KARNATAK UNIVERSITY

DHARWAD

KOUSALI INSTITUTE OF MANAGEMENT STUDIES

REPORT ON

“SECURITY AND PORTFOLIO MANAGEMENT AND DERIVATIVES MARKET (FINANCIAL

PRODUCTS)”

SUBMITTED BY

GROUP- 4

NAME ROLL NO

MALLAPPA HANABAR MBA09001015

SAVITA GUTTEDAR MBA09001036

SUDHAKAR REDDY MBA09001049

VENKATESH MBA09001053

UNDER THE GUIDENCE OF

DR.N.MARUTI RAO
GOLD:

Gold has been considered as a symbol of wealth and prosperity has held a place of pride as a
precious metal in most religions. But why should one consider investment in Gold. Let us
explore the reasons. The most compelling reason for putting money in Gold is its role as a long-
term or strategic asset.

Gold can be purchased in real form, which has been the most common case in rural areas and
majority of urban population.

With advent of new financial products in the market, Gold has also been made available as a
paper or electronic investment. Some benefits include no making charges; no botheration about
storing as one gets his investment in gold in demat form; no problem of finding a vendor who
can provide the real worth of investment; wholesale rates and much more.

In general, investors looking to invest in gold directly have three choices: they can purchase the
physical asset, they can purchase an ETF (Exchange traded funds) that replicates the price of
gold, or they can trade futures and options in the commodities markets.

 Features:
o The investment can be in real form or in electronic form.
o If the investor wants to invest in electronic form he should have demat a/c.
o The price fluctuations are based on the current market price of the gold.

 Sub types:

o Gold:
This is the most common type of investment in gold. In this investor purchases the
gold in the form of jewelry. As the investment in jewelry includes not only the cost of
gold but also the cost of the copper used to strengthen the gold and the wages of the
crafts people who design and construct the jewelry.

o Gold Coins:
Gold coins are better vehicle than jewelry in for investing in gold. These coins
initially came into existence as currency. Their price is related to two things: the
bullion content and the t coin’s numismatic value. The bullion of the coin depends on
the gold content and price of the gold. This price in terms depends on the market’s
demand for and supply of gold.
 o Gold Bullion:
The gold bullion includes the form of gold bars. These may be bought through gold
dealers and brokerage firms. Once the investor purchases the gold, he/she may take
possession of it or leave it with the dealer or broker. Leaving the gold with the broker
involves storage and insurance cost, which increases the price of the investment.

o Gold mining stock

The investor may also buy the shares of gold mining companies. This, of course, does
not own gold. Instead the firm may own gold mines and mining equipment.
Presumably, the value of shares is related to the value of the gold, but it is possible
for the price of gold to rise while the price of the mining company’s stock declines.

o Gold futures and options:

In addition to gold coins, gold bullion and gold mining shares, the investor may
speculate in gold futures and options. Like many other commodities, there is an active
market in contracts for the future delivery of gold. This market is a recent
development.
There are two major futures exchanges - Multi Commodity Exchange of India Ltd
(MCX) and the National Commodity and Derivatives Exchange Ltd (NCDEX).
Another way to invest in gold as explained above is investment in GOLD Exchange
Traded Funds (ETFs).

 Eligibility:
o He should be major.
o He should have demat a/c.

 Investment limit:
o There is no investment limit.
o Investor can have an amount as low as Rs 5,000.