Empirical Analysis of Risk and Return On Securities

EMPIRICAL ANALYSIS OF RISK AND RETURN ON SECURITIES
Name Registration Number Name of the Programme Address for Correspondence
: Mary Alice. A : 421020762 : PGDM : #30, Mestrypalya, Dr. Shivaramkaranth Nagar Post, Bangalore-77.
Title of the project

A STUDY ON EMPIRICAL ANALYSIS OF RISK AND RETURN ON SECURITIES THROUGH PARIMALA STOCK MEMBERS BANGALORE STOCK EXCHANGE
Name of the Project Guide Designation and Address
: :
RAMAIAH INSTITUTE OF MANAGEMENT STUDIES
A STUDY ON EMPIRICAL ANALYSIS OF RISK AND RETURN ON SECURITIES THROUGH PARIMALA STOCK MEMBERS BANGALORE STOCK EXCHANGE
The present study deals with the risk and return on securities and empherical analysis of the risk and return on securities of various companies traded on the Bombay Stock Exchange. The various aspects to be responsible for the risk and return of securities and various measures of risk and return are discussed. Empherical analysis reveals that risk and return is measured by using statistical tools like Beta, Standard deviation, mean and coefficient of correlation on Daily and monthly closing values of market indices namely Sensex, Nifty. Risk and return of individual securities of various companies has also been analyses in BSE.
STATEMENT OF THE PROBLEM: Investors perception about the risk and return is an important aspect in the investment of securities. The investor must know his risk ability in the investment. The investor must know the return of the securities before investment is made. Hence, the study entitled analytical study on the risk and return of securities traded in NSE Sensex has been carried out from the point of view of investors to determine the risk and return of the securities of various companies to meet objective of the investor.
AIM: The investor must know his risk ability in the investment. The investor must know the return of the securities before investment is made.
OBJECTIVE OF THE STUDY: To know monthly rate of return of the short listed companies. 1. To find expected rate of return of the short listed companies. 2. To calculate standard deviation of the short listed companies. 3. To analyze risk and expected rate of return of A group securities of NSE.
KEY QUESTIONS / RESEARCH QUESTIONS: 1. How risk has impact on return or how risk and return is correlated? 2. Which is the correct time to make investment? 3. What is the degree of risk the security has involved? 4. What is the perception of investors towards the NSE transaction? 5. Impact of diversification on investors return?
HYPOTHESIS/KEY QUESTIONS:
SCOPE OF THE STUDY: This project covers the selected companies which are in NSE Sensex. The share prices of these companies are taken on monthly basis for a period. Before making in the investment in securities the investor must know the expected return and risk of the securities. This study gives the expected return and risk associated with the securities. This will helpful to the investors while investing in the securities.
RESEARCH METHODOLOGY:
Literature Study:
The literature survey enabled the researcher to understand the concept of risk and return on securities deeply, vividly and holistically. It also high lightened the fact that what work on the stock exchanges has already gone into and what remains to be done. The operating environment of a business comprises of both external and internal environment. The risk associated with the efficiency with which a business conducts its operations within a broader internal environment imposed on it is known as internal business risk. On the contrary, external business risk is due to the operating conditions imposed upon the firm by the circumstances beyond its control. Moreover, the presence of debt capital in the capital structure creates fixed payments in the form of interest/ preference dividend. It is a compulsory commitment to pay fixed interest/ dividend charges, whether a firm earns profit or incurs loss. This fixed interest payments cause variability in EPS. All this demands sustainable development of an efficient analysis of risk and return on securities to improve the overall profit-position in the stock exchanges. For this purpose, books, articles, reports, newspapers, news bulletins, journals, magazines, annual reports, CD-ROM, and microfilms have been perused. A sizeable number of above experts have been referred to. It was found that many experts, luminaries,
professionals, academicians and industry people have carried out research and gave the useful findings on this topic. Hence the present topic has got enough research potential.
Following variables are used for analysis, Monthly closing values of NSE securities Nifty index points Trading volume of NSE Data related to above stated variable are collected for the period ranging from march 2010 to January 2011.

The study is descriptive in nature. The main purpose of descriptive research is to describe the state of view as it exists at present. It is a fact finding investigation. The descriptive research deals with demographic characteristics. For these dissertation 30 companies has been selected to conduct the study. The study considers the financial year of 2010-11. Only ten months duration has been taken, its starts from April 2010 to January 2011.
Sources of Data
Data collected for the purpose of study is ; Primary data: the data has been collected from the dealer of the share khan ltd, Secondary data: the data has been collected from the newspapers, websites etc. Basically, the data used in this study are secondary in nature. The monthly closing share prices of companies. The dividend issued by the company. These datas are collected in the form of secondary in nature.
PROPOSED CONTENT OF DISSERTATION:
Chapter 1: Introduction Chapter 2: Research Design Chapter 3: Company Profile Chapter 4: Analysis of data Chapter 5: summary of findings, suggestions, SWOT analysis & Conclusion
WORK PLAN:
The data have been analyzed with the help of statistical tools such as average mean, standard deviation, expected rate of return Wherever necessary, tables, charts, diagrams, graphs, were resorted to make the data understandable, intelligible, and amenable.
Limitations of the study: This project covers only selected companies of NSE Sensex. The closing share prices of selected companies were taken only for the time period. Only A group securities of NSE Sensex are taken in this study. Due to time constraint in depth study will not be possible.

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EMPIRICAL ANALYSIS OF RISK AND RETURN ON SECURITIES

Name Registration Number Name of the Programme Address for Correspondence

Title of the project

Name of the Project Guide Designation and Address

RAMAIAH INSTITUTE OF MANAGEMENT STUDIES