In todays era investors are facing with many diversified options to invest their savings.

They have many investment instruments to invest so our topic or we can say area of interest is to know investors preferences regarding different stock instrument.

Investors invest for mainly for following reasons  Inflation is constantly increasing the cost of goods and services and eating into the value of income and wealth. Investor need to save money and invest it well so that the value of every rupee is augmented.  Higher life-expectancy means people live longer and hence, need more money to maintain their living standards.  Investing selectively allows them to enjoy tax benefits.  By investing wisely they can improve their standard of living and create wealth for the future.

Categories for the investment purpose are as follows

Financial instruments can be categorized by "asset class" depending on whether they are equity based (reflecting ownership of the issuing entity) or debt based (reflecting a loan the investor has made to the issuing entity). If it is debt, it can be further categorized into short term (less than one year) or long term.

Foreign Exchange instruments and transactions are neither debt nor equity based and belong in their own category.

1. Debt Debt securities may be called debentures, bonds, deposits, notes or commercial paper depending on their maturity and certain other characteristics. The holder of a debt security is typically entitled to the payment of principal and interest, together with other contractual rights under the terms of the issue, such as the right to receive certain information. Debt securities are generally issued for a fixed term and redeemable by the issuer at the end of that term. Debt
1

securities may be protected by collateral or may be unsecured, and, if they are unsecured, may be contractually "senior" to other unsecured debt meaning their holders would have a priority in a bankruptcy of the issuer. Debt that is not senior is "subordinated".

 Corporate bonds represent the debt of commercial or industrial entities. Debentures have a long maturity, typically at least ten years, whereas notes have a shorter maturity. Commercial paper is a simple form of debt security that essentially represents a post-dated check with a maturity of not more than 270 days.

 Money market instruments are short term debt instruments that may have characteristics of deposit accounts, such as certificates of deposit, and certain bills of exchange. They are highly liquid and are sometimes referred to as "near cash". Commercial paper is also often highly liquid.

 Euro debt securities are securities issued internationally outside their domestic market in a denomination different from that of the issuer's domicile. They include eurobonds and euro notes. Eurobonds are characteristically underwritten, and not secured, and interest is paid gross. A euro note may take the form of euro-commercial paper (ECP) or euro-certificates of deposit.

 Government bonds are medium or long term debt securities issued by sovereign governments or their agencies. Typically they carry a lower rate of interest than corporate bonds, and serve as a source of finance for governments. U.S. federal government bonds are called treasuries. Because of their liquidity and perceived low risk, treasuries are used to manage the money supply in the open market operations of non-US central banks.

 Sub-sovereign government bonds, known in the U.S. as municipal bonds, represent the debt of state, provincial, territorial, municipal or other governmental units other than sovereign governments.

 Supranational bonds represent the debt of international organizations such as the World Bank, the International Monetary Fund, regional multilateral development banks and others.

2. Equity An equity security is a share of equity interest in an entity such as the capital stock of a company, trust or partnership. The most common form of equity interest is common stock, although preferred equity is also a form of capital stock. The holder of an equity is a shareholder, owning a share, or fractional part of the issuer. Unlike debt securities, which typically require regular payments (interest) to the holder, equity securities are not entitled to any payment. In bankruptcy, they share only in the residual interest of the issuer after all obligations have been paid out to creditors. However, equity generally entitles the holder to a pro rata portion of control of the company, meaning that a holder of a majority of the equity is usually entitled to control the issuer. Equity also enjoys the right to profits and capital gain, whereas holders of debt securities receive only interest and repayment of principal regardless of how well the issuer performs financially. Furthermore, debt securities do not have voting rights outside of bankruptcy. In other words, equity holders are entitled to the "upside" of the business and to control the business.

3. Hybrid Hybrid securities combine some of the characteristics of both debt and equity securities.

 Preference shares form an intermediate class of security between equities and debt. If the issuer is liquidated, they carry the right to receive interest and/or a return of capital in priority to ordinary shareholders. However, from a legal perspective, they are capital stock and therefore may entitle holders to some degree of control depending on whether they contain voting rights.

 Convertibles are bonds or preferred stock that can be converted, at the election of the holder of the convertibles, into the common stock of the issuing company. The convertibility,
3

however, may be forced if the convertible is a callable bond, and the issuer calls the bond. The bondholder has about 1 month to convert it, or the company will call the bond by giving the holder the call price, which may be less than the value of the converted stock. This is referred to as a forced conversion.

 Equity warrants are options issued by the company that allow the holder of the warrant to purchase a specific number of shares at a specified price within a specified time. They are often issued together with bonds or existing equities, and are, sometimes, detachable from them and separately tradable. When the holder of the warrant exercises it, he pays the money directly to the company, and the company issues new shares to the holder. Warrants, like other convertible securities, increases the number of shares outstanding, and are always accounted for in financial reports as fully diluted earnings per share, which assumes that all warrants and convertibles will be exercised.

Other categories of division of different instrument for investment are as follows

1. Financial Instruments  Equities Equities are a type of security that represents the ownership in a company. Equities are traded (bought and sold) in stock markets. Alternatively, they can be purchased via the Initial Public Offering (IPO) route, i.e. directly from the company. Investing in equities is a good long-term investment option as the returns on equities over a long time horizon are generally higher than most other investment avenues. However, along with the possibility of greater returns comes greater risk.  Mutual funds A mutual fund allows a group of people to pool their money together and have it professionally managed, in keeping with a predetermined investment objective. This investment avenue is popular because of its cost-efficiency, risk-diversification, professional management and sound regulation. You can invest as little as Rs. 1,000 per month in a
4

mutual fund. There are various general and thematic mutual funds to choose from and the risk and return possibilities vary accordingly.  Bonds Bonds are fixed income instruments which are issued for the purpose of raising capital. Both private entities, such as companies, financial institutions, and the central or state government and other government institutions use this instrument as a means of garnering funds. Bonds issued by the Government carry the lowest level of risk but could deliver fair returns.  Deposits Investing in bank or post-office deposits is a very common way of securing surplus funds. These instruments are at the low end of the risk-return spectrum.  Cash equivalents These are relatively safe and highly liquid investment options. Treasury bills and money market funds are cash equivalents.

2. Non-financial Instruments  Real estate With the ever-increasing cost of land, real estate has come up as a profitable investment proposition.  Gold The 'yellow metal' is a preferred investment option, particularly when markets are volatile. Today, beyond physical gold, a number of products which derive their value from the price of gold are available for investment. These include gold futures and gold exchange traded funds.

Factors which influence the decision to invest

 Past market trends Sometimes history repeats itself; sometimes markets learn from their mistakes. You need to understand how various asset classes have performed in the past before planning your finances.  Your risk appetite The ability to tolerate risk differs from person to person. It depends on factors such as your financial responsibilities, your environment, your basic personality, etc. Therefore, understanding your capacity to take on risk becomes a crucial factor in investment decision making.  Investment horizon How long can you keep the money invested? The longer the time-horizon, the greater are the returns that you should expect. Further, the risk element reduces with time.  Investible surplus How much money are you able to keep aside for investments? The investible surplus plays a vital role in selecting from various asset classes as the minimum investment amounts differ and so do the risks and returns.  Investment need How much money do you need at the time of maturity? This helps you determine the amount of money you need to invest every month or year to reach the magic figure.  Expected returns The expected rate of returns is a crucial factor as it will guide your choice of investment. Based on your expectations, you can decide whether you want to invest heavily into equities or debt or balance your portfolio.

Evolution of the Indian Brokerage Market

The Indian broking industry is one of the oldest trading industries that had been around even before the establishment of the BSE in 1875. Despite passing through a number of changes in the post liberalization period, the industry has found its way towards sustainable growth. The evolution of the brokerage market is explained in three phases: pre 1990, 1990-2000, post 2000.

Early Years The equity brokerage industry in India is one of the oldest in the Asia region. India had an active stock market for about 150 years that played a significant role in developing risk markets as also promoting enterprise and supporting the growth of industry. The roots of a stock market in India began in the 1860s during the American Civil War that led to a sudden surge in the demand for cotton from India resulting in setting up of a number of joint stock companies that issued securities to raise finance. This trend was taking to the rapid growth of securities markets in Europe and the North America in the background of expansion of railroads and exploration of natural resources and land development.

Bombay, at that time, was a major financial centre having housed 31 banks, 20 insurance companies and 62 joint stock companies. In the aftermath of the crash, banks, on whose building steps share brokers used to gather to seek stock tips and share news, disallowed them to gather there, thus forcing them to find a place of their own, which later turned into the Dalal Street. A group of about 300 brokers formed the stock exchange in Jul 1875, which led to the formation of a trust in 1887 known as the Native Share and Stock Brokers Association. A unique feature of the stock market development in India was that that it was entirely driven by local enterprise, unlike the banks which during the pre-independence period were owned and run by the British. Following the establishment of the first stock exchange in Mumbai, other stock exchanges came into being in major cities in India, namely Ahmedabad (1894), Calcutta (1908), Madras (1937), Uttar Pradesh and Nagpur (1940) and Hyderabad (1944). The stock markets gained from surge and boom in several industries such as jute (1870s), tea (1880s and 1890s), coal (1904 and 1908) etc, at different points of time.

India in Global Capital Markets

The stature and significance of India is growing in the world capital markets. India is not only attracting greater interest from world markets, but is also assuming increasing importance in global finance.
y

India is a major recipient of foreign institutional flows amongst the emerging markets. Since the opening up of domestic stock markets to foreign investors, cumulative net FII investments reached Rs 517 Bn by 2008 end. India is major destination of private equity flows into the emerging markets India was host to the annual meetings/conference of the World Federation of Exchanges (2005) and International Organization of Securities Commission (IOSCO) (2007) India emerged a trillion dollar market capitalisation market in 2007, and was among the top 10 stock exchanges in the world in terms of market capitalisation India is amongst the top fifteen stock exchanges in the world in respect of equity turnover India emerged as a leading player in commodities futures market India is amongst the top five in the number of transactions India is among the top five in respect of volume traded in Stock Index Futures and Stock Futures India is one of the few markets with extensive dematerialisation of shares Indias T+2 securities settlement cycle is at par with the global standards Indian stock markets have the largest number of listings, with trading taking place in about 2,500-3,000 stocks Indias most popular stock index (Sensex) is constructed on the basis of full float methodology, one of the firsts in the Asian region and a global standard Indian market indices such as Sensex and CNX Nifty are listed in foreign exchanges for trading as ETFs.

y y

y y y y

y y y

Major players
Rs. Crore Rs. Crore Rs. Crore Total PAT Net income worth 122.03 21.59 45.1 61.24 26.05 68.01 384.97 131.79 208.52 672.45 628.31 59.06 34.79 54.22 952.76 32.31 3436.51 14.18 2.87 48.89 186.44 23.5 48.23 128.69 248.66 3.46 17.18 3.05 1039.23 0.88 1786.85 39.07 6.99 111.78 258.24 132.26 233.61 989.85 364.02 15.66 399.92 53.89 5926.97 4.93 8582.29

Company Name Apollo Sindhoori Capital Invsts. Ltd. Arihant Capital Markets Ltd. Bajaj Capital Insurance Broking Ltd. Brics Securities Ltd. Edelweiss Securities Ltd. Emkay Global Financial Services Ltd. Geojit B N P Paribas Financial Services Ltd. India Infoline Ltd. Indiabulls Securities Ltd. L K P Securities Ltd. Motilal Oswal Financial Services Limited. Networth Stock Broking Ltd. Reliance Capital Ltd. Religare Commodities Ltd. Total

Source: Dun & Bradstreet report: Indias Leading Equity Broking Houses

PESTEL ANALYSIS
 POLITICAL The equity market of India is very vulnerable. India has been politically instable in the past but it is a little politically stable now-a-days.the political instability of the country has a very strong impact on the equity market. The share market of India changes as the political changes took place. The equity market of India is too weak and is based on speculations. The political stability of the country is very important for the stability and growth of capital market in India. The political imbalance or balance of the country is the major factor in deciding the capital market of India. The political factors include:
y y y y

employment laws tax policy trade restrictions and tariffs political stability

 ECONOMICAL The economical measures taken by the government of India has a very strong relationship with the capital market. Whenever the annual budget is announced the capital market goes up and down with the economical policies of the government .If the policies are supportive to the companies then the Equity market takes it positively and if there is any other policy that is not supportive and it is not welcomed then the capital market goes down. Like, in the case of allocation of 3-G spectrum, those companies that got the license for 3-G, they witnessed sharp growth in their share values so the economic policies play a major part in the growth and decline of the capital market and again if there is relaxation on any kind of taxes on items of automobile industry then the share of automobile sector goes up and virtually strengthen the capital market .The economical factors include:
y y y y

inflation rate economic growth exchange rates interest rates

10

 SOCIAL India is a country of unity in diversity .India is socially rich but the capital market is not very attached with the social factors .Yes, there is some relation between the social factors with the capital market. If there is any big social factor then to some extent it affects the capital market but small social factors dont impact at all. Like, there was opposition of reliance fresh in many cities and many stores were closed. The share prices of the reliance fresh went down but the impact was on and individual firm there was not much impact on the capital market on a whole the social factors have not much of impact on the capital market in India. The social factors include:
y y y y y

emphasis on safety career attitudes population growth rate age distribution health consciousness

 TECHNOLOGICAL The technological factors have not that much effect on the capital market. India is technological backward country. Same as social factors, technological factor can have an effect on an individual form but it cannot have a big impact on a whole of capital market. The technological change in India is always on a lower basis and it doesnt effect on country as a whole. The technological factors include:
y y y y

R&D activity technology incentives rate of technological change automation

 ENVIORNMENTAL FACTORS Initially the environmental factors dont play a vital role in the capital market. But the time has changed and people are more eco-friendly. This is really bothering them that if any firm or industry is environment friendly or not. An increasing number of people, investors, corporate executives are paying importance to these facts, the capital markets still see the environment as a liability. They belie that it is of no use for their strategy. The environmental performance is even under-valued by the markets.
11

 LEGAL FACTORS Legal factors play an important role in the development and sustain the capital market. Legal issues relating to any industry or firm decides the fate of the capital market. If the govt. of India or the parliament introduces a new law that can affect the running of the industry then the industry will be de motivated and this demonization will lead to the demonization of the investors and will result in the fall of capital market. Like after the Hardhat Mehta scam, new rules and regulations were introduced like PAN card was made necessary for trading, if any investor was investing too much money in a small firm, then the investors were questioned etc. These regulations were meant to maintain transparency in the capital market, but at that time, investment was discouraged. Legal factors are necessary for the improvement and stability of the capital market.

THE FIVE FORCES MODEL RELEVANT TO THE INDIAN BROKERAGE INDUSTRY

1. The Bargaining Power Of Customers  Lack of Expertise Curtails Bargaining Power  Retail investors often lack the knowledge and expertise in the financial sector that calls them to approach the broking houses.  Low Product Differentiation Proves Beneficial the retail broking service provided by the various companies is homogeneous with very low product differentiation. This allows customers to enjoy a greater bargaining power.

2. The Bargaining Power Of Suppliers  Increased Dependence on IPOs There is a growing dependence of corporate on broking houses with the rising number of IPOs coming to the market.

12

3. The Intensity Of Competitive Rivalry  Move towards consolidation Lot of brokerage companies are moving towards consolidation with the smaller ones becoming either franchisees for the larger brokers or closing operations.  Increased Focus of Banks in Retail Broking various foreign banks like ABN Amro and others are planning to enter the Indian retail brokerage industry.  Online Trading Competes with Traditional Brokerage There is an increasing demand for online trading due to consumers growing preference for internet as compared to approaching the brokers.

4. Threat of New Entrants  Entry of Foreign Players New forms of trading including T+2 settlement system, dematerialization etc are strengthening the retail brokerage market and attracting foreign companies to enter the Indian industry.

5. The Threat Of Substitute Products  Alternative Investment Options various alternative forms of investment including fixed deposits with banks and post offices etc act as substitutes to retail broking products and services.  Now even various banks provide similar type of services. They also give the same service of portfolio management and wealth management.

13

The organisation which we have selected for our project work is Raj Investment which is a small broking firm which is a sub-part of leading broking firm that is Motilal Oswal. So before introducing the Raj investment let us throw light on Motilal Oswal firstly. Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a small sub-broking unit, with just two people running the show. Focus on customer-first-attitude, ethical and transparent business practices, respect for professionalism, research-based value investing and implementation of cutting-edge technology has enabled us to blossom into an over 1600 member team.

Their Mission is: To deliver superior value to our customers, Shareholders, employees and society at large. Their Guiding Principles & Core Values are:  Customer interest is paramount  Ethical and transparent business practices  Respect for professionals, associates and business partners  Research based value investing  Cutting edge technology to ensure world-class customer service

Today they are a well diversified financial services firm offering a range of financial products and services such as Wealth Management, Broking & Distribution, Commodity Broking, Portfolio Management Services, Institutional Equities, Private Equity, Investment Banking Services and Principal Strategies.

They have a diversified client base that includes retail customers (including High Net worth Individuals), mutual funds, foreign institutional investors, financial institutions and corporate clients. They have headquartered in Mumbai and as of Sept 30th, 2011, had a network spread over 563 cities and towns comprising 1,538 Business Locations operated by their Business Partners and them. As at Sept 30th, 2011, they had 732,173 registered customers.

14

If we talk about Raj Investment then it was started in 2004 by Rajendrabhai Bhavsar with its first official franchise from Motilal Oswal at Sagrampura Surat. And it is its main branch. With slowly and gradually they flourished and now they have other two branches one at Kadodara and another one is at Chikli. The timing of the firm is 9:00 am to 6:30 pm. The manager under which we had worked is Vijay T. Prajapati and other head is Jeetubhai Yadav. At present they have 1300 customer. And the product and services they provide are as follows: 1. Equity 2. Derivatives 3. Online Trading 4. Insurance Distribution 5. Commodities 6. Mutual Funds 7. IPOs 8. Depository Services 9. Loan Against Shares 10. Asset Management 11. Private Equity 12. Investment Banking 13. Wealth Management

DIVISION/DEPARTMENTS 1. Trading department Motilal Oswal is one of the broker who is acting as wholesalers and as a broker, it is the duty of it to provide service of collecting funds and securities from the investors and send it to clearing house and vice versa. According to SEBI investor has to open trading account for trading in shares. Client can open an account in any depository. Trading department is divided into three parts:

15

a) Pre-trading (A/c opening, deposits, etc) b) Trading (Dealing room, Sauda punching, conformation) c) Post-trading (Payout process, bills, pay-in-process, contract note)

2. Marketing department

This year MOFSL introduced a new brand philosophy. The relentless focus on research and insight, which is the DNA of the company, has manifested itself in the brand idea Knowledge First. This simple philosophy of 'Knowledge First' has been brought alive through a multimedia campaign in TV, print, outdoor and the web.

3. Human resource department

MOFSL has grown at a scorching pace, not only in terms of business but also in terms of its most valuable asset -people. They have an ever-growing employee strength of 2315 associates that operates out of a rapidly expanding Company network. HR at Motilal Oswal, on the one hand strives to make every employee of the organisation its brand ambassador and on the other hand make the Motilal Oswal brand stand for the best people practices.

16

SWOT ANALYSIS OF MOSL

1. Strength

 High technical software of fundamental & technical analysis.  Experts management & analyst team which have best experience in financial sector  Low brokerage  At low margin , high trading  Best customer services like daily report of their financial transaction in stock exchanges, online trading facilities, giving solution of investors query, sms facilities, advisory services.

2. Weakness

 Uncertainty of the market, some time analyst are unable to judge the market trend. Some
time its depend upon the FIIs investments. Some time FIIS entry and exists are uncertain.

 Lack of advertisement of the company  Lack of communication between the investor and analyst  High advise services charges and commission in mutual funds & sip schemes

3. Opportunities

 Hedging in foreign currency market  Trading in commodity market because Motilal Oswal focus more in equity so its have an opportunity to trading also in commodity market  Have an opportunity to be a guarantor of new issues of reputed company.

4. Threats

 The biggest threat of the company is that its brokerage rate because the competitors of the company like 5 paisa which is new emerging company has low brokerage than the Motilal Oswal so threat to lose the investors.

17

 Another threat is that investors now a days prefer a safe investment and do not take a more risk due to a high inflation rate. Investor required a safety and fix income from their investment so they less prefer to invest in equity or commodity.

Performance Highlights - comparision

1. Edelweiss Securities Ltd. Segment sales (net) Agency Business Capital Based Business 370.29 140.16

2. India bulls Securities Ltd. Segment sales Broking & Related Activities Others 618.05 0.59

3. India Info line Ltd. Segment sales ( Net) Commodities Brokerage & Related Equity Brokerage & Related Income Financing & Investing Income Life Insurance Agency Income Marketing & Online Media 3.57 156.36 105.49 0.65 3.09

4. Motilal Oswal Financial Services Ltd. Segment sales (net) Equity Broking & Other Related Activities (Consolidated) Financial Activity (Consolidated) Investment Banking (Consolidated) 18 593.68 35.58 62.82

5. Reliance Capital Ltd. Segment Sales (Net) Asset Management (Consolidated) Consumer Finance (Consolidated) Finance & Investments (Consolidated) General Insurance (Consolidated) 472.92 394.58 1742.76 2346.12

6. Religare Enterprises Ltd. Segment sales Financial Advisory Services Investment Operations 1.13 30.73

Motilal Oswal still need to flourish themselves in financial activity and investment banking compare to other players.

19

LITERATURE REVIEW

ASSOCHAM said stock broking companies should be allowed to operate banks as they are under the supervision of Securities and Exchange Board of India (SEBI).

"Since the stock broking companies have deep penetration into various geographies ..., they can achieve the objective of financial inclusion, which is one of the key objectives of new banking licensing guidelines issued by RBI," ASSOCHAM said in a statement. So the broking company can take a more risk as per their bank capitalisation and gain more return through the invested in various stock instrument. And these are the requirement for the bank to be listed. The minimum paid-up capital requirement of Rs 500 crore should be raised to Rs 1,000 crore within five years of starting the new bank. The stipulation of non-operative holding company holding minimum 40 per cent of paid-up capital for five years will ensure promoter's economic interest during the start-up period. "The reduction to 20 per cent in ten years and 15 per cent in twelve years will serve the cause of necessary diversification," ASSOCHAM said. 49% shares of foreign share holding are allowed in the new bank. ASSOCHAM called for relaxations in statutory liquidity ratio and cash reserve ratio to encourage financial inclusion. "Nearly 60 per cent of Indians do no have a bank account," it said. (ASSOCHAM, 2011)

Our government has given the framework for the financial sector by way of legislations - for equity/MFs, insurance, microfinance, banks, etc. There has been quite a burst of activism among the various regulators in recent years. But the major problem is that investors are not fully aware about the all the instruments properly and does not have a proper knowledge about the allocating to fund, risk factor, profit booking, investment period as per their requirement etc. So the problem is that as per the willingness of the investor they cant get a return what they expect. An informed and engaged customer is far more likely to take correct decisions; time and effort need to be put in that direction, too. People are getting fooled by pyramid schemes, they get sold wrong insurance products, are holding unsuitable MF schemes, get into risky financial products, have wrong asset allocation. Many investors just go by what their friend or colleague has done or recommends, without understanding the suitability of the instrument to
20

their needs. So now a days its necessary to get a proper knowledge about the investment and also related risk with it otherwise it hurts & investor have to pay cost more. (Suresh Sadagopan, 2011) As the Indian equity market is growing, in Indian stock instrument like an equity market mutual fund and portfolio management there is a greater hand of foreign institution investor. A recent research survey by Japan Bank for international operation (JBIC), shows that in the next 3 years, India will be the third most favoured investment destination for Japanese investors. A Smith Barney (a CITI group Division) study says estimated market value of foreign institutional investment in the top 200 companies in India (including ADRs and GRDs) at current market prices isUS$43 billion. This is 18% of the market capitalization of BSE 200.It is established in literature that block shareholders influence the firm performance (Cho & Padmanabhan, 2001). Governance of listed companies plays an important role in foreign intuitional investment decisions Bhalla V.K." (1997) reviewed the various factors influencing the equity price and price earnings ratio. He is of the opinion that equity prices are affected primarily by financial risk considerations that, in turn, affect earnings and dividends. He also stated that market risk in equity is much greater than in bonds, and it influences the price also. He disclosed that many analysts follow price earnings (P/E) ratio to value equity, which is equal to market price divided by earnings per share. He observed that inflationary expectations and higher interest rates tend to reduce P/E ratios whereas growth companies tend to have higher P/E ratios. He suggested that an investor should examine the trend of P/E ratios over time for each company.

The biennial publication Commodity Market Review (CMR) analyses important agricultural commodity market developments likely to have significant implications for FAO member countries, both developed and developing. This issue of the Review is devoted to exploring in depth a variety of issues related to global agricultural commodity value chains. This issue includes articles that focus on both cross-commodity issues, such as strategic trade, foreign direct investment and the effectiveness of technical regulation, as well as on characteristics of individual commodity value chains, such as coffee, cocoa and frozen concentrated orange juice, which are of particular interest in terms of industrial organization. Bose, Suchismita conducted research on The Indian Derivatives Market Revisited in the year 2006. They found that Derivatives products provide certain important economic benefits such as risk management or redistribution of risk away from risk-averse investors towards those
21

more willing and able to bear risk. Derivatives also help price discovery, i.e. the process of determining the price level for any asset based on supply and demand. These functions of derivatives help in efficient capital allocation in the economy; at the same time their misuse also poses a threat to the stability of the financial sector and the overall economy.

22

Knowing the perception of investors regarding different investment avenues will help us in knowing their attitude towards it. Whether they are risk averse or risk affinity. And also help us to know their knowledge regarding investment instrument.

PROBLEM STATEMENT

To know the preferences of investors regarding different stock instruments

1. To know about satisfaction which services do your broker/financial institutes provide to you. 2. In industry investor are not fully aware about all the stock instrument. Investors are investing their money in to different securities without any research of securities (companies) so they losing money. They dont have a proper knowledge about forward market, future market, and option market. 3. In industry investors dont know as per their investment how much risk to be taken and when to enter in the market & when to exist.

4. Another problem with investor is that in industry broking firms are fail to convince to the investors about their investments. And sometimes in industry broking firms are fail to understand the customers requirements.

5. Another problem is that its difficult task for the broking company to evaluate each customers ability to risk and set their returns.

6. Another problem is that investors are only focusing their internal environment of investment. They think only about the maximum return but not focus on present situation of global crisis in the market.

23

RESEARCH OBJECTIVES The objectives of the project are:

 PRIMARY OBJECTIVE To know the preferences of investor regarding the stock instrument

 SECONDARY OBJECTIVE

Secondary objective are following: 1. To check effect of education level on investment in financial instrument decision. 2. To identify the element which creating fear in people towards investing in stock. 3. To know the interest rate affecting investment decision. 4. To get practical exposure of the broking industry. 5. To committed to providing objective educational information for investors. 6. To know the view point of investors on broking agents.

RESEARCH DESIGN

1. Type of research design- The research design use here is Descriptive research design.

2. Population Surat Population

3. Sample 150 Clients of Raj Investment 4. Sampling method Non- probabilistic in that Convenience sampling
24

5. Type of data Both types of data have been use in this project The primary data has been collected by conducting personal interview of people. The rest of entire project are on secondary data.

6. Instrument used Following sources of secondary data are selected for collecting the required data for this project: (1) Internet (2) Newspaper (3) Referred respective firms broachers (4) Articles

Primary data has been collected through Questionnaires.

7. Tools for analysis

Various statistical methods will be use for the analysis and also the various test will be apply.

8. Limitation of Study

y y y y

Foremost is that we have limited knowledge of Broking Industry and about its products. Reaching the customer and conducting surveys. Explaining the customer about the purpose for the project. Respondent also face problems while filling questionnaire.

25