A COMPREHENSIVE PROJECT REPORT ON IDENTIFICATION OF PEOPLE PREFERENCE LEVEL REGARDING VARIOUS INVESTMENT AVENUES

Submitted to
PARUL INSTITUTE OF ENGINEERING AND TECHNOLOGY- MBA INSTITUTE CODE 742

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ASMINISTRATION Under

Gujarat Technological University

UNDER THE GUIDANCE OF Faculty Guide Prof. Bhavik Mehta Submitted by Madan Joshi 97420592004 Mahin Prajapati 97420592039 M.B.A SEMESTER IV
PARUL INSTITUTE OF ENGINEERING AND TECHNOLOGY- MBA

M.B.A PROGRAMME Affiliated to Gujarat Technological University Ahmedabad April 2011

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PREFACE
The preference of Indian investor is changing rapidly. Previously they were investing into fixed income earning securities . In this f ixed income earning securities Government securities, bonds and debentures and fixed deposits were common avenues. But with the passage of time inflation increased, so there was a great need of avenues where higher returns, more liquidity and better management of Investors fund needed. Initially people started investing in share market but it was highly volatile and it required constant watch over the fund. So people started shifting over mutual funds

because they were professionally managed they were also having high liquidity good return and they were also helping in tax planning. From last few years mutual fund industry has shown phenomenon growth more and more people are attracting towards mutual funds. On the other hand other sector, which is booming, is insurance sector. Because in India large chunk of people are not having any insurance and those who are having insurance are underinsured. Traditionally people used to have insurance for the purpose of risk cover and tax planning, but now insurance companies are also providing benefits of market movement through Unit Linked Insurance Plans. This plan not only gives risk cover but also provides certain returns as well. So now Indian investors have started accepting this type of insurance plans rather than traditional insurance plans. As the competition increases and new products are launched Indian customer is having sufficient choice between different avenues, which provides market linked returns, so Indian investors are enabled with various option to suit their financial goals and tax planning requirements.

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ACKNOELEDGEMENT
Many individuals have rendered their helping hand to us in carrying out this project. We take this opportunity to express our gratitude to all of them. We are very much pleased to express our heartiest gratitude to our venerable Director Dr. PGK Murthy for providing us with such a glorious opportunity for learning practicality of bookies concepts. We pay heartiest gratitude to our college mentor Mr. Bhavik Mehta who has provided us with the valuable suggestions, support and guidance to successfully complete our project work.

Words of thanks to staff of Parul Institute of Engineering & Technology , Vadodara for their co-operation and support. We would be failing in our duty, if We dont pay our gratitude to all important respondents as without their support the project would not have materialized

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DECLARATION

We, Madan Joshi & Mahin Prajapati, hereby declare that the report for Comprehensive Project entitled IDENTIFICATION OF PEOPLE

PREFERENCE LEVEL REGARDING VARIOUS INVESTMENT AVENUES is a result of our own work and our indebtedness to other
work publications, references, if any, have been duly acknowledged.

Place : Vadodara Date :

Madan Joshi Mahin Prajapati

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EXECUTIVE SUMMARY
Statement of the study A study on identification of people awareness, investment and preference level and their investment criteria regarding various investment avenues namely bank deposits, equity, mutual funds, real estate, insurance . Purpose of the study This study has been under taken to find out the preference level of people towards various investment avenues and the parameters that they consider crucial for investment decision. This study will provide to understand market better and to come out with appropriate strategy for understand preference of existing customer better. Key findings Most of the people are aware regarding investment avenues namely bank deposits, equity investment, mutual fund, insurance and real estate etc. Most of the people are investing their fund in bank deposits and insurance. Return, safety and risk are considered as a most important investment parameter Bank Deposit is the best investment avenue followed by Postal Savings second best, Insurance third best, equity investment fourth best

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TABLE OF CONTENTS
Preface Acknowledgement Declaration Executive Summary SR. NO.

PARTICULARS

PAGE NOS.

Introduction of the Study 1.1 Overview of the investment 1.2 Investment Avenues (1) Bank Deposit (2) Precious Metals (3) Equity Investment (4) Mutual Funds (5) Real Estate (6) Insurance (7) Postal Savings 1.3 Types of Investor and Recommended Investment Strategies 1.4 Comparison of different investment Option from the Investor perspective In terms of different factors

08 08 11

23

25 2 Research Methodology 2.1Research Design 2.2Sources of Data 2.3Data Collection Method 2.4Sampling Method 2.5Date Collection Instrument Data Analysis and Interpretation Results and Findings Limitations of the Study Conclusion/Suggestions 27

3 4 5 6

29

Annexure Bibliography

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1.1

INTRODUCTION

Overview of Investment
WHAT IS INVESTMENT?

The money you earn is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle, you may like to use savings in order to get return on it in the future is termed as investment. Investment is the employment of funds on assets with the aim of earning income or capital appreciation. For a layman, investment means some monetary commitments. In its broadest sense, an investment is a sacrifice of current money or other resources for future benefits. Numerous avenues of investment are available today. You can either deposit money in a bank account or purchase a long-term government bond or invest in the equity shares of a company or contribute to a provident fund account or buy a stock option or acquire a plot of land or invest in some other form. The two key aspects of any investment are time and risk. The sacrifice takes place now and is certain. The benefit is expected in the future and tends to be uncertain. In some investments (like government bonds) the time element is the dominant attribute. In other investments (like stock options) the risk element is the dominant attribute. In yet other investments (like equity shares) both time and risk are important. Almost everyone owns a portfolio of investments. The portfolio is likely to comprise financial assets (bank deposits, bonds, stocks, and so on) and real assets (motorcycle, house, and so on). The portfolio may be the result of a series of haphazard decisions or may be the result of deliberate and careful planning.

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Most people will find that their investment objectives change throughout their lives. Capital appreciation may be more important for the young investor, but once she or he enters her golden years, that same investor may place a greater emphasis on gaining income. Whatever your objective, knowing what investment options are out there is key. Furthermore, as most successful investors will tell you, diversification is

king. A diversified portfolio not only reduces unwanted risk, but also contributes to a winning portfolio. And having a well-diversified portfolio doesn't necessarily mean just buying more than one stock; branching out into other areas of investment could be a viable alternative. This paper is focused upon the total number of investments available for the investor. Apart from the diversification, every investor has to see the power of compounding which can enhance the value of investments. So for taking the maximum advantage of the compounding every investor should start early to invest. Warren Buffet has started its investment at the age of 11even though he thought that he was too late to invest. e.g. If you are going to invest 5000 per month @ 7% compounding interest rate for the 25 years then at the end of the 25 years you would get around 40 lakh against 15 lakh invested. In this Paper, I have included all types of financial investments available in Young India. Every investment option has been checked according to its strength & weakness.

THE ARE :

FUNDAMENTAL

CORNER

STONES

OF

SUCCESSFUL

INVESTING

SAVE REGULARLY, INVEST REGULARLY START EARLY USE TAX SHELTERS INVESTMENT RETURNS SHOULD EXCEED THE INFLATION.

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WHY SHOULD ONE INVEST? (1) To earn return on your idle resources. (2) To generate a specified sum of money for a specific goal in life. (3) To 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. The aim of investments should be to provide a return above the inflation rate to ensure that the investment does not decrease in value.

INVESTMENT OBJECTIVES: The main investment objectives are increasing the rate of return & reducing the risk, safety, liquidity & hedge against inflation.

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1.2

INVESTMENT AVENUES
How do various investment avenues like equity shares, fixed deposits, real

estate, and so on compare? A summary evaluation of these investment avenues in terms of key investment attributes is given below.

(1) Bank Deposits The simplest of investment of avenue, opening a bank account and depositing money in it one can make a bank deposits, there are various kinds of bank accounts; current account, saving account, and fixed deposit account. While a deposit in a current account does not earn any fixed interest, deposits in other kinds of bank accounts earn interest. The important feature of bank deposit is as follows: There is a ceiling on the interest rate payable on deposit in the savings account. The interest rate on fixed deposits varies with the term of the deposit. If the deposit period is less than 90 days, the interest is paid on maturity; other wise it is paid quarterly. Bank deposits enjoy exceptionally high liquidity. Loan can be raised again bank deposits. Fixed Deposit (FD) There are two types of FDs. Fixed Deposits in companies that earn a fixed rate of return over a period of time are called Company Fixed Deposits. Bank also accepts the deposits which is called Bank deposits. Company deposits are unsecured, i.e., if the company defaults, the investor cannot sell the documents to recover his capital, thus making them a risky investment option than bank deposit. But company deposits give better return than Bank FD. Bank Fixed Deposit or FD is accrues 8.5% of yearly profits, depending on the bank's tenure and guidelines, which makes it's widely sought after and safe investment alternative. The minimum tenure of FD is 15 days and maximum

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tenure is 5 years and above. Senior citizens are entitled for exclusive rate of interest on Fixed Deposits. Strengths Low risk . Can take a loan against FD . FDs are flexible to liquidate.

Weaknesses Low return compare to equities Returns The rate of interest for Bank Fixed Deposits varies between 4 and 11 per cent, depending on the maturity period (duration) of the FD and the amount invested. Interest rate also varies between each bank. A Bank FD does not provide regular interest income, but a lump-sum amount on its maturity. Some banks have facility to pay interest every quarter or every month, but the interest paid may be at a discounted rate in case of monthly interest. The Interest payable on Fixed Deposit can also be transferred to Savings Bank or Current Account of the customer.

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PRECIOUS METALS

Gold and silver, the two most widely held precious metals, appeal to almost all kinds of investors for the following reasons. Historically, they have been good hedges against inflation. They are highly liquid with very low trading commissions. They are aesthetically attractive. They possess a high degree of 'moneyness. As against these advantages, investment in gold and silver has the following disadvantages. They do not provide regular current income. There is no tax advantage associated with them. There may be a possibility of being cheated. Due to the softening of their prices, gold and silver have not kept up with inflation in recent times.

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(3) EQUITY INVESTMENT Equity share is a share in the ownership of a companys assets and earnings. Companies usually issue equity when they require addition capital to fund their existing business or expand. At this point of time the company sells part of the ownership of the company to the public. Listed equities are generally highly liquid since they are traded in the stock exchange. An investor makes money from equity through dividends paid out by the company (from its profits) on a periodic basis as well as capital appreciation as reflected in the stock price, which fluctuates in the market. Hence investors returns are directly related to the performance of the companys business. Equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and capital gain as the value of the stock rises. It also sometimes refers to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup (a company being created or newly created). When the investment is in infant companies, it is referred to as venture capital investing and is generally understood to be higher risk than investment in listed going-concern situations.

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MUTUAL FUNDS

A mutual fund is simply a large group of people who lump their money together and give it to a management company to invest it on their behalf. A mutual fund manager proceeds to buy a number of stocks from various markets and industries. Depending on the amount you invest, you own a part of the overall fund. For the most part, investors should buy mutual funds as a long-term investment. The nice thing about mutual funds is that the objectives change from fund to fund. Mutual fund strategies include growth/aggressive, low risk, balanced, momentum, and many others. Your risk tolerance will play a big role in determining which fund you purchase - it all comes down to the old risk/return tradeoff. There are different mutual funds out there. Most of them can be purchased directly through the mutual fund company, CAMS, Karvy, a bank, an agent.

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:

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Different investment avenues are available to investors. Mutual funds also offer good investment opportunities to the investors. Like all investments, they also carry certain risks. The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions. The investors may seek advice from experts and consultants including agents and distributors of mutual funds schemes while making investment decisions. With an objective to make the investors aware of functioning of mutual funds, an attempt has been made to provide information in question-answer format which may help the investors in taking investment decisions The concept of investment in shares and securities of companies by individual investors has been prevalent in India since long. With the boom in the share market, the Mutual Funds play a big helping role to the companies as they pool the funds (savings) and resources of various individual investors, especially small investors and invest them in shares and securities of the companies. These funds act as an financial intermediary link between the investors and the companies. The investors generally find it difficult to directly invest in big companies because of their high share value. Also, due to lack of proper market knowledge, expertise and sufficiency of resources, these investors were always subjected to market risks. But these mutual funds are the organized bodies

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which function on behalf of such investors. They mobilises the savings and resources of so many investors under one roof by combining the skills of professionals. Due to the existence of mutual funds, the investors need not approach each company for investing their funds. They have to invest only a certain proportion of their funds. They are provided with various benefits as well like good return on their investments, tax benefits and so on. On the other hand, the companies also benefits as they are able to raise much greater capital at a much lower cost. Their work is reduced by the help of mutual funds. The first mutual fund to be established in India was the Unit Trust of India (UTI). It is the premier fund set up to mobilize the savings of the people and channelize them into productive corporate investments. For small investors, the UTI offers advantages of reduced risks, steady income and liquidity as well as knowledge of expert management because their funds are invested in a balanced and well distributed portfolio. Strengths No matter how much you invest, you get to own several companies. In other words, you get instant diversification. You can easily make monthly contributions.
Your money is being managed by a professional manager. Because of his/her

experience and knowledge, you should receive above average returns, at least in theory.

Weaknesses Fund managers take a slice of the profits for their work. This slice varies, but it can be quite high. You pay management fees whether the fund actually makes you money or not.

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(5) REAL ESTATE

Usually, the first thing you look at when you purchase a home is the design and the layout. But if you look at the house as an investment, it could prove very lucrative years down the road. For the majority of us, buying a home will be the largest single investment we make in our lifetime. Real estate investing doesn't just mean purchasing a house - it can include vacation homes, commercial properties, land (both developed and undeveloped). When buying property for the purpose of investing, the most

important factor to consider is the location. You have to look at the potential income a house can produce and how it compares to other houses in the area. There are

significant risks involved in holding real estate. Property taxes, maintenance expenses and repair costs are just some of the costs of holding the asset. Furthermore, real estate is considered to be very illiquid - it can sometimes be hard to find a buyer if you need to sell the property quickly.

Strengths Whether your objective is income or capital appreciation, real estate investing can help you achieve your goal. Mortgages allow you to borrow against the property up to three times the value.

Weaknesses Selling property quickly can be difficult. There are significant holding costs, especially if you are not residing in the property. Examples include property taxes, insurance, maintenance, etc.

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RESIDENTIAL HOUSE: For wealth tax purposes, the value of a residential property is reckoned at its historical cost and not at its present market price. Interest on loans taken for buying/constructing a residential house is tax deductible within certain limits. COMMERCIAL PROPERTY This may take the form of constructing a commercial complex or buying office or shop space in a commercial complex. The appeal of such an investment lies mainly in the form of regular rental income, which can be revised upward periodically. The disadvantage of such an investment is that it requires a large outlay and may require time and effort in managing AGRICULTURAL LAND Agricultural income is not taxable. However, it is included in the total income for determining the tax rate applicable to the non-agricultural income of the assessed. Loans are available for agricultural operations at a confessional rate.

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INSURANCE

In simple terms, insurance allows someone who suffers a loss or accident to be compensated for the effects of their misfortune. It lets you protect yourself against everyday risks to your health, home and financial situation.

LIFE INSURANCE Life Insurance Life insurance is income protection in the event of your death. The person you name as your beneficiary will receive proceeds from an insurance company to offset the income lost as a result of your death. Insurers (or underwriters) look carefully at decades worth of data to try to predict exactly how long you will live. Insurance underwriters classify individuals based on their height, weight, lifestyle (i.e. whether or not they smoke) and medical history (i.e. if they have had any serious health complications). All these variables will determine what rate class category a person fits into. Every person should insure themselves by finding out his Human Life Value. HLV (Human Life Value)

consider the income & expenses of the person. There are two very common kinds of life insurance: term insurance and ULIP. Term life insurance is usually where you have to pay regularly for a period up to which you want the insurance cover. It means if something happens to you then beneficiary will get the sum assured. But if nothing is happen to you for that period then you would not get anything .In ULIP there is sum assured & maturity amount. If anything happens to you, beneficiary would get the sum assured & if nothing is happens to you then at the time of maturity you will get the amount according to terms of the policy. Basically, the younger you are when you signup for this type of insurance, the cheaper your monthly payments will be. Most life insurance policies carry relatively little risk because insurance companies are usually stable and heavily regulated by the government. There are thousands of insurance

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agents and banks across India. The banks & insurance agents usually earn a huge commission on it. Even in the bank also sales force has to mainly focus on the selling of insurance policies. Strengths Life insurance provides excellent peace of mind - it eases concerns about what will happen to your loved ones if you die suddenly. A life insurance policy is a relatively low risk investment. Investment amount in Life Insurance gives you tax benefits. Weaknesses You cannot withdraw the amount which you have invested before the lock in period. There are high charges compare to other investment which ultimately reduce your rate of return. Value of investment can fluctuate depending on the financial markets.

Types of life insurance policy The common types of life insurance policies are: (1) Money Back Plan (2) Whole Life Assurance (3) Unit Linked Plan (4) Term Assurance (5) Immediate Annuity (6) Deferred Annuity (7) Riders

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(7) Postal Savings

Post office saving account is similar to a savings account in a bank. It is a safe instrument to park those funds, which you might need to liquidate fully or partially at very short notice. Post office savings accounts are especially suited for those living in rural and semi-rural areas where the reach of banks is very limited.

Income Tax Benefit Income tax relief is available on the amount of interest under the provisions of section 80L of Income Tax Act.

Benefit of Large Network Post offices have the largest service network in India. Post men do their job even in remote regions of the country. There are places where you could see old post men riding on bicycles and distributing letters, being awaited so eagerly by the kith and kin of the people who are far from their families and friends. Reach of post offices is of course greater than banks and this is the reason behind the government introducing something like saving accounts through post offices. They can take the benefit of having saving accounts right to the people who need them the most. If one is living in a remote corner, sometimes it is better to have a savings account in a post office rather than a bank. Just because post office and postman is closer to him.

They connect the rural areas with the rest of the country and also provide banking facilities in the absence of banks in the rural areas. Post Offices offer various types of accounts. These are:

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Savings Account Recurring Deposit Account Monthly Income Account Time Deposit Account

Post Offices also offer various saving and tax saving instruments such as:

National Savings Certificate Public Provident Fund Kisan Vikas Patra

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1.3 Types of investors & recommended Investment

Strategies
Investors in the Accumulation Phase: During this phase clients are looking to build wealth because their financial goals are quite some time away & investments can be made for the long term. For such clients following asset allocation may be appropriate: Asset Equity ,Insurance Gold Bank Deposits 15 to 30 % 5% Allocation 65 to 70%

Investors in the Transition Phase: During this phase, one or more of the clients goals are approaching & clearly in sight. If a salaried executive is planning to retire at 60 years of age , he should start preparing about 3 years in advance by gradually transitioning from growth to income generating investments. Likewise, a couple in their in mid 40s who have children approaching the age of higher education or marriage., should start converting some of their equity investments into income & cash funds to prepare for these financial commitments. Investors in the Distribution or Reaping Phase: This is the cashing out stage. For example if client has retired , investments need to generated the income for the post retirement life to meet the overall expenses .Following asset allocation is appropriate Asset Equity Bank FDs,Gold Allocation 15 to 30% & 65 to 70 %

Income fund Cash 5%

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Investors in the Inter-Generational Transfer Phase: Younger client up to their 50 would depend upon the insurance policy to take care of next generation in the event of death. For older investors who want to transfer the wealth the recommended investment strategies will depend upon the beneficiaries. If children are grown up then go for the combination of equity & debt .If the Grand children are young then go for the equity because they have the enough time available to grow investment. If one wants to donate it to charitable causes then he should go for the income product to get the regular income. Investor in the sudden wealth stage: When investor has got the sudden wealth first to keep the money in the liquid to get interest until appropriate decision is not taken. One should also take care of the effect of taxes on it because it may reduce the money.

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1.4 Comparison of different investment option from the Investor Perspective in terms of different factors
Types of Investment Return Risk Safety convenience volatility Liquidity invest ment horizon Equity Capital appreciation Bank Deposits Insurance Risk Cover Low - Low High Low Low Long term High Moderate High Long term Moderate High Moderate Long term Low High lowmoderate Low High Low High Long term Moderate Moderate High Flexible Income Low Low High Low High High Low High High low High or Long term Flexible

Investment Objective

Moderate PRECIOUS Inflation METALS Real Estate Mutual Fund Hedge Inflation Hedge Capital Growth, Income Postal Savings Tax Benefit Moderate Low - High Moderate Low - High Low High

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How to choose investment type from the available options? An investor should choose the investment according to his risk appetite & age.. A large part of financial planning is finding an asset each asset class. Distributing investments among various asset classes is called as an Asset Allocation. Every investor give percentage to each investment class like for any portfolio could have mix of 60% of equity, 30 % of debt & 10 % of gold.

Varying Risk Appetites based on life stage Extremely High early years of career High Just married. Moderate Married with children. Low Fag end of career, nearing retirement age. No risk post retirement

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RESEARCH METHODOLOGY
RESEARCH STATEMENT A study on identification of people awareness, investment and preference level and their investment criteria regarding various investment avenues namely bank deposits, bullion, equity, Government securities, mutual funds, real estate, insurance and bonds and debentures RESEARCH OBJECTIVES To know the people preference towards different investment avenues. To know the awareness and investment level of Bank Deposits, Equity, Mutual fund, Real estate Insurance. To know the purposes of investors for investing their funds namely in Bank Deposits, Equity, Mutual fund, Real estate, Insurance. To identify the risk return expectancy of investors. To identify key investment criteria. Research methodology Type of study Descriptive research design Sampling frame People of Baroda town and surrounding area Sampling design Convenience sampling method has been used. Sample size 100 respondents will be surveyed from the sampling area.

Sampling unit

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People of Baroda and surrounding area. Research instrument A structured questionnaire is used. Data collection method Primary data. Collected by conducting personnel interview of people. Secondary data. The secondary data collected by books and thorough internet. Data analysis tools Microsoft office is used for data typing and formatting

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3.

Data Analysis and Interpretation

1. AGE OF RESPONDENT

Age 20 to 35 35 to 50 50 to 65 above 65 Total

frequency percent 29 35 27 9 100 29 35 27 9 100

frequency
above 65

50 to 65 frequency 35 to 50

20 to 35 0 10 20 30 40

Interpretation Above data shows the age of respondents whose responses were under taken in the study.

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2. GENDER OF RESPONDENT

Gender Male Female Total

frequency percent 83 17 100 83 17 100

frequency
female

frequency male

20

40

60

80

100

Interpretation Above data shows the gender of respondents whose responses were under taken in the study

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3. STATUS OF RESPONDENT

Status Married Single Total

frequency percent 77 23 100 77 23 100

frequency

single

frequency married

20

40

60

80

100

Interpretation Above data shows the status of respondents whose responses were under taken in the study

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4. PROFESSION OF RESPONDENT

profession salaried business self employed profession total

frequency percent 47 31 47 31

22 100

22 100

frequency
self employed profession

business

frequency

salaried

10

20

30

40

50

Interpretation Above data shows the profession of respondents whose responses were under taken in the study

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5. INCOME OF RESPONDENT

Income 0-1.6 lakhs 1.6-3 lakhs 3-5 lakhs above 5 lakhs

frequency percent 18 27 45 10 18 27 45 10

Total

100

100

frequency
above 5 lakhs

3-5 lakhs frequency 1.6-3 lakhs

0-1 lakhs 0 10 20 30 40 50

Interpretation Above data shows the income of respondents whose responses were under taken in the study

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test

between Age and Income

Step: 1 This step is two tailed, because they prove that increase in the age equal to increase in income. Ho: 1 = 2 Ha: 1 2 Step: 2 Using the Z formula

Step: 3 Alpha has been specified as 0.05 Step: 4 By using the value of alpha, a critical Z0.5 = 1.645 can be determined. The decision rule is to reject the null hypothesis if the observed value of the test statistic, Z is less than 1.645 Step: 5 The sample data follow. AGE 1 = 44.90 S1 = 58.85 n1 = 100 Step: 6 Solving for Z given. Step: 7 The observed Z value of 7.08 is deep in the rejection region , well past the table value of Zc = 1.645 . Even with the small = 0.05 . the null hypothesis is rejected. 2 = 3.22 S2 = 1.63 n2 = 100 INCOME

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6. How many Investment Avenues are you aware of?

Awareness for bank deposits investment

Frequency Percent

Aware

94

94.0 6.0 100.0

Not aware 6 Total 100

Frequency
Not aware

Frequency Aware

20

40

60

80

100

Interpretation
Above data shows that 94% of respondents are aware regarding bank deposits investment where as only 6% are ignorant about it. Thus, it can be said that there is high awareness prevailing in people regarding bank deposits investment.

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 Awareness for Equity investment

Frequency Percent Aware 84 84.0 16.0 100.0

Not aware 16 Total 100

Frequency
Not aware

Frequency Aware

50

100

Interpretation Above data shows that 84% of people are aware regarding equity investment while 16% are not aware regarding it. Hence it indicates that high awareness is prevailing regarding equity investment in people.

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 Awareness for Mutual fund investment

Frequency Percent Aware 91 91.0 9.0 100.0

Not aware 9 Total 100

Frequency
Not aware

Frequency Aware

20

40

60

80

100

Interpretation Above data indicates that 91% respondents are aware regarding mutual fund investment while only 9% is ignorant about it, thus it can be said that there is high level of awareness prevailing in people regarding mutual fund investment.

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 Awareness for Insurance investment

Frequency Percent Aware 86 86.0 14.0 100.0

Not aware 14 Total 100

Frequency
Not aware

Frequency Aware

20

40

60

80

100

Interpretation Above data indicates that 86% respondents are aware regarding insurance investment while 14% are ignorant about it, hence it can be said that three is high level of awareness prevailing in people regarding insurance investment.

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 Awareness for Real estate investment

Frequency Percent Aware 79 79.0 21.0 100.0

Not aware 21 Total 100

Frequency
Not aware

Frequency Aware

20

40

60

80

100

Interpretation Above data shows that 79% respondents are aware regarding real estate investment where as 21% are not aware about it thus it can be said that most of the people are aware regarding real estate investment.

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 Awareness for Precious Metal

Frequency Aware Not aware Total 100 64 36

Percent 64.0 36.0

100.0

Frequency
Not aware

Frequency Aware

20

40

60

80

Interpretation Above data shows that 64% of respondents are aware regarding Precious Metal where 36% respondents are still not aware, hence it can be said that majority of the people are aware regarding Precious Metal.

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Awareness for Postal Savings investment

Frequency Percent Aware 67 67.0 33.0 100.0

Not aware 33 Total 100

Frequency
Not aware

Frequency Aware

20

40

60

80

Interpretation Above data shows that 67% respondents are aware regarding Postal savings investment where as 33% are ignorant about it, hence it can be said that majority of people are aware regarding Postal savings investment.

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7. Rank the investment options according to your preferences (i.e. Most

Preferable-1, Least preferable-7)

Aveneue Bank deposit Postal Savings Insurance Mutual Funds Precious Metals Equity Real Estate

Rank 269 348 361 407 506 407 502

Rank
Real Estate Equity Precious Metals Mutual Funds Insurance Postal Savings Bank deposit 0 100 200 300 400 500 600 Rank

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Interpretation -:
As per the above data we say that preference regarding the investment is lower the rank higher the preference. So peoples most preference in investment is Bank Deposit. Because BD give the safety and assured return. People give the lower rank for the Precious Metal because of there is a lack of constant revenue from dividends like stocks.

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8. What is your nature of investment ?

Nature of invstment Aggressive Moderate Conserved Total

frequency percent 19 58 23 100 19 58 23 100

frequency
conserved

moderate

frequency

aggressive

10

20

30

40

50

60

70

Interpretation Above data shows that 19% respondents are aggressive regarding investment where as 58% are moderate and 23% are conserved about it, hence it can be said that majority of people are moderate regarding investment.

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9. What percentage of saving you are invested ?

saving % 0 to 10 10 to 20 20 to 30 above 30 Total

frequency percent 17 37 34 12 100 17 37 34 12 100

frequency
above 30

20 to 30 frequency 10 to 20

0 to 10 0 10 20 30 40

Interpretation Above data shows that 37% respondent are willing to saving 10-20% of their income.

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10.

Are you investing your money only for tax purposes ?

Frequency Percent Yes No 60 40 60.0 40.0 100.0

Total 100

Frequency

No

Frequency Yes

10

20

30

40

50

60

70

Interpretation Above data shows that 60% respondents are investing their money only for tax purposes.

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If , No then what purpose?

Frequency Percent Saving Wealth Build-up Future Planning Total 12 8 20 40 30 20 50 100

Frequency
Future Planning

Wealth Build-up

Frequency

Saving

10

15

20

25

Interpretation Above data shows that 20 respondents are investing for future planning.

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11. For what time period do you normally invest?

Time period less than 6 months 6 months to 1 year 1 year to 3 years 3 years to 5 years more than 5 years Total

frequency percent 7 19 26 31 17 100 7 19 26 31 17 100

frequency
more than 5 years 3 years to 5 years 1 year to 3 years 6 months to 1 year less than 6 months 0 5 10 15 20 25 30 35

frequency

Interpretation Above data shows that 31% respondent are investing their money for 3-5 years

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FINDINGS This study has brought following findings. Most of the people are aware regarding investment avenues namely bank deposits, equity investment, mutual fund, insurance and real estate. Most of the people are investing their fund in bank deposits and insurance. Majority of people are investing their fund in mutual fund, real estate and equity. Return, safety and risk are considered as a most important investment parameter Safety and surety of return are together key objective behind investment in bank deposits, insurance and Postal Savings. Even few people invest in equity for getting high return with safety of funds and/or surety of return., a key objective behind equity investment is only high return Though there are varieties of objectives behind mutual fund investment, the key objective found is high return with safety of fund and surety of return. The key reason found behind real estate investment is safety of funds and high return Majority of people believe that Bank Deposit investment is better investment avenue compare to other investment avenues. Majority of people prefer to take moderate risk to earn return on their investment. Bank deposit is the best investment avenue followed by Postal savings second best, Insurance third best, equity investment fourth best, Mutual fund fifth best, Real estate sixth best, Precious Metals seventh best.

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CONCLUSION Though mutual fund investment, real estate investment and equity investment are growing rapidly now a day, bank deposits are still dominating the field of investment. Mutual fund has emerged as and most convincing investment avenue as it shows high potential for high return with surety of return and safety of funds where as growth of real estate comes next to mutual fund and bank deposits on a third position due to its popularity as safe avenue yielding assured return. Risk, return and safety are still acting as a crucial parameter for investment. High awareness is prevailed for equity investment with bank deposits, mutual fund and insurance but compare to these popular avenues investment in equity is lesser, in other word ratio of awareness to investment is lesser of equity compare to leading investment avenue namely bank deposits, mutual fund, real estate and insurance.

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RECOMMENDATIONS Return, safety, risk and marketability should be given more importance for any investment avenue. Investors should invest their funds in mutual funds and real estate for getting high return with safety of funds.

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Annexure
QUESTIONARRIE
Name :1. Age
20-35 35-50 50-65 Above 65

2. Gender
Male Female

3. Status
Married Single

4. Profession
Salaried Business Self Employed

5. Income
0-1.6L 1.6-3.0L 3.0-5.0L above 5.0L

6. How many Investment Avenues are you aware of?

1. 2. 3. 4. Bank Deposits Postal savings Insurance Mutual Funds 5. Precious metal 6. Equity 7. Real estate

7. Rank the investment options according to your preferences (i.e. Most

Preferable-1, Least preferable-7)
1. 2. 3. 4. Bank Deposits Postal savings Insurance Mutual Funds 5. Precious metal 6. Equity 7. Real estate

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8. What is your nature of investment ? Aggressive Moderate Conserved

9. Are you investing your money only for tax purposes ?

Yes No

If , No then what purpose? Saving 10. Wealth-build up Future Planning

What percentage of saving you are invested ?

Below 10% 10-20 % 20-30 % Above 30 %

11.

For what time period do you normally invest?

Less than 6 months 6 months to 1 year 1 year to 3 years 3 years to 5 years More than 5 years

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BIBLIOGRAPHY BOOKS Ken Black (2009),Business Statistics, Wiley india edition. Cooper, D.R. & Schindler, P.S. (2007), Business Research Methods, Tata McGraw Hill, New Delhi.

WEBSITES http://www.wikipedia.com http://www.investmentz.co.in http://www.sharekhan.com http://www.rbi.com http:// www.sebi.com http://www.nseindia.com http//www.investopedia.com. http//www.Moneycontrol.com. http//www.Yahoo.com. http//www.rediffmail.com.

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