is
invested, more units are added to the investors account.
The strategy claims to free the investors from speculating in volatile markets by
Dollar cost averaging. As the investor is getting more units when the price is low and
fewer units when the price is high, in the long run, the average cost per unit is
supposed to be lower.
SIP claims to encourage disciplined investment. SIPs are flexible, the investors may
stop investing a plan anytime or may choose to increase or decrease the investment
amount. SIP is usually recommended to retail investors who do not have the
resources to pursue the active investment. In India, a recurring payment can be set for
SIP using Electronic Clearing Services (ECS). Some mutual funds allow tax benefits
under Equity-linked savings schemes. This, however, has a locking period of three
years.
A systematic investment plan (SIP) is a plan where investors make regular, equal
payments into a mutual fund, trading account or retirement account, such as a 401(k),
and benefit from the long-term advantages of dollar-cost averaging (DCA) and the
convenience of saving regularly without taking any actions except the initial setup of
the SIP. Because dollar-cost averaging involves buying a fixed-dollar amount of a
security regardless of its price, shares are bought at various prices, the average cost
per share of the security decreases over time and the risk of investing a large amount
of money into a security lessens. A money market account or other liquid account is
typically used for funding payments or buying shares going into a systematic
investment plan. In addition to SIPs, many investors reinvest dividends received from
their holdings back into purchasing more stock, called dividend reinvestment plans
(DRIPs).

1.5.3.7. UNIT LINKED INSURANCE PLAN
A Unit Linked Insurance Plan (ULIP) is a product offered by insurance companies

that, unlike a pure insurance policy, gives investors both insurance and investment
under a single integrated plan.
A Unit-Linked Insurance Plan is essentially a combination of insurance and an

investment vehicle. A portion of the premium paid by the policyholder is utilized to
provide insurance coverage to the policyholder and the remaining portion is invested
in equity and debt instruments. The aggregate premiums collected by the insurance
company providing such plans is pooled and invested in varying proportions of debt
and equity securities in a similar manner to mutual funds. Each policyholder has the
option to select a personalized investment mix based on his/her investment needs and
risk appetite. Like mutual funds, each policyholder's Unit-Linked Insurance Plan
holds a certain number of fund units, each of which has a net asset value (NAV) that
is declared on a daily basis. The NAV is the value upon which net rates of return on
ULIPs are determined. The NAV varies from one ULIP to another based on market
conditions and fund performance.
Unlike traditional insurance policies, ULIP schemes have a list of applicable charges
that are deducted from the payable premium. The notable ones include policy
administration charges, premium allocation charges, fund switching charges,
mortality charges, and a policy surrender or withdrawal charge. Some Insurer also
charge "Guarantee Charge" as a percentage of Fund Value for built in minimum
guarantee under the policy.
Investment in ULIPs is eligible for tax benefit up to a maximum of Rs 1.5 lacs under
Section 80C of the Income Tax Act.
Maturity proceeds are also exempt from income tax. There is a caveat. The Sum
Assured or the minimum death benefit must be at least 10 times the annual premium.
If this condition is not met, the benefit under Section 80C shall be capped at 10% of
Sum Assured while the maturity proceeds will not be exempt from income tax.

1.5.4. Pros and Cons of Modern Investments
Advantages:
 A low correlation with traditional asset classes,

 Risk diversification through diversified investment,
 Diversification of return sources across commodities, futures, unlisted shares.
 Ability to use leverage, short securities and employ derivatives
 Prospect of style drift and focus on absolute return
Disadvantages:
 Disclosure is inadequate regarding investments

 Market value cannot always be determined due to low liquidity,
 Holdings cannot be quickly redeemed for cash (one month’s prior notice is
often necessary),
 Extensive credit research is needed for each fund
 A common benchmark does not exist.
 Not yet widely available to individual investors
 Subject to less regulation than traditional investments

1.5.5. Traditional Mode v/s Modern Modes of Investment Avenues
Traditional Mode of Modern Mode of Investment

Investment
Meaning The action or process of The Investment which does not

investing money for profit fall into traditional asset. It
traditionally such as by investing includes Shares, Mutual Funds,
in Gold, FD, Real Estate, etc. SIP, ULIP, Debenture, etc.
Cost Costs of purchase and sale may Costs of purchase and sale may
be relatively low be relatively high
Risk High historical risk as compared Limited historical risk as

to modern asset class compared to traditional asset
class
Time Data measured over same time Data measured over different
Period period time period
Liquidity Illiquid Liquid
Return Accurate measurement of returns Inconsistent measurement of

returns
Fees Asset management fees is lower Asset management fees is higher
Examples Gold, Fixed Deposit, Insurance Mutual Fund, Company

Plan, Govt. Saving Bonds, Post Deposit/Public Deposit, Equity &
Office Saving, Public Provident Preference Shares, Bond &
Fund. Debenture, Money Market, SIP,
ULIP.

CHAPTER NO. 2
REVIEW OF LITERATURE
Awareness, environment level of exposure intensions, beliefs and responsibilities are

the factors responsible for deciding investment policies. Behavioural pattern helps in
preparing various schemes for investments. Investment temperament of salaried
strata based on investment awareness and expected rate of investment return.
Investment attracts all people irrespective of their occupation, education and social
status. Investors also involve in investment activities. Investors below age of 30 are
involved in investment activities. Investors with graduation are involved in more
investment activities. Investors with income of 50001 to 100000 are involved in
investment activities.
Investment and savings are two different things. Investment means saving with a hop
that some benefit will arise in future. Investment options are available like Bank
deposits, Mutual funds, Real Estate, Shares and Bonds etc.
Investment is the consumption and saving opportunity in future expressed in

monetary terms. Two classes of investments like Fixed income statements i.e.
Preference shares, Bonds, fixed deposits and Variable income investment i.e. equality
capital, proprietary ownership. Data shows that respondents between the age group of
26 years to 35 years are involve in investment activities. National output is increase
for future by investment.
Investor’s choice with the objective of return optimization is investment in the stock
market instruments or securities. Stock market securities are affected by various
internal and external factors. Mutual Fund is the most likely investment for the
common man as it provides an opportunity to invest in a diversified, professionally
managed security at a relatively low cost. Main objective of investment is wealth
accumulation for investor according to this study.

CHAPTER NO. 3
RESEARCH METHODOLOGY
3.1. Introduction
Research methodology is the systematic way to solve the research problem. It is a

system of models, procedure and techniques used to find the result of the research
problems. So, the research methodologies not only take about research methods but
also consider the logic behind the method we use in the context of our research study.
It consists of several steps which need to be implemented in a sequential order for

achieving objective of research effectively. Research Methodology is a way of
systematically solves the research problems. It may be understood as a science of
studying how research is done scientifically. In it we study various steps that are
generally adopted by a researcher in studying his research problem along with logic
behind them.
To complete the analytical study on investment facility, the required data is collected
by the way of following means. The required data is classified by here by two ways
that is primary data and secondary data. And also collected ways are mention, which
helps to bring on conclusion of the project.
As it is indicated in the title, this chapter includes the research methodology of the
dissertation. In more details, in this part we will see the research objective, the
research scope, and the methods of data collection, the selection of the sample, the
type of data analysis and the research limitations of the project.

3.2. Tools of data Collection
Primary Data Collection
 The primary data are those which are collected a fresh and for the first time &
thus happen to the original in character.
 It can be collected by using methods like observation, experimentation, etc
collection of primary data is costly & time consuming.
 Personal discussion with Manager and Employees.
 Questionnaire filled by Customers and Employees.
Secondary Data Collection
The secondary data on the other hand, are those which are already been collected by
someone else and which already have been passed through the statistical process. It is
used to analyse the performance of various investment avenues. The data were
collected from.
The data is collected through the secondary sources like:
 Annual Report of the Bank.
 Study of various Magazines & books
 Internet
3.3. Sample Area
The sample area for the proposed research of the project would be conducted in Yavatmal
city.
3.4. Span of the study
The span of study is one academic year i.e. 2018-2019
3.5. Sample of size
The sample size for this research work would be 100 respondents.

3.6. Research Objective
In broad terms, the main investment objectives cover how we accomplish most
financial goals. These investment objectives are important because certain products
and strategies work for one objective, but may produce poor results for another
objective. It is quite likely we will use several of these investment objectives
simultaneously to accomplish different objectives without any conflict.
1. To identify the different type of investment avenues.

2. To study the preference of investors on investment avenues.
3. To review the money market developments in recent times in India.
4. To know the impact of socio-economic profile on the investment decision of
small equity investors.
5. To identify the investment pattern of small equity investors, their portfolio
practices based on demographic factors and the problems associated with small
equity investment;
6. To know the investors perception towards risk-return of investment and the post
investment satisfaction of the small equity investors in Indian money market.
7. To suggest measures to overcome the problems for enhancing small investor’s
participation in Indian capital market.
3.7. Research Scope

 The different eligibility factor for taking a particular investment.
 The different documents requirement for investment.
 The study was carried out through personal interaction with the customers and
filling the questionnaire.

3.8. Hypothesis of Study
Alternative Hypothesis
 The people are aware about the traditional and modern modes of investment
avenues.
 Peoples are getting more benefit in the modern investment avenues than
traditional investment avenues.
Null Hypothesis
 The people are not aware about the traditional and modern modes of investment
avenues.
 Peoples are not getting more benefit in the modern investment avenues than
traditional investment avenues.
3.9. Limitations of Study
 The data for study mainly based on an investment.

 Some people were not willing to disclose the investment profile.
 The time period of the research is limited.
 Issues with sample and selection
 Lack of previous research studies on the topic.
 Methods/ instruments/ techniques used to collect the data.
 The area of sample was decided after taking into consideration the major factors
like:
 Availability of investors
 Approachability
 Time available with investors for interaction, etc.

CHAPTER NO. 4
COMPANY PROFILE
4.1. Traditional Investment
A. For Gold
Name : Khandelwal Jewellers

Industry : Gold
Founder : Shri Madanlalji Khandelwal
Main Branch : Akola
Established : 2010
Branch Manager : Mr. Nitin, and Mr. Ravindra
Yavatmal Manager : Mr. Sohel Khan
B. For Bank Deposit

Name : Washim Urban Co-operative Bank
Industry : Banking
Founder : Late Shri. Ramkrishna Rathi
Main Branch : Washim
Established : 1972
Branch Manager : Shri. K. P. Randhave
Yavatmal Manager : Sau. V. A. Agrawal
C. For Post Office Savings
Name : Post Office/ Dak Ghar

Industry : Postal Services
Founder : Ananta Narayan Nanda
Main Branch : Delhi
Established : 1650
Branch Manager : Ananta Narayan Nanda
Yavatmal Manager : Mrs. Dharmik

4.2. Modern Investment
A. For Mutual Funds, Shares, Debenture, SIP
Name : Angel Broking

Industry : Kotak Securities
Founder : Dinesh Thakkar
Main Branch : Mumbai
Established : 1987
Branch Manager : Dinesh Thakkar
Yavatmal Manager : Mr. Vicky Sharma
B. For ULIP
Name : Bajaj Allience
Industry : Insurance
Founder : Tarun Chugh
Main Branch : Pune, India
Established : 2001
Branch Manager : Tarun Chugh
Yavatmal Manager : Mrs. Gupta

CHAPTER NO. 5
DATA ANALYSIS, INTERPRETATION AND FINDINGS
5.1. Data Analysis & Interpretation
1. Do you aware about Investment?
Sr. No. Response Feedback of Respondents

1 Yes 100
2 No 20
Table 1: Know about Investment
From the above table, following pie graph is drawn:
Percentage
20
Yes
No
100
Graph 1: Data shows about Investment
Data Interpretation: - From the above data it is clear that, 100% of investors know
about the Investment.

2. What percentage of your annual income do you save to Invest?

1 5-10% 35%
2 10-20% 45%
3 20% & above 20%
Table 2: Percentage of annual income
Percentage
20
5-10%
35
10-20%
45
Graph 2: Data Show percentage of annual income saves to Invest
Data Interpretation: - From the above data it is clear that, the 45% of investors save
their annual income in 10-20% to Invest.

3. Are you aware of the following Investment Mode?
Sr. No. Response Feedback of Respondent

1 Traditional Modes 55%
2 Modern Modes 45%
Table 3: Aware of Investment Mode
Percentage
Traditional
Mode
45 Modern
55 Mode
Graph 3: Data Shows Aware about Investment Mode
Data Interpretation: - From the above data it is clear that, the 65% of investors are
aware of the traditional modes of investment and 35% of investors are aware of the
modern modes of investment

4. What is the time period you prefer to Invest?

1 Short Term 40%
2 Medium Term 45%
3 Long Term 15%
Table 4: Time period prefer to Invest
Percentage
15
Short Term
40 Medium term
Long Term
45
Graph 4: Data Shows Time Period prefer to Invest
Data Interpretation: - From the above chart, it is clear that the 45% of investors
prefer to invest in medium term period, 40% of investors prefer to invest in short
term and only 15% of investors prefer to invest in long term.

5. What are the factors you consider before Investing?

1 Safety 45%
2 Liquidity 25%
3 Tax benefit 16%
4 High return 14%
Table 5: Factors before Investing
Percentage
14
Safety
16 45 Liquidity
Tax Benefit
High Return
25
Graph 5: Data Shows Factors before Investing
Data Interpretation: - From the above data it is clear that, the 45% of investors
want Safety, 25% of investors want Liquidity, 16% of investors want Tax Benefit and
only 14% of investors want High Return for their investment.

6. In which Sector do you prefer to Invest your Money?

1 Public Sector 32%
2 Private Sector 47%
3 Foreign Sector 21%
Table 6: Sectors to Invest Money
Percentage
21
32 Public Sector
Private Sector
Foreign Sector
47
Graph 6: Data Shows Sectors to Invest Money
Data Interpretation: - From the above data it is clear that, 47% of investors prefers
to invest in Private Sector, 32% of investors prefer to invest in Public Sector and only
21% of investors prefer to invest in Foreign Sector.

7. Which Investment option is better?

1 Fixed Deposit 20%
2 Share 25%
3 Post Office Saving 15%
4 Mutual Funds 40%
Table 7: Better Option of Investment
Percentage
20
Fixed Deposit
40 Share
Post Office Saving
25 Mutual funds
15
Graph 7: Data Shows Better option of Investment
Data Interpretation: - From the above data it is clear that, the 40% of investors says
Mutual Fund is better, 25% of investors says Share is better, 20% of investors says
Fixed Deposit is better and only 15% of investors says Post Office Saving is better
option of Investment.

8. In which scheme do you Invest in bank?

1 Saving a/c 42%
2 Fixed deposit a/c 37%
3 Recurring deposit a/c 21%
Table 8: Schemes that people have Invest
Percentage
21
Saving a/c
42 Fixed deposit a/c
Recurring deposit a/c
37
Graph 8: Data Shows Schemes that people Invest in bank
Data Interpretation: - From the above data it is clear that, 42% of investors want to
invest in Saving a/c, 37% of investors want to invest in Fixed deposit a/c and 21% of
investors want to invest in Recurring deposit a/c

9. What is the reason for Investing in Fixed Deposit Account?

1 Return 37%
2 No Risk in Investment 63%
Table 9: Reason for Investing in Fixed Deposit Account
Percentage
37
Return
63
No Risk In
Investment
Graph 9: Data Shows Reason for Investing in Fixed Deposit Account
Data Interpretation: - From the above data it is clear that, 63% of investors want
No Risk in Investment and 37% of investors want return from the Fixed Deposit.

10. What are your savings objectives?

1 Children’s Saving 23%
2 Retirement Plan 19%
3 Home Purchase 16%
4 Health Care 13%
5 All of these 29%
Table 10: Saving Objective
Percentage
23 Children's Saving
29
Retirement Plan
Home Purchase
Health Care
19
13 All of these
16
Graph 10: Data Shows Saving Objective
Data Interpretation: - From the above data it is clear that, the 29% of investors have
all these as their saving objective, 23% of investors have Children’s Savings as their
saving objective, 19% of investors have Retirement Plan as their saving objective
while 16% have home purchase as their saving objective and 13% have Health Care
as their savings objective.

11. Can you take the risk of losing your principal Investment Amount?

1 Yes 10%
2 No 90%
Table 11: Risk of losing Principal Investment Amount
Percentage
10
Yes
No
90
Graph 11: Data Shows Risk of Losing Principal Investment Amount
Data Interpretation: - From the above data it is clear that, 90% of investors can’t
take risk of losing their Principal Investment Amount while only 10% of investors
can take risk of losing their Principal Investment Amount

12. Are you satisfied with the return you earn from which Modes of Investment
option?
1 Traditional Mode 44%
2 Modern mode 56%
Table 12: Satisfied with the Return from which Mode of Investment
Percentage
44
Yes
No
56
Graph 12: Data Shows Satisfied with Return from which Mode of Investment
not satisfied with their return they earn from Traditional Mode of Investment and rest
44% of investors are satisfied with their return.

13. Do you Invest your Money in Share Market?

1 Yes 69%
2 No 31%
Table 13: Money Invest in Share Market
Percentage
31
Yes
No
69
Graph 13: Data Shows Money Invest in Share Market
Data Interpretation: - From the above data it is clear that, 69% of investors invest
their money in Share Market and remaining 31% of investors doesn’t invest their
money in Share Market.

14. Do you Invest your Money in Real Estate?

1 Yes 40%
2 No 60%
Table 14: Money Invest in Real Estate
Percentage
40 Yes
60
No
Graph 14: Data Shows Money Invest in Real Estate
Data Interpretation: - From the above data it is clear that, 40% of investors invest
their money in Real Estate and remaining 60% of investors doesn’t invest their
money in Real Estate.

15. Are you interested in Investing Gold?

1 Yes 42%
2 No 58%
Table 15: Investing in Gold
From the above table, following pie graph is drawn;
Percentage
42 Yes
58
No
Graph 15: Data Shows Investment in Gold
Data Interpretation: - From the above data it is clear that, 42% of investors are
interested in investing in Gold and remaining are not.

16. Are you interested in Investing Debenture?

1 Yes 52%
2 No 48%
Table 16: Investing in Debenture
From the above table, following pie graph is drawn;
Percentage
52 Yes
48
No
Graph 16: Data Shows Investment in Debenture
Data Interpretation: - From the above data it is clear that, 52% of investors are
interested in investing in Debenture and remaining are not.

17. How you expect your Investment to grow?

1 Steadily 36%
2 Fast 20%
3 At an Average Rate 44%
Table 17: Investment Rate to Grow
Percentage
Steadily
36 Fast
44
At an Average
Rate
20
Graph 17: Data Shows Investment Rate to Grow
Data Interpretation: - From the above data it is clear that, 44% of investors want
their investment grow at an Average Rate, 36% of investors want their investment
grow Steadily, while other 20% of investors want their investment grow Fast.

18. How often do you monitor your Investment?
Sr. No. Monitor Investment Percentage

1 Daily 15%
2 Weekly 19%
3 Monthly 27%
4 Occasionally 39%
Table 18: Monitor Investment
Percentage
15
39 Daily
19 Weekly
Monthly
Occasionally
27
Graph 18: Data Shows Monitor Investment
Data Interpretation: - From the above data it is clear that, 39% of investors monitor
their investment. Occasionally, 27% of investors monitor their investment Monthly,
19% of investors monitor their investment Weekly, and rest 15% of investors monitor
their investment Daily.

19. From which source you come to know about various Investments option?
Sr. No. Different Source of Information Percentage

1 Friend/ Relative 38%
2 TV/ Newspaper 20%
3 Agent 15%
4 Internet 27%
Table 19: Different Source of Information
Percentage
27
38 Friend/ Relative
TV/ Newspaper
Agent
15 Internet
20
Graph 19: Data Shows Different Source of Information
Data Interpretation: - From the above data it is clear that, 38% of investors getting
information from Friends/ Relative, 27% of investors getting information from
Internet, 20% of investors getting information from TV/ Newspaper and rest 15%
from Agent.

20. Are you satisfied with the suggestion given by bank relating to Investment?
1 Yes 79%
2 No 21%
Table 20: Satisfied with Suggestion Given by bank relating to Investment
Percentage
21
Yes
No
79
Graph 20: Data Shows Satisfied with the Suggestion Given by bank relating to
Investment
Data Interpretation: - From the above data it is clear that, most of the investors i.e.
79% are satisfied with suggestions given by bank relating to investment.

21. Since how many years do you use the Investment Facilities?

1 1year 5%
2 2year 16%
3 3year 51%
4 Above 3 year 28%
Table 21: Years use Investment Facilities
Percentage
28 16 1 Year
2 Year
3 Year
Above 3 Year
51
Graph 21: Data Shows Years use Investment Facilities
Data Interpretation: - From the above chart, it is clear that the most of the investors
use the Investment facilities for since 3 year.

5.2. Findings
According to survey, following are the findings of the study.
 100% of People are aware about Investment.

 45% of People save their Annual Income in 10-20%.
 45% of People prefer to Invest in Medium Term Period.
 45% of People want Safety while Investing
 47% of customers are Prefer to Invest in Private Sector.
 40% of Investor says Mutual Fund is better.
 42% of people want to invest in Saving Account.
 63% of People want No Risk in Investment.
 29% of People have saving objective as Children’s Saving, Retirement Plan,
Home Purchase, Health Care.
 56% of Investor is satisfied with the return in Modern Modes of Investment.
 69% of Investors invest their Money in Share Market.
 58% of Investors want to invest in Debenture.
 44% of Investors expect their Investment grow at an Average Rate.
 39% People Monitor their Investment Occasionally.
 38% of customer gets information from Friends & Relatives.
 79% of customers are satisfied with suggestions given by bank relating to
Investment.
 51% of customers use the Investment Facilities since 3 years.

5.3. Hypothesis Testing
From the analysis of questionnaire the Hypothesis No. 1 is proved from the Question
No. 1 and Question No. 3 & the details regarding Hypothesis is as Follows;
Hypothesis No. 1: The people are aware about the traditional and modern modes of
investment avenues.

1 Yes 100
2 No 20
Table 1: Know about Investment
Percentage
20
Yes
No
100
Graph 1: Data shows about Investment
Data Interpretation: - From the above data it is clear that, 100% of investors know
about the Investment.


1 Traditional Modes 55%
2 Modern Modes 45%
Table 2: Aware of Investment Mode
Percentage
Traditional
Mode
45
55 Modern
Mode
Graph 2: Data Shows Aware of Investment Modes
aware of the traditional modes of investment and 35% of investors are aware of the
modern modes of investment. Hence in this case Alternative Hypothesis is Prove.

From the analysis of questionnaire the Hypothesis No. 2 is proved from the Question
No. 7 and Question No. 12 & the details regarding Hypothesis is as Follows;
Hypothesis No. 2: Peoples are getting more benefit in the modern investment
avenues than traditional investment avenues.

1 Fixed Deposit 20%
2 Share 25%
3 Post Office Saving 15%
4 Mutual Funds 40%
Table 3: Better Option of Investment
Percentage
20
Fixed Deposit
40 Share
Post Office Saving
25 Mutual funds
15
Graph 3: Data Shows Better options of Investment
Data Interpretation:- From the above data it is clear that, the 40% of investors says
Mutual Fund is better, 25% of investors says Share is better, 20% of investors says
Fixed Deposit is better and only 15% of investors says Post Office Saving is better
option of Investment.

option?
1 Traditional Mode 44%
2 Modern mode 56%
Table 4: Satisfied with the return from which mode of Investment
Percentage
44 Yes
56
No
Graph 4: Data Shows Satisfied with Return from which mode of Investment
not satisfied with their return they earn from Traditional Mode of Investment and rest
44% of investors are satisfied with their return. Hence in this case Alternative
Hypothesis is Prove.

CHAPTER NO. 6
CONCLUSION AND RECOMMENDATIONS
6.1. Conclusion
 This study confirms the earlier findings with regard to the relationship between
age and income level of the individual investors. Also, it has been concluded that
the Investors are aware about the different modes of avenues.
 The data analysis reveals that the safety is important factor while doing
investment.
 Investors are investing in Different avenues are useful for them.
 Investors are satisfied with the facilities available to them.
 Investors are updated with the newly launched schemes and facilities.
 Investors are getting more benefit in Modern Modes of avenues than Traditional
Modes of avenues.
 Most of the investors prefer to invest in mutual funds because of its safety and
less risk and more return in Investment.
 The analysis of the study was done by questionnaire method. After the analysis
and interpretation, it has been concluded that most of the respondents are prefer
to invest in mutual funds, shares, Debenture i.e. in Modern Modes Avenues
because they receive more Return, Safety.

6.2. Suggestions & Recommendations
 Investment procedure should be less time consuming.
 Investors should make the investment with proper planning keeping in mind
their investment objectives.
 Investors should also consults the brokers or agents to seek information and
advice but their decision should not merely be based on agents advice rather the
decision should be based on their careful investigation.
 While investing money, investor should take advice or guidance of any financial
analyst for better return and safety towards investment.
 The investors should select a particular investment option on basis of their need
and risk tolerance.
 The investors should diversify their investment portfolio in order to reduce the
risk.
 The investors should continuously monitor their investments.
 Generally, investors like youngster invest in Modern Modes and senior citizens
should invest in Traditional Mode.
 Senior citizens must be facilitate with high rate of interest.

CHAPTER NO. 7
APPENDICES
APPENDIX
Dear Respondent,
I am the student of 4th semester MBA, CMCS Yavatmal, as a part of curriculum. I

have undertaken a project work entitled “A Study of Traditional and Modern Modes
of Investment Avenues”. I request you to spear some of your valuable time to
complete the questionnaire. I assured that the data provided by you will be strictly
used for academic purpose only and shall be kept confidential.
Thanking you!
QUESTIONNAIRE
Personal Information:
Name :
Address :
Mobile No. :
Gender : Male: Female:
Occupation :
 Age:
a) 18-35 b) 35-45
c) 45-55 d) 55 & above
 Qualification:
a) Under Graduates b) Graduates
c) Post Graduates
 Income Group:
a) Below 1,00,000 b) 1,00,000 to 2,00,000
c) 2,00,000 to 4,00,000 d) Above 4,00,000


a) Yes b) No
2. What percentage of your annual income do you save to Invest?

a) 5-10% b) 10-20%
c) 20% & above

a) Traditional Modes b) Modern Modes
4. What is the time period you prefer to Invest?

a) Short Term b) Medium Term
c) Long Term
5. What are the factors you consider before Investing?

a) Safety b) Tax Benefit
c) Liquidity d) High return
6. In which Sector do you prefer to Invest your Money?

a) Public Sector b) Private Sector
c) Foreign Sector

a) Fixed Deposit b) Post Office Saving
c) Share d) Mutual Funds
8. In which scheme do you Invest in bank?

a) Saving a/c b) Fixed deposit a/c
c) Recurring a/c
9. What is the reason for Investing in Fixed Deposit Account?

a) Return b) No Risk in Investment
10. What are your savings objectives?

a) Children’s Saving b) Retirement Plan
c) Home Purchase d) Health Care
e) All of these

11. Can you take the risk of losing your principal Investment Amount?
a) Yes b) No
option?
a) Traditional Mode b) Modern Mode
13. Do you Invest your Money in Share Market?

a) Yes b) No
14. Do you Invest your Money in Real Estate?

a) Yes b) No
15. Are you interested in Investing Gold?

a) Yes b) No
16. Are you interested in Investing Debenture?

a) Yes b) No
17. How you expect your Investment to grow?

a) Steadily b) At an Average Rate
c) Fast
18. How often do you monitor your Investment?

a) Daily b) Weekly
c) Monthly d) Occasionally
19. From which source you come to know about various Investments option?
a) Friend/ Relative b) TV/ Newspaper
c) Agent d) Internet
20. Are you satisfied with the suggestion given by bank relating to Investment?
a) Yes b) No
21. Since how many years do you use the Investment Facilities?
a) 1 year b) 2 year
c) 3 year d) Above 3 year

BIBLIOGRAPHY
List of Reference Books:-
 Preethi Singh, “Investment Management, Himalaya Publishing House, New

Delhi, 17th revised edition, 2009.
 Dr. L. Natarajan, Investment Management, Margham Publications, Chennai.
 Prasanna Chandra, investment analysis and portfolio management, Tata

McGraw Hill Education Pvt. Ltd.
 V A Avadhani, Security Analysis and Portfolio Management, 10th revised

edition, 2010
List of Websites:-
 www.wikipedia.com
 www.moneymanagementideas.com
 www.investopedia.com
 www.indianmoney.com
 www.google.com
 www.moneycontrol.com

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“A Study of Traditional and Modern Modes of Investment

Under the Guidance of

Prof. Ritesh D. Chandak

In Partial Fulfillment of the Requirements

Miss. Samruddhi S. Malani

Prof. Ritesh Chandak Prof. Ritesh Chandak Prof. Ritesh Chandak

(Principal) (HOD, MBA Dept) (Project Guide)

Date: Samruddhi S. Malani

Place: Yavatmal MBA II

My sincere gratitude to all Mr. Sohel Khan (Manager of Khandelwal Jewellers,

Indeed a great pleasure and amount of immense satisfaction for me to express my

I also thankful to honorable Principal Ritesh D. Chandak, President Mr. Prakashji

Samruddhi S. Malani Prof. Ritesh Chandak

MBA- II Year Project Guide

Sr. No. Contents Page No.

5. Data Analysis, Interpretation and Findings 41

Sr. No. Figures Name Page No.

2. 1 Year Gold Prices in Indian Rupees 8

3. Public Provident Fund Interest Rate 10

4. Government of India Saving Bonds Interest Rate 16

5. Types of Mutual Funds 21

8. Money Market Instrument 27

9. Money Market Fund 28

Sr. No. Table Name Page No.

1. Know about Investment 41

2. Percentage of annual income 42

3. Aware of Investment Mode 43

4. Time period prefer to Invest 44

5. Factors before Investing 45

6. Sectors to Invest Money 46

7. Better Option of Investment 47

8. Schemes that people have Invest 48

9. Reason for Investing in Fixed Deposit Account 49

10. Saving Objective 50

11. Risk of losing Principal Investment Amount 51

12. Satisfied with the return from which mode of 52

13. Money Invest in Share Market 53

14. Money Invest in Real Estate 54

15. Investing in Gold 55

16. Investing in Debenture 56

18. Monitor Investment 58

19. Different Source of Information 59

20. Satisfied with Suggestion Given by bank relating to 60

21. Year Use Investment Facilities 61

Sr. No. Graph Name Page No.

1. Data Shows Know about Investment 41

2. Data Shows Percentage of annual income 42

3. Data Shows Aware of Investment Mode 43

4. Data Shows Time period prefer to Invest 44

5. Data Shows Factors before Investing 45

6. Data Shows Sectors to Invest Money 46

7. Data Shows Better Option of Investment 47

8. Data Shows Schemes that people have Invest 48

9. Data Shows Reason for Investing in Fixed Deposit 49

10. Data Shows Saving Objective 50

11. Data Shows Risk of losing Principal Investment 51

12. Data Shows Satisfied with the Return from which 52

13. Data Shows Money Invest in Share Market 53

14. Data Shows Money Invest in Real Estate 54

15. Data Shows Investing in Gold 55

17. Data Shows Investment Rate to Grow 57

18. Data Shows Monitor Investment 58

19. Data Shows Different Source of Information 59

20. Data Shows Satisfied with Suggestion Given by bank 60