CHAPTER 1 INTRODUCTION

1.1 General Introduction about the sector

The time one talks about stock market, another word also clicks and that

is risk. People have lost their millions in the stock market. This is a place of

gambling for those who don’t know where to invest. The market behaves

differently to differently people. The speculators are one who loose most of the

money. There are hedgers who keep risk in their mind but try to minimize it by

using different strategies. Though hedging doesn’t always give good returns but it

helps one to take out his money with remarkable profits.

Lot of analysis is required to decide in which instrument one should invest. Many

people think that particular time is the best time to invest but the fact is that it

depends on the investor and his capacity to take risk and invest not the time.

Before stepping into investment process one should get the entire knowledge

about the financial instrument options available in the market and the risk factor

involved with the instrument and the estimated returns the investor would

probably get.

This project will help the people in getting lot of their answers related to

investment options and the ways to analysis the market. The data in the project

can also help the company in making the strategy for potential investor’s.

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1.2 Industrial Profile

Stock Market

A stock market is a public market for the trading of company stock and

derivatives at an agreed price; these are securities listed on a stock exchange as

well as those only traded privately. The stock market is one of the most important

sources for companies to raise money. This allows businesses to be publicly

traded, or raise additional capital for expansion by selling shares of ownership of

the company in a public market.

The size of the world stock market was estimated at about $36.6 trillion US at the

beginning of October 2008. The total world derivatives market has been

estimated at about $791 trillion face or nominal value, 11 times the size of the

entire world economy.

Stock Exchange

A stock exchange, (formerly a securities exchange) is a corporation or mutual

organization which provides "trading" facilities for stock brokers and traders, to

trade stocks and other securities. Stock exchanges also provide facilities for the

issue and redemption of securities as well as other financial instruments and

capital events including the payment of income and dividends. The securities

traded on a stock exchange include: shares issued by companies, unit trusts,

derivatives, pooled investment products and bonds. To be able to trade a

security on a certain stock exchange, it has to be listed there. Companies that

are not listed are sold as short for Over-The-Counter.

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Share

A share is a unit of account for various financvial instrument including stocks,

bonds and mutual funds.

The total capital of a company may be divided into small units called shares. For

example, if the required capital of a company is Rs. 5, 00,000 and is divided into

50,000 units of Rs. 10 each, each unit is called a share of face value Rs. 10. A

share may be of any face value depending upon the capital required and the

number of shares into which it is divided. The holders of the shares are called

share holders. The shares can be purchased or sold only in integral multiples.

Share consists of Equity share and preference share. Preference shareholder

entitled to dividend prior to equity holder.

Stocks

The shares may be fully paid or partly paid. A company may consolidate and

convert a number of its fully paid up shares to form a single stock. Stock being

one lump amount can be purchased or sold even in fractional parts.

Debentures

The term Debenture is derived from the Latin word ‘debere’ which means ‘to owe

a debt’. A debenture is a loan borrowed by a company from the public with a

guarantee to pay a certain percentage of interest at stated intervals and to repay

the loan at the end of a fixed period.

Dividend

The profit of the company distributed among the share holders is called Dividend.

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Each share holder gets dividend proportionate to the face value of the shares

held. Dividend is usually expressed as a percentage.

Depository

A depository is like a bank wherein the deposits are securities (viz. shares,

debentures, bonds, government securities, units etc.) in electronic form. There

are two type of depository: National Security Depository Ltd and Central

Depository Services Ltd.

Dematerialization

Dematerialization is the process by which physical certificates of an investor are

converted to an equivalent number of securities in electronic form and credited to

the investor’s account with his Depository Participant (DP).

Primary and secondary market

Primary market

The primary market provides the channel for sale of new securities. Primary

market provides opportunity to issuers of securities; Government as well as

corporate, to raise resources to meet their requirements of investment and/or

discharge some obligation.

They may issue the securities at face value, or at a discount/premium and these

securities may take a variety of forms such as equity, debt etc. They may issue

the securities in domestic market and/or international market.

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Secondary Market

Secondary market refers to a market where securities are traded after being

initially offered to the public in the primary market and/or listed on the Stock

Exchange. Majority of the trading is done in the secondary market. Secondary

market comprises of equity markets and the debt markets. For the general

investor, the secondary market provides an efficient platform for trading of his

securities. For the management of the company, Secondary equity markets

serve as a monitoring and control conduit—by facilitating value-enhancing control

activities, enabling implementation of incentive-based management contracts,

and aggregating information (via price discovery) that guides management

decisions.

Products in the Secondary Markets

Following are the main financial products/instruments dealt in the Secondary

market which may be divided broadly into Shares and Bonds:

Shares

Equity Shares: An equity share, commonly referred to as ordinary share,

represents the form of fractional ownership in a business venture.

Rights Issue/ Rights Shares: The issue of new securities to existing

shareholders at a ratio to those already held, at a price. For e.g. a 2:3 rights

issue at Rs. 125, would entitle a shareholder to receive 2 shares for every 3

shares held at a price of Rs. 125 per share.

Bonus Shares: Shares issued by the companies to their shareholders free of

cost based on the number of shares the shareholder owns.

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Preference shares: Owners of these kinds of shares are entitled to a fixed

dividend or dividend calculated at a fixed rate to be paid regularly before dividend

can be paid in respect of equity share. They also enjoy priority over the equity

shareholders in payment of surplus. But in the event of liquidation, their claims

rank below the claims of the company’s creditors, bondholders/debenture

holders.

Cumulative Preference Shares: A type of preference shares on which dividend

accumulates if remained unpaid. All arrears of preference dividend have to be

paid out before paying dividend on equity shares.

Cumulative Convertible Preference Shares: A type of preference shares

where the dividend payable on the same accumulates, if not paid. After a

specified date, these shares will be converted into equity capital of the company.

Bond

Bond is a negotiable certificate evidencing indebtedness. It is normally

unsecured. A debt security is generally issued by a company, municipality or

government agency. A bond investor lends money to the issuer and in exchange,

the issuer promises to repay the loan amount on a specified maturity date. The

issuer usually pays the bond holder periodic interest payments over the life of the

loan. The various types of Bonds are as follows:

Zero Coupon Bond: Bond issued at a discount and repaid at a face value. No

periodic interest is paid. The difference between the issue price and redemption

price represents the return to the holder. The buyer of these bonds receives only

one payment, at the maturity of the bond.

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Convertible Bond: A bond giving the investor the option to convert the bond into

equity at a fixed conversion price.

Treasury Bills: Short-term (up to one year) bearer discount security issued by

government as a means of financing their cash requirements.

Short-Term Financial Options Available For Investment

Savings Bank Account is often the first banking product people use, which

offers low interest (4%-5% p.a.), making them only marginally better than fixed

deposits.

Money Market or Liquid Funds are a specialized form of mutual funds that

invest in extremely short-term fixed income instruments and thereby provide easy

liquidity. Unlike most mutual funds, money market funds are primarily oriented

towards protecting your capital and then, aim to maximize returns. Money market

funds usually yield better returns than savings accounts, but lower than bank

fixed deposits.

Fixed Deposits with Banks are also referred to as term deposits and minimum

investment period for bank FDs is 30 days. Fixed Deposits with banks are for

investors with low risk appetite, and may be considered for 6-12 months

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investment period as normally interest on less than 6 months bank FDs is likely

to be lower than money market fund returns.

Long-term financial options available for Investment

Post Office Savings: Post Office Monthly Income Scheme is a low risk saving

instrument, which can be availed through any post office. It provides an interest

rate of 8% per annum, which is paid monthly. Minimum amount, which can be

invested, is Rs. 1,000/- and additional investment in multiples of 1,000/-.

Maximum amount is Rs. 3,00,000/- (if Single) or Rs. 6,00,000/- (if held Jointly)

during a year. It has a maturity period of 6 years. Premature withdrawal is

permitted if deposit is more than one year old. A deduction of 5% is levied from

the principal amount if withdrawn prematurely.

Public Provident Fund: A long term savings instrument with a maturity of 15

years and interest payable at 8% per annum compounded annually. A PPF

account can be opened through a nationalized bank at anytime during the year

and is open all through the year for depositing money. Tax benefits can be

availed for the amount invested and interest accrued is tax-free. A withdrawal is

permissible every year from the seventh financial year of the date of opening of

the account and the amount of withdrawal will be limited to 50% of the balance at

credit at the end of the 4th year immediately preceding the year in which the

amount is withdrawn or at the end of the preceding year whichever is lower the

amount of loan if any.

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Company Fixed Deposits: These are short-term (six months) to medium-term

(three to five years) borrowings by companies at a fixed rate of interest which is

payable monthly, quarterly, semiannually or annually. They can also be

cumulative fixed deposits where the entire principal along with the interest is paid

at the end of the loan period. The rate of interest varies between 6-9% per

annum for company FDs. The interest received is after deduction of taxes.

Bonds: It is a fixed income (debt) instrument issued for a period of more than

one year with the purpose of raising capital. The central or state government,

corporations and similar institutions sell bonds. A bond is generally a promise to

repay the principal along with a fixed rate of interest on a specified date, called

the Maturity Date.

Mutual Funds: These are funds operated by an investment company which

raises money from the public and invests in a group of assets (shares,

debentures etc.), in accordance with a stated set of objectives. It is a substitute

for those who are unable to invest directly in equities or debt because of

resource, time or knowledge constraints. Benefits include professional money

management, buying in small amounts and diversification. Mutual fund units are

issued and redeemed by the Fund Management Company based on the fund's

net asset value (NAV), which is determined at the end of each trading session.

NAV is calculated as the value of all the shares held by the fund, minus

expenses, divided by the number of units issued. Mutual Funds are usually long

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term investment vehicle though there some categories of mutual funds, such as

money market mutual funds which are short term instruments. Types of mutual

funds are discussed below:

Derivatives

Derivative is a product whose value is derived from the value of one or more

basic variables, called underlying. The underlying asset can be equity, index,

foreign exchange (forex), commodity or any other asset. Derivative products

initially emerged as hedging devices against fluctuations in commodity prices and

commodity-linked derivatives remained the sole form of such products for almost

three hundred years. The financial derivatives came into spotlight in post-1970

period due to growing instability in the financial markets. However, since their

emergence, these products have become very popular and by 1990s, they

accounted for about two-thirds of total transactions in derivative products.

Types of Derivatives

Forwards: A forward contract is a customized contract between two entities,

where settlement takes place on a specific date in the future at today’s pre-

agreed price.

Futures: A futures contract is an agreement between two parties to buy or sell

an asset at a certain time in the future at a certain price. Futures contracts are

special types of forward contracts in the sense that the former are standardized

exchange-traded contracts, such as futures of the Nifty index.

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Options: An Option is a contract which gives the right, but not an obligation, to

buy or sell the underlying at a stated date and at a stated price. While a buyer of

an option pays the premium and buys the right to exercise his option, the writer

of an option is the one who receives the option premium and therefore obliged to

sell/buy the asset if the buyer exercises it on him. Options are of two types -

Calls and Puts options:

‘Calls’ give the buyer the right but not the obligation to buy a given quantity of the

underlying asset, at a given price on or before a given future date.

‘Puts’ give the buyer the right, but not the obligation to sell a given quantity of

underlying asset at a given price on or before a given future date.

Presently, at NSE futures and options are traded on the Nifty, CNX IT, BANK

Nifty and 116 single stocks.

Warrants: Options generally have lives of up to one year. The majority of options

traded on exchanges have maximum maturity of nine months. Longer dated

options are called Warrants and are generally traded over-the counter.

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1.3 Project Objective

Main Objective

1. To know the investors preference in the financial instrument

2. To understand the human psychology of investment wrt Recession/Boom

3. To know which is the best instrument to invest in during Recession

Specific Objective

1. To know how many people are risk takers?

2. To know the capacity of the investors to invest

3. To know the stock market functioning

4. To know what factors affect the stock index

5. To understand the valuation of the shares and the company

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 CHAPTER 2 PROFILE OF THE ORGANIZATION

2.1 Company background

Sharekhan is one of the leading retail broking House of Sharbatilal Shantilal

Kantilal Ishwarlal Group which was running successfully since 1922 in the

country. It is the retail broking arm of the Mumbai-based SSKI Group, which has

over eight decades of experience in the stock broking business. Sharekhan

offers its customers a wide range of equity related services including trade

execution on BSE, NSE, Derivatives, depository services, online trading,

investment advisory, Mutual Fund Advisory etc.

The firm’s online trading and investment site - www.sharekhan.com -

was launched on Feb 8, 2000. The site gives access to superior content and

transaction facility to retail customers across the country. Known for its jargon-

free, investor friendly language and high quality research, the site has a

registered base of over two lakh customers. The number of trading members

currently stands More than 6 Lacs. While online trading currently accounts for

just over 8 per cent of the daily trading in stocks in India, Sharekhan alone

accounts for 32 per cent of the volumes traded online.

The content-rich and research oriented portal has stood out among its

contemporaries because of its steadfast dedication to offering customers best-of-

breed technology and superior market information. The objective has been to let

customers make informed decisions and to simplify the process of investing

in stocks.

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 On April 17, 2002 Sharekhan launched Speed Trade, a net-based

executable application that emulates the broker terminals along with host of other

information relevant to the Day Traders. This was for the first time that a net-

based trading station of this caliber was offered to the traders. In the last six

months Speed Trade has become a de facto standard for the Day Trading

community over the net.

On October 01, 2007 Sharekhan again launched his another integrated

Software based product Trade Tiger, a net-based executable application that

emulates the broker terminals along with host of other information relevant to the

Day Traders. It has another quality which differs it from other that IT HAS THE

COMBINED TERMINAL FOR EQUITY (shares) AND COMMODITIES (Trading

in gold & silver) BOTH.

2.2 Present status of the organization

Share khan is the retail broking arm of SSKI, an organization with more than

eight decades of trust & credibility in the stock market. It is India's leading retail

financial Services Company with We have 704 share shops across 234 cities in

India. We have the largest chain of retail share shops in India. There are 6

Branches in Delhi:

 Rajori Garden
 Barakhamba
 Lajpat Nagar
 Vasant kunj
 Mayur Vihar

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  Pitampura
Branch - Head Office

A-206, Phoenix House, 2nd Floor, Senapati Bapat Marg, Lower Parel, Mumbai-

400 013.

Telephone No: 67482000

Email: myaccount@sharekhan.com

Key Officials Designation

Chairman : Mr. Shripal Morakhia

Chief executive officer : Mr. Tarun Shah

Head of Research : Mr. Pathik Gandotra

Vice President of Equity Derivatives : Mr. Rishi Kohli

Vice President of Research : Mr. Nikhil Vora

Online Sales Head : Mr. Kaliyan Raman

DP Head : Mr. Jason Pandey and Mr. Pradeep

Cluster Head : Mr. Hemendra Aggarwal

Regional Sales Manager : Mr. Amit pal Singh and Mr. Maneet Rastogi

Reasons to Choose Sharekhan Limited:

 Trade in all–segments: Buy & sell on the BSE or NSE (cash and F&O) and

trade in commodities on the Multi Commodity Exchange & the NCDEX

 IPOs and mutual funds: Apply online for IPOs and all mutual funds through

your Sharekhan account .Research reports like mutual fund Top Picks, funds

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 for volatile times and IPO flash will be help you in taking informed investment

decisions.

 Timely Advice: Make informed decisions with expert advice, investment calls

and live market commentary.

 Tailor made investment products: Set up a systematic investment plan

(SIP) in stocks or mutual funds or invest in our top picks Basket picked by our

research team.

 Freedom from paperwork: Integrated trading bank and Demat account pay

in & payout of securities) with digital contracts removes all paperwork.

 Instant credit and transfer: Instant transfer of funds from bank accounts of

your choice to your ShareKhan trading account.

 Real –time Portfolio Tracking: benefit from real time information of your

investment & current portfolio value.

2.3 Sharekhan Services

1. Equities & Derivatives:--Comprehensive services for independent

investors, active traders & Non-Resident Indians.

2. Sharekhan equity analysis:--Premium research on 401+ companies

updated daily.

2.4 Sharekhan Product

Classic Account:

This account allows the client to trade through the website and is suitable for the

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retail investor who is risk-averse and hence prefers to invest in stocks or who do

not trade too frequently.

It allows investor to buy and sell stocks online along with the following features

like multiple watch lists, Integrated Banking, De-mat and Digital contracts, Real-

time portfolio tracking with price alerts and Instant money transfer.

Features:

1) Online trading account for investing in Equity and Derivatives via

www.sharekhan.com

2) Live Terminal and Single terminal for NSE Cash, NSE F&O, BSE & Mutual

Funds.

3) Integration of On-line trading, Saving Bank and De-mat Accounts.

4) Instant cash transfer facility against purchase & sale of shares.

5) Competative transaction charges.

6) Instant order and trade confirmation by E-mail.

7) Streaming Quotes (Cash & Derivatives).

8) Personlized market watch.

9) Single screen interface for Cash and derivatives and more.

10)Provision to enter price trigger and view the same online in market watch.

Trade Tiger

TRADE TIGER is an internet-based software application which is the

combination of EQUITY & COMMODITIES, that enables you to buy and sell

share and well as commodities item instantly. It is ideal for every client of

17
SHAREKHAN LTD.

Features:

11)Integration of EQUITY & COMMODITIES MARKET.

12)Instant order Execution and Confirmation.

13)Single screen trading terminal for NSE Cash, NSE F&O & BSE &

Commodities.

14)Technical Studies.

15)Multiple Charting.

16)Real-time streaming quotes, tic-by-tic charts.

17)Market summary (Cost traded scrip, highest value etc.)

18)Hot keys similar to broker’s terminal.

19)Alerts and reminders.

20)Back-up facility to place trades on Direct Phone lines.

21)Live market debts.

Dial-N-Trade

Along with enabling access for your trade online, the CLASSIC and

TRADE TIGER ACCOUNT also gives you our Dial-n-trade services. With this

service, all you have to do is dial our dedicated phone lines which are 1800-22-

7500, 3970-7500.

PORTFOLIO MANAGEMENT SERVICES

Sharekhan is also having Portfolio Management Services for Exclusive clients.

1. PROPRIME - Research & Fundamental Analysis.

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Ideal for investors looking at steady and superior returns with low to medium risk

appetite. This portfolio consists of a blend of quality blue-chip and growth stocks

ensuring a balanced portfolio with relatively medium risk profile. The portfolio will

mostly have large capitalization stocks based on sectors & themes that have

medium to long term growth potential.

2. PROTECH - Technical Analysis.

Protech uses the knowledge of technical analysis and the power of derivatives

market to identify trading opportunities in the market. The Protech lines of

products are designed around various risk/reward/ volatility profiles for different

kinds of investment needs.

 THRIFTY NIFTY: Nifty futures are bought and sold on the basis of an

automated trading system that generates calls to go long/short. The exposure

never exceeds value of portfolio i.e. there is no leveraging; but being short in

Nifty allows you to earn even in falling markets and there by generates linear

 BETA PORTFOLIO: Positional trading opportunities are identified in the

futures segment based on technical analysis. Inflection points in the

momentum cycles are identified to go long/short on stock/index futures with 1-

2 month time horizon. The idea is to generate the best possible returns in the

medium term irrespective of the direction of the market without really

leveraging beyond the portfolio value. Risk protection is done based on stop

losses on daily closing prices.

 STAR NIFTY: Trailing Stops Momentum trading techniques are used to spot

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 short term momentum of 5-10 days in stocks and stocks/index futures.

Trailing stop loss method of risk management or profit protection is used to

lower the portfolio volatility and maximize returns. Trading opportunities are

explored both on the long and the short side as the market demands to get

the best of both upwards & downward trends.

3. PROARBITRAGE - Exploit price analysis

- ONLINE IPO'S AND MUTUAL FUNDS ADVISORY IS AVAILABLE.

CHARGE STRUCTURE

1) Pre Paid Account: -

-Advance Amount which will be fully adjusted against your brokerage you paid in

One year.

Following Schemes Are Available: - Brokerage will be charged

– 2,000/- Scheme: - 0.070 / 0.40 %

– 6,000/- Scheme: - 0.025 / 0.25 %

– 18,000/- Scheme: - 0.040 / 0.20 %

– 30,000/- Scheme: - 0.030 / 0.18 %

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– 60,000/- Scheme: - 0.020 / 0.15 %

– 1,00,000/- Scheme: - 0.015 / 0.10 %

2) Normal Account: -

Cash Trading : - 0.50% or 10 Paisa per share. Min. Rs.16/- per script.

Margin Trading : - 0.10% or 5 Paisa per share.

Future & Options : - 0.10% (First Leg)

0.02% (2nd Leg if square off same day)

0.10% (2nd Leg)

DEPOSITORY CHARGES

Account Opening Charges Rs. 750

Rs. NIL first year

Annual Maintenance Charges Rs. 300 Per annum from second year onward

Minimum Brokerage Intra Day per Share:

5 Paisa each leg (buy or sell) for Intra-day Trades (For e.g. on Rs 20 Scrip,

brokerage @ 0.10% = 2 paisa, but there is a min. chargeable amount of 5 paisa).

Minimum Delivery Handling Charges:

10 Paisa for Delivery Trades (buy and sell) (For e.g. on a Rs 10 Scrip, brokerage

21
@ 0.50% = 5 paisa, but there is a min. chargeable amount of 10 paisa). Rs 16/-

per Scrip (brok. per Scrip will be charged for the selling of shares). (For e.g. if a

customer sells 100 shares of SAIL, Delivery value = 2200, brokerage @ 0.5% =

Rs 11, but the min chargeable amt per scrip per day = Rs 16), so additional Rs

5/- will be charged as Min delivery handling charges).

Minimum Margin of Rs.5000/- is Required for Account Opening.

Annual Maintenance Charges will NIL for 1st year and Rs. 300/- from 2nd year.

EXPOSURE:

It is the limit or turnover that a depository participant allows to its

client to take positions at a time on margin money in his account. Sharekhan

offers an Exposure of 4 to 6.6 times of margin money in cash. In Futures and

Options it offers 10 times of margin money.

Sharekhan also offers exposure of Trading+two days on delivery, it means that a

client is not asked to deposit margin due on his account for next two days and

thereafter if it again allows a client to hold order for additional 3 days and charges

nominal interest @14% p.a. on the same. On sixth day order will be squared off if

margin money is not deposited.

TIE UPS: Tie up with eleven banks i.e. HDFC Bank Ltd, ICICI Bank, Oriental

Bank Of Commerce, IDBI Bank Ltd, Citi Bank, United Bank of India, Axis bank,

Bank of India, Indusland Bank, Centurian Bank of Punjab for online money

transfer. If you are having bank a/c in one of them, you can transfer the funds

and withdraw the funds online from your trading a/c at anytime.

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DOCUMENTS REQUIRED FOR ACCOUNT OPENING: -

Photo ID Proof Residence Proof (Permanent or Correspondence)

23
· Pan Card (Mandatory) · Passport (valid)

· Passport · Voter's ID

· Driving License · Driving License (valid)

· Voter's ID · Letter verified by Bank

· MAPIN UIN Card · Bank Statement & Bank Passbook (latest)

· Telephone Bill (latest)

· Electricity Bill (latest)

· Ration Card

· Rent Agreement (Noterised)

· Latest Insurance Policy with Bond Copy

· Letter from Employer (Only in case of Army People)

--2 Photographs (Passport size & front face)

--1 Cheque of Rs. 750/- in the favor of SHAREKHAN LTD.

CHAPTER 3 DISCUSSION ON TRAINING

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3.1 Project

Project is to Analysis and do research of the competitors of Sharekhan Securities

Pvt. Ltd. is the India largest and leading online share trading company. I will

analyze that how and why Sharekhan is on the top by comparing it with the other

major players of the online trading. Sharekhan deals in Products i.e. Equity,

Derivatives, Mutual Funds, IPO’s. We can compare the advantage of Sharekhan

by above products. Major competitors of Sharekhan are Indiabulls, HDFC,

Icicidirect.Com India infoline etc. We will analyze all those Companies strategies,

their schemes, their services, their customer care

The project that is assigned to me is to Analysis of Competitors and to break their

customers. Sharekhan is a retail broking arm of SSKI, which offers online share

trading facility. The main facility that the company is providing is 3 in 1 account

facility and the accounts are Demat Account, Trading Account and IPO account.

3.2 Achievements

As above mentioned my OJT target is to achieve 24 Demat accounts in the next

6 months. Now for this month my target is to open 4 Demat accounts. Out of

these 4 Demat accounts I have opened 21 Demat account. The only reason is for

this is now the market is falling and people are not taking any risk, so they are

not interested in opening Demat accounts now.

3.3 Limitations

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Limitations are the limits that bind our area of working. There are various types of

limitations I faced till now while working with the company. The limitations are

given as follows:

 First of all the branch that is provided to me is very small. It doesn’t

have enough space even for the customers. If there are 10-20

customers then the branch is fully packed. There is not even space for

the staff members of the company. Even our A.M doesn’t have a cabin

for him.

 Second limitation is that the customers are already bothered by the

agents who fill up the form for credit cards. So the customers don’t

take interest in us. They don’t even listen to us.

 The secondary data that we use in our project may not be true. This

will lead to have a false analysis of the project.

 The Brokerage charges of the company are very high. This is the field

where the other companies gain the market as they are providing the

trading facility at a cheaper brokerage charge.

 The strictness that the company is adopting for filling the forms is very

complicated. Even when only one signature mismatches the form is

rejected.

26
CHAPTER 4 STUDY OF SELECTED REDESRCH

PROBLEM

4.1 Valuation of Shares

Bases of Share Valuation

Share valuation can either be in income or on asset values. There are two

incomes receivable on share, namely:-

Dividend income

Total income (earning attributable to each shareholder)

Dividend income is payable out of the attributable earnings and the two will only

be equal when the company has a 100% dividend payout ratio. The following

gives bases used for share valuation

• Earnings

• Dividends

• Assets

ABBREVIATIONS

Po = market price (present value) of the stock per share

Di = expected dividend i periods hence (i = 1, 2, 3 . . . n)

ke = the minimum required rate of return on the stock given its risk

Pn = the anticipated selling price of the stock at time n

g = expected growth rate of dividends

27
VALUATION OF SHARES

The commonly used model is the DISCOUNTED CASH FLOW MODEL gives

as:

Po = D1 / (1 + ke ) + D2 / (1 + ke ) + D3 / (1 + ke ) +……….. Dn / (1 + ke )
1 2 3 n

In practice, the model is difficult to use in valuing common stock. Two problems

associate with the model.

1) Determination of Dn i.e the eventual price when the share will be sold.

2) The formula does not give consideration to forecast all future dividends.

To overcome the ambiguities the (GORDON) CONSTANT GROWTH DIVIDEND

MODEL was employed:

Po = D1 / ( ke − g )

Example: D1 = Rs. 2 (next expected dividend per share)

ke = 14%

g = 10%

28
 Po = Rs.2 / (0.14 – 0.10)

= Rs. 50 per share

Note: The above equation can be re-written to give the divided yield on the

common stock.

ke = D1 / (Po + g)

Example: D1 = Rs. 2 , Po = Rs. 50 , g = 10%

ke = Rs. 2 / (50 + 0.10)

= 0.14 or 14%

Note: The term D1 / Po = dividend yield = Rs.2 / Rs.50 = 4 %

Note: In this case, g is the “Capital Gain yield”.

THE PRICE/EARNINGS MODEL

Useful when a company's stock is not traded publicly and no market price exists

Method:

1) Determine the P/E (Price by Earning ratio) ratio for the industry;

2) calculate the Earnings Per Share (EPS) of the company;

3) multiply the (P/E) industry times the EPS company

29
COMMON STOCK VALUATION (TOTAL COMMON EQUITY)

BOOK VALUE APPROACH

BV per Share = (Total Assets - Total Liabilities)/# com stock shares

Example: Total Assets = $10 million; Total Liabilities = $4 million; number of

common stock shares outstanding = 3 million

BV per share = ($10million - $4million)/3 million = $2.00 per share

LIQUIDATION VALUE MODEL

Note: The liquidation model assumes assets are sold at below book value to

reflect their poor or zero earning power.

From the previous example, using the asset value of $10million, assume the

assets can be sold at a discount of $2million.

BV per share liquidation = ($8 - $4)/3 million = $1.33 per share

Note: Liquidation value is a "worse case" scenario valuation assessment

PREFERRED STOCK VALUATION

Preferred stock is valued as a perpetuity. The preference shares differs from the

ordinary shares in that they carry certain preferential rights. The common areas

where the rights exist are:-

30
i) Dividend payment: Dividends are a fixed percent of par value –Dividend right

ii) Distribution in liquidation – Capital right

Diminishing importance of preference Shares.

The combined effect of inflation on fixed interest investments and the unfavorable

tax treatment of preference shares compared t debentures has caused the virtual

disappearance of the new issues of this type of shares.

VALUATION MODEL

Vp = Dp / kp

Where

Vp = present (market) value of the preferred stock per share

Dp = amount of dividend per year

Kp = investor’s required return on the preference stock

Example: Jambo Telecoms Ltd. Preference stocks pays an annual dividend of

Rs 4 and has required rate of return of 10%. What is the price of the stock?

Solution: Vp = Rs 4/ 0.10

= Rs. 40 per share

Effect of inflation can be incorporated by considering inflation as a negative

growth. The formulae would become

31
 Vp = Dp / (kp + r)

Where r is the inflation rate

Preference Share Yield formulae

kp = Dp / Vp

From previous example

kp = 4 / 40

= 10 % = the current yield on the preference stock

Investors compare the market yield to their required yield to make buy/sell

decisions.

ABOUT SYSTEMATICALLY ANALYZING A COMPANY

One must look for the following to make the right analysis:

INDUSTRY ANALYSIS: Companies producing similar products are subset (form

a part) of an Industry/Sector. For example, National Hydroelectric Power

Company (NHPC) Ltd., National Thermal Power Company (NTPC) Ltd., Tata

Power Company (TPC) Ltd. etc. belong to the Power Sector/Industry of India. It

is very important to see how the industry to which the company belongs is faring.

Specifics like effect of Government policy, future demand of its products etc.

need to be checked. At times prospects of an industry may change drastically by

any alterations in business environment. For instance, devaluation of rupee may

brighten prospects of all export oriented companies. Investment analysts call this

as Industry Analysis.

32
TECHNICAL ANALYSIS: Technical analysis is a security analysis discipline for

forecasting the future direction of prices through the study of past market data,

primarily price and volume. In its purest form, technical analysis considers only

the actual price and volume behavior of the market or instrument. Technical

analysts may employ models and trading rules based on price and volume

transformations, such as the relative strength index, moving

averages, regressions, inter-market and intra-market price correlations, cycles or,

classically, through recognition of chart patterns.

Technical analysis "ignores" the actual nature of the company, market, currency

or commodity and is based solely on "the charts," that is to say price and volume

information, whereas fundamental analysis does look at the actual facts of the

company, market, currency or commodity.

FUNDAMENTAL ANALYSIS: Fundamental analysis of a business involves

analyzing its financial statements and health, its management and competitive

advantages, and its competitors and markets.

Fundamental analysis is performed on historical and present data, but with the

goal of making financial forecasts. There are several possible objectives:

 to conduct a company stock valuation and predict its probable price

evolution,

 to make a projection on its business performance,

 to evaluate its management and make internal business decisions,

33
  to calculate its credit risk.

CORPORATE ANALYSIS: How has the company been faring over the past few

years? Seek information on its current operations, managerial capabilities,

growth plans, its past performance vis-à-vis its competitors etc. This is known as

Corporate Analysis.

FINANCIAL ANALYSIS: If performance of an industry as well as of the company

seems good, then check if at the current price, the share is a good buy. For this

look at the financial performance of the company and certain key financial

parameters like Earnings Per Share (EPS), P/E ratio, current size of equity etc.

for arriving at the estimated future price. This is termed as Financial Analysis. For

that you need to understand financial statements of a company i.e. Balance

Sheet and Profit and Loss Account contained in the Annual Report of a company.

RATIO ANALYSIS

Mere statistics/data presented in the different financial statements do not reveal

the true picture of a financial position of a firm. Properly analyzed and interpreted

financial statements can provide valuable insights into a firm’s performance. To

extract the information from the financial statements, a number of tools are used

to analyse such statements. The most popular tool is the Ratio Analysis.

Financial ratios can be broadly classified into three groups: (I) Liquidity ratios, (II)

34
Leverage/Capital structure ratio, and (III) Profitability ratios.

(I) LIQUIDITY RATIOS:

Liquidity refers to the ability of a firm to meet its financial obligations in the short-

term which is less than a year. Certain ratios, which indicate the liquidity of a firm,

are (i) Current Ratio, (ii) Acid Test Ratio, (iii) Turnover Ratios. It is based upon

the relationship between current assets and current liabilities.

(i) Current ratio = Current Liabilities / Current Assets

The current ratio measures the ability of the firm to meet its current liabilities from

the current assets. Higher the current ratio, greater the short-term solvency (i.e.

larger is the amount of rupees available per rupee of liability).

(ii) Acid-test Ratio = Current Liabilities / Quick Assets

Quick assets are defined as current assets excluding inventories and prepaid

expenses. The acid-test ratio is a measurement of firm’s ability to convert its

current assets quickly into cash in order to meet its current liabilities. Generally

speaking 1:1 ratio is considered to be satisfactory.

(iii) Turnover Ratios:

Turnover ratios measure how quickly certain current assets are converted into

35
cash or how efficiently the assets are employed by a firm. The important turnover

ratios are:

Inventory Turnover Ratio, Debtors Turnover Ratio, Average Collection

Period, Fixed Assets Turnover and Total Assets Turnover

Inventory Turnover Ratio =Cost of Good Sold/ Average Inventory

Where, the cost of goods sold means sales minus gross profit. ‘Average

Inventory’ refers to simple average of opening and closing inventory. The

inventory turnover ratio tells the efficiency of inventory management. Higher the

ratio, more efficient inventory management.

Debtors’ Turnover Ratio =Net Credit Sale / Average Accounts Receivable

(Debtors)

The ratio shows how many times accounts receivable (debtors) turns over during

the year. If the figure for net credit sales is not available, then net sales figure is

to be used. Higher the debtors turnover, the greater the efficiency of credit

management.

Average Collection Period = Average Debtors / Average Daily Credit Sales

Average Collection Period represents the number of days’ worth credit sales that

36
is locked in debtors (accounts receivable).

Please note that the Average Collection Period and the Accounts Receivable

(Debtors) Turnover is related as follows:

Average Collection Period =365 Days / Debtors Turnover

Fixed Assets turnover ratio measures sales per rupee of investment in fixed

assets. In other words, how efficiently fixed assets are employed. Higher ratio is

preferred. It is calculated as follows:

Fixed Assets turnover ratio = Net Sales / Net Fixed Assets

Total Assets turnover ratio measures how efficiently all types of assets are

employed.

Total Assets turnover ratio = Net Sales / Average Total Assets

(II) LEVERAGE/CAPITAL STRUCTURE RATIOS:

Long term financial strength or soundness of a firm is measured in terms of its

ability to pay interest regularly or repay principal on due dates or at the time of

maturity. Such long term solvency of a firm can be judged by using leverage or

capital structure ratios. Broadly there are two sets of ratios:

First, the ratios based on the relationship between borrowed funds and owner’s

capital which are computed from the balance sheet. Some such ratios are: Debt

to Equity and Debt to Asset ratios. The second set of ratios which are calculated

37
from Profit and Loss Account is: The interest coverage ratio and debt service

coverage ratio are coverage ratio to leverage risk.

(i) Debt-Equity ratio reflects relative contributions of creditors and owners to

finance the business.

Debt-Equity ratio = Total Debt / Total Equity

The desirable/ideal proportion of the two components (high or low ratio) varies

from industry to industry.

(ii) Debt-Asset Ratio: Total debt comprises of long term debt plus current

liabilities. The total assets comprise of permanent capital plus current liabilities.

Debt-Asset Ratio = Total Debt / Total Assets

The second set or the coverage ratios measure the relationship between

proceeds from the operations of the firm and the claims of outsiders.

(iii) Interest Coverage ratio = Earnings before Interest and Taxes / Interest

Higher the interest coverage ratio better is the firm’s ability to meet its interest

burden. The lenders use this ratio to assess debt servicing capacity of a firm.

(iv) Debt Service Coverage Ratio (DSCR) is a more comprehensive and apt to

compute debt service capacity of a firm. Financial institutions calculate the

38
average DSCR for the period during which the term loan for the project is

repayable. The Debt Service

Coverage Ratio is defined as follows:

Profit after tax + depreciation + other non cash expenditure + interest on term

loan / Interest on term loan + repayment on term loan

(III) PROFITABILITY RATIOS:

Profitability and operating/management efficiency of a firm is judged mainly by

the following profitability ratios:

(i) Gross Profit Ratio (%) = Gross Profit / Net Sales * 100

(ii) Net Profit Ratio (%) = Net Profit / Net Sales * 100

Some of the profitability ratios related to investments are:

(iii) Return on Total Assets = profit before Interest and Tax / fixed asset +

current asset

(iv) Return on Capital Employed = Net Profit after Tax / Total Capital Employed

(Here, Total Capital Employed = Total Fixed Assets + Current Assets -

39
Current Liabilities)

(v) Return on Shareholders’ Equity = Net profit After Tax / Average Total

Shareholders Equity or Net Worth

(Net worth includes Shareholders’ equity capital plus reserves and surplus)

A common (equity) shareholder has only a residual claim on profits and assets of

a firm, i.e., only after claims of creditors and preference shareholders are fully

met, the equity shareholders receive a distribution of profits or assets on

liquidation. A measure of his well being is reflected by return on equity. There are

several other measures to calculate return on shareholders’ equity of which the

following are the stock market related ratios:

(i) Earnings Per Share (EPS): EPS measures the profit available to the equity

shareholders per share, that is, the amount that they can get on every share

held. It is calculated by dividing the profits available to the shareholders by

number of outstanding shares. The profits available to the ordinary shareholders

are arrived at as net profits after taxes minus preference dividend.

It indicates the value of equity in the market.

EPS = Net Profit Available To The Shareholder / Number of Ordinary Shares

Outstanding

40
(ii) Price-earnings ratios = P/E Ratio = Market Pr ice per Share / EPS

4.2 SWOT Analysis of Sharekhan (My observation)

STRENGTHS

1. Big client base

2. In-house research house

3. online as well as offline trading

4. Online IPO/ MF services

5. Share shops

6. Transparent

7. User friendly tie ups with 10 banks

8. Excellent order execution speed and reliability

WEAKNESS

1. Lack of awareness among customer

2. Less focus on customer retention

3. Less Exposure

OPPORTUNITIES

1. Diversification

2. Product modification

3. Improve Web based trading

4. Provide competitive brokerage

5. Concentrate on PMS

6. Focus on Institutional investors

41
7. Concentrate on HNI’s (high net worth investor)

THREATS

1. Aggressive promotional strategies by close competitor like Religare, Angel

Broking and India bulls.

2 More and more players are venturing into this domain, which can further

reduce the earning of Share Khan.

3 Stock market is very volatile, risk involves is very high.

42
4.3 Research Statistics

RESEARCH DESIGN: In this case study I am using both Descriptive and Causal

Research Design. Reasons re as follows:

DESCRIPTIVE RESEARCH DESIGN: It is used when one is interested in

knowing the proportion of the people in a given population who have behaved in

a particular manner, making projections of certain things. This will help me in

knowing the Investment Pattern i.e. how many people are going in the same

direction to invest their money. The objective of this study is to answer who,

what, where and how of the subject under investigation.

CAUSAL RESEARCH DESIGN: It investigates the cause and effect relationship

between two variables. In this project this will help us in knowing how recession

and boom phase of economy effects the investor’s decision of investment and

how the capacity of taking risk in the market increases or decreases.

DATA COLLECTION

For this study, there was a need to collect PRIMARY DATA as the decision of

the investor keeps on changing from time to time. Collection of primary data is

reliable as it avoids self – report bias and cannot record what can not be said.

43
Due to time and financial constraint Marketing Research is done through

Sampling. Sample offers various benefits as:

1) It saves time.

2) It helps in cutting expense.

INSTRUMENT USED TO COLLECT DATA

Data is colleted with the help of Questionnaire.

For this study, the sample is taken from Cannaught Palace, Jhandewalan,

Pitam Pura and Rajouri Garden. Sample of 300 is taken for this study.

RESULT ANALYSIS

There are certain questions which have been asked to the people for the

completion of this project and find the result matching to the Objective.

PEOPLE WHO INVEST AND DON’T INVEST

No
17%

Yes
No

Yes
83%

44
Interpretation: This shows that though the slowdown has affected many people

financially and mentally but then also there is large portion of population who

invest their money in one or the other financial instrument in hope of getting

some handsome return. The people who don’t invest can be the client of the

company as these people are the fresh market for the company and the

challenge for the marketers to find out the reasons behind their decision and pull

them towards the growing investment sector.

REASON FOR NOT INVESTING

Time Constraint

20% 8%
Financial
Constraint

18% Lack of knowledge

54%
Volatile Market

Interpretation: This chart answers the why part of not investing the money. The

company should concentrate on these reasons and try to solve the issues like

imparting knowledge about the various investment options and the share market.

Those having financial constraint can also be converted to the clients as the

company should provide them the options which are in the client reach of

45
investment. The people with time constraint and financially sound can be given

an option of Portfolio Management Services.

TRADER OR INVESTOR

30% S hort Term Trader

Long Term
70% Inves tor

Interpretation: This chart shows that 70% of the people believe in short term

trading i.e. investing their money for less than 1 year. These short term investors

believe in getting their return quick as they don’t want to park their money for

longer time. The company can attract them towards the share market as this

market give high return in short span combining with risk factor. The company

should identify the risk taker and then play the role of increasing their client base

by absorbing the clients in their company. For long term investors aspiring high

return on their investment Portfolio Management Services can be a good options

46
and attracting them towards the investment in blue chip companies in share

market for more than a year.

PREFERENCE OF INVESTMENT

Share Market

Mutual Fund
4% 3%
31% 45%
Insurance

Govt. Sec &

17% Bonds
Fixed Deposits

Interpretation: In this chart we can see that the preference for Share Market is

more but the preference for Insurance is not less. Insurance sector is an

upcoming sector. The company should see this as an opportunity and should

take a step towards diversification to Insurance sector. Mutual Fund is also a

limited risky platform to invest in with good return and the company should step

forward to tell more about this instrument.

47
WHAT MOVES THE SHARE MARKET

US economy

Govt.announceme
12% 18%
nt
23% 10% M arket
sentim ents
com pany
37%
performance
Speculation

Interpretation: This helps in understanding the psychology of the investor and

helps the company in making the research reports for the clients’ (this is a kind of

additional service to retain the customer towards share market). The Company

can provide the technical and fundamental analysis so that those reports help

them in their analysis of share market and they can make their own company

portfolio for investment purpose according to the market forecasting and their

own analysis.

48
PERCENTAGE OF THE EARNING INVESTED BY THE PEOPLE

10% of earning

14%
30% 20% of earning
19%
30% of earning
37%
m ore than 30% of
earning

Interpretation: This statistical data is very important for the company as this is

an estimation of how much business the company can get in their court. The

company could categories the investors according to their capacity to invest and

pitch them the right product to invest in. The investors who are ready to invest

more than 30% of their earning should be treated under special category as they

can be High Net worth Individual for the company.

49
APPETITE FOR RISK

17% 17%
5%
12%
10%
15%
20%
54%

Interpretation: This data shows the capacity of the investors to take risk. Those

who are ready to take high risk seek high return on their investment from the

market. These data will help the company to target the customer with right kind of

product offering to them and categorize the client under different heads. This

data will also cross check certain other data in the research whether client is true

to the questionnaire or not.

50
RECESSION: THE BEST TIME TO PURCHASE SHARE

Yes
37%
Yes

No No
63%

Interpretation: This chart shows that in recession phase also around 40%

people do not loose hope to earn or invest. The company should take an initiative

to hold the faith of these people in recession. The rest not having faith in the

recession time should be provided with financial consultancy to do the right

investment in the critical phase of economy.

51
BEST FINANCIAL INSTRUMENT TO INVEST DURING

BOOM PHASE

Fixed Deposit

Share market(blue
7% 9% 2% chip co.)
17% Mutual Fund

57%
8% Insurance

Govt. sec &

Bonds
PMS

Interpretation: This chart shows the proportion of people investing in different

financial instruments during boom phase. This helps the company in knowing the

psychology of the investors as how they switch on their investing decision from

boom phase to normal or stagnant phase to recession phase. It is expected

during boom phase that there are more chance of high return from share market

and sectors which invest their major portion of money in share market so 57% of

people are tilted towards share market.

52
BEST FINANCIAL INSTRUMENT TO INVEST DURING RECESSION PHASE

Fixed Depos it

Share m arket(blue
5% 8% chip co.)
18%
M utual Fund
43% 9%
Insurance
17%

Govt. sec &

Bonds
PM S

Interpretation: This chart shows the contrasting data from the earlier one. This

is how the economical situation changes the decision of the investor. As we can

see that during boom period, share market was the most liked one but in

recession the people see the security and most of their investment goes to

government securities and bonds as they are safer than any other instrument. In

recession time people usually loose faith in the economic growth and their vision

to get good return is very short and change their decision or some of them either

don’t invest and keep their money with them which give them zero in return. The

people should be aware of the difference between recession and depression and

this can be done by any company consultant to their clients.

53
 CHAPTER 5 SUMMARY AND CONLUSION

5.1 RECOMMENDATIONS/SUGGESTIONS

1) The company should look into the low call ratio problem and sort this out at the

earliest as these potential clients can be a customer of the company.

2) The company should go through the entire data collected about the investors

risk appetite, their preference for financial instrument and investment capacity

etc. to diversify their business in other sectors also.

3) Apart from retail investors, the company can also focus on institutional sector

as institutions, banks and corporate have their own unique investment needs.

4) The company can also go for business tie-ups to upgrade their services or to

widen the product line and width.

5) The company can adopt corporate level strategy like merger or acquisition to

increase their client base and geographical dominance.

6) Keep on improving the Information Technology section of the company so as

to keep themselves ahead from others in terms of quality and speed.

7) Marketing strategy for the promotion of the company is required.

8) Identify the core competencies of the company as well as the loose ends so as

to maintain the core competency and work on the weakness.

9) Quarterly review of the employee performance to maintain the hard working

employee in the company otherwise they can be a liability on the company.

54
10) Review the pay system of the company to keep the motivation of the

employee as employees are the one who convert the commitments of the

company into reality.

A PROBLEM ANALYSIS AT SHAREKHAN

Sharekhan is having a Lead Management System, which is used by the

Assistant Manager and the Executive to maintain and update the status of the

leads they get from the company. The problem in the company is that the call

ratio of the Sharekhan Delhi is less than the other city branch. I have taken the

sample of 32 employees. The following two reasons came out while analyzing

the reason behind the issue:

1) Updating the leads daily with handling the field work is bit difficult.

2) Fake updating of leads as updating the system daily is compulsory otherwise

come in violation. Motivation to work with honesty lacks in employees.

5.2 CONCLUSION

Indian economy has been globalized and the capital market has been

linked to the international financial market. Foreign individuals and institutional

investors are now encouraged to participate into it. So, there is a need for raising

the Indian Capital market in to the international standards in terms of efficiency

and transparency. One such measure is the passing out of the Depository Act

during the year 1996. Dematerialization of securities and under this system is

one of the major steps aimed at improving and modernizing the capital market

55
and enhancing the levels of investor’s protection measures which aims at

eliminating the bad deliveries and forgery of shares and expediting the transfer of

shares.

Thus online share trading is gaining its popularity. Though it still has to go

a long way but it has established its foothold in the metropolitan cities like Delhi,

Mumbai etc. The dematerializing of shares coupled with the huge growth of

internet has been the fuel for the online trading which is now a considerable part

of the total trading. It can therefore be said that online share trading is here to

stay and will only grow to bigger proportions and will penetrate deeper into the

economy. So online trading would become the order of the day, taking over the

traditional norms in the years to come.

After making a detailed analysis of the data which are collected through

survey it was found that 41.26 % of the sample unit are not aware and not

interested for online trading on the other hand 30.15% were aware and interested

on online trading ,this difference can be judged on account of various parameters

viz.

a. Risk factors.

b. No knowledge

c. Time constraint

d. Money constraint

e. High fluctuation of the stock market

f. Lack of knowledge of computer.

56
 APPENDIX

Bibliography

www.wikipedia.org

www.textbooksonline.tn.nic

www.beginnersinvest.about.com

www.library.thinkquest.org

www.globusz.com

www.Nseindia.com

www.bseindia.com

www.cbdd.wsu.edu

www.investmentguide.co.uk

BOOKs:

Financial Management – IM Pandey

An Introduction to Accountancy – SN Maheswari and SK Maheshwari

Marketing Research – GC Beri

57
 Annexure

QUESTIONNAIRE

QUESTIONNAIRE

Ques 1 Do you invest?

a) Yes b) No

Ques 2 What is the reason for not investing?

a) Time constraint
b) Financial constraint
c) Lack of knowledge
d) Volatile market

Ques 3 Are you a short term trader / long term investor?

a) Trader b) Investor

Ques 4 Where do you invest?

a) Share Market
b) Mutual Fund
c) Insurance
d) Govt. securities n Bonds
e) Fixed deposits

Ques 5 What according to you is the reasons of market volatility?

a) US economy
b) Govt. announcements
c) Market sentiments
d) Companies performance
e) Speculation

Ques 6 How much %age of your salary you invest?

a) 10%
b) 20%
c) 30 %
d) more than 30%

Ques 7 Your appetite for risk –

a) 05%
b) 10%
c) 15%
d) 20%

58
Ques 8 Do you think investing in recession phase is more profitable as you can
buy at lower rates?
a) Yes b) No

Ques 9 Which is the best instrument to invest in during Boom period?

a) Fixed deposits
b) Blue chip companies
c) Mutual funds
d) Insurance
e) Govt. securities n bonds
f) Portfolio Management Services (PMS)

Ques 10 Which is the best instrument to invest in during Recession period?

a) Fixed deposits
b) Blue chip companies
c) Mutual funds
d) Insurance
e) Govt. securities n bonds
f) Portfolio Management Services (PMS)

59