Sandy Project

RESEARCH REPORT
ON
RISK AND RETURN ANALYSIS OF SECURITY
SUBMITTED TO:
KURUKSHETRA UNIVERSITY
KURUKSHETRA
In partial fulfillment for the degree of

Master Of Business Administration
Session 2009-2011
UNDER THE GUIDANCE OF: SUBMITTED BY:

Mrs: Anika Gupta Name: Sandeep Kumar
M.B.A (Dept.) M.B.A 4th Semester
Assistant Professer Uni. Roll No-
Swami Devi Dyal Institute Of Engg. & Technology
Barwala Distt.Panchkula (Haryana)
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CERTIFICATE
This is to certify that the project report titled ‘RISK AND RETURN ANALYSIS OF
SECURITY’ carried out by Sandeep Kumar S/o Sh.Bhag Singh has been accomplished
under the guidance and supervision of faculty of MBA Department Mrs. Anika Gupta.This
project is being submitted by him in the partial fulfillment of requirements for the award of
the Master of Business Administration from Swami Devi Dyal Institute of Engg. &
Technology Affilated To Kurukhestra University,Kurukhestra.
This is an original work and has not been submitted by her anywhere else for the award of
any degree. All sources of information and help have been duly mentioned and
acknowledged.
Signature of faculty guide:

Date:
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DECLARATION
I hereby declare that the project report entitled “RISK AND RETURN ANALYSIS OF
SECURITY.” is the produce of my sincere effort. This Research Report is being
submitted by me alone, at Swami Devi Dyal Institute Of Engineering & Technology
Barwala, Panchkula(Haryana) for the partial fulfillment of the course MBA.
All sources of information and help have been duly mentioned and acknowledged. Data
enfetched provided in the report are authentic to the best of my knowledge. I have not
submitted this Research report to any other university for the award of degree.
SandeepKumar
MBA Final
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ACKNOWLEDGEMENT
Sometimes words fall short to show gratitude, the same happened with me during this
research report. I take this opportunity to express my gratitude to all the people who have
guided and helped me directly or indirectly in the course of completion of my project.
I feel immense pleasure to give the credit of my project work not only to one individual as
this work is integrated effort of all those who are concerned with it. I want to thanks to all
those individuals who guided me to move on the track.
I sincerely express a deep sense of gratitude and lot of thanks to Mrs.Anika Gupta and
other persons who help me in completing this research report. His valuable suggestions and
helping hands has helped me to complete my project successfully.
Last but not least, I would thank all my friends, faculty members and all respondents who
rendered their precious time for contributing their skills and fill the questionnaire, which
made my research report more appealing and attractive. Their consistent help kept me
motivated and going.
SANDEEP KUMAR
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PREFACE
After having undergone the Research report entitled that is “RISK AND RETURN
ANALYSIS OF SECURITY” I have been able to understand the importance and necessity
of obtaining a professional degree in management. The working of various organs of
organization is captured over here which correlates with one another as it further adds the
vastness of my study.
Hence my attempt is to cover all the organizational activities and related facts so as to have
better control over my primary subject of study. The increased significance of understanding
pivot for modern researches.
The experience which I gained by doing this project was essential at this turning point of my
career.This project is being submitted which content detailed analysis of the research under
taken by me.
The research provides an opportunity to the student to devote his\her skills knowledge and
competencies required during the technical session.
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LIST OF TABLES & GRAPHS
Sr. No. Title Page Number
1. Table of Avg.Risk & Avg.Return of year 2006 64
6. Graph of Avg.Risk & Avg.Return of year 2006 65
TABLE OF CONTENTS
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TOPIC Page No.
1. Introduction 8
A) STATEMENT OF PROBLEM 9
INTRODUCTION OF RISK & RETURN 10-20

INDUSTRY PROFILE 21-41
2. Review of literature 42-44
3. Research Methodology 45-49

RESEARCH DESIGN
DATA OLLECTION TECHNIQUE
NEED OF STUDY
OBJECTIVE OF STUDY
SCOPE OF STUDY
LIMITATIONS
4. Analysis & Interpretation 50-72
5. Finding & Suggestions 73-75
6. Conclusion 76
Bibliography 78
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CHAPTER -1
INTRODUCTION
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STATEMENT OF PROBLEM
The problem undertaken to study in the present project work is to calculate returns and risk
associated with different stocks listed on NSE Stock Exchange.Returns and Risk are
calculated to study the price movements in the stock market. After doing this project one
can make decisions regarding the investment in which company one can expect.
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INTRODUCTION
Investment is the employment of funds with the aim of achieving additional income or
growth in value. The essential quality of an investment is that it involves ‘waiting’ for a
reward. It involves the commitment of resources which have been saved or put away from
current consumption in the hope that some benefits will accrue in future. The term
‘Investment’ does not appear to be as simple as it has been defined. Investment has been
further categorized by financial experts and economists. It has also often been confused
with the term speculation. The following discussion will give an explanation of the various
ways in which investment is related or differentiated from the financial and economic sense
and how speculation differs from investment. However, it must be clearly established that
investment involves long-term commitment.
RETURNS:
A major purpose of investment is to set a return of income on the funds invested. On a bond
an investor expects to receive interest. On a stock, dividends may be anticipated. The
investor may expect capital gains from some investments and rental income from house
property.
RISK:
In the investing world, the dictionary definition of risk is the chance that an
investment’s actual return will be different than expected. Technically, this is measured in
statistics by Standard Deviation. Risk means you have the possibility of losing some, or
even all, of our original investment.
Risk consists of 2 components:
1. Systematic risk (uncontrollable risk) non-diversifiable risk

2. Unsystematic risk (controllable risk) diversifiable risk
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SYSTEMATIC RISK:
The risk that affects the entire market, the factors are beyond the control of the
corporate and the investor. They cannot be avoided by the investor. It is sub-divided into.
a) Market risk
b) Interest rate risk
c) Purchase power risk
UNSYSTEMATIC RISK OF DIVERSIFIABLE RISK:
It is unique to the firm or industry. It stems from managerial inefficiency,

technological changes, consumer preferences, labour problems etc. The magnitude and
nature differs from firm to firm, industry to industry.
It can be classified into 2 types
1) Business risk
 Internal risk
 Fluctuations in sales
 Research and development
 Personal management
 External risk (P,E,S,T factors)
2) Financial risk
It is associated with the capital structure of the company.
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RETURNS
A major purpose of investment is to set a return of income on the funds invested. On a bond
an investor expects to receive interest. On a stock, dividends may be anticipated. The
investor may expect capital gains from some investments and rental income from house
property. Return may take several forms.
Measurement of Returns
The purpose of investment is to get a return or income on the funds invested in different
financial assets. The most important characteristics of financial assets are the size and
variability of their future returns. Since the return on income varies, various statistical
techniques are used to measure it. Over the years, may methods were adopted for
quantifying returns. These are now categorized as traditional and modern techniques of
measurement.
Traditional Method of Measurement
Computation of yield to measure a financial asset’s return is the simplest and oldest
technique of measurement. Yield can be both expected or estimated and actual for a
particular period. The formula used to find yield is:
Expected Cash Income
a) Estimated Yield = ----------------------------

Current Price of Asset
Cash Income
b) Actual Yield = ---------------------

Amount Invested
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The yield that is calculated is for a particular period to find out the return on the amount that
is invested. For example, the annual yield on the Unit Trust Certificate is the dividend
income divided by the amount invested.
Measuring Returns – Improved Technique
The ‘holding period yield’ is one of the new techniques in measuring returns. The
traditional methods did not provide a satisfactory returns measure. Some of the gaps that
were identified were: (a) that the traditional method does not distinguish between divided
and earnings portion that the traditional method does not distinguish between divided and
earnings portion that the company retains (Earnings Yield Method), (b) Dividend Yield
Method ignores the possibility of price appreciation on retained earnings. It is useful only
for those shareholders who wish to retain shares always and are not interested in selling and
anticipate that dividends are not going to change; (c) the yield to maturity is useful only to
those bond holders who will hold it to maturity. All investors may not hold bonds till
maturity for obvious reasons. These methods are thus known to serve a limited purpose
only. The better method measures return through the holding period yield. This measure
appears more rational and clearly defined. It serves two purposes: (a) It measures that total
return per rupee of the original investment, and (b) through this method, comparisons can be
drawn of any asset’s expected return. An asset can be compared with other both historically
and for future periods.
The holding period yield can be used for any asset. For example, returns from savings
accounts, stocks money, real estate and bonds can be compared through this measure. The
formula for the holding period yield is:
Income payments received during the year in Rs. + Capital change for the period in Rs.
Price in rupees of original investment at the beginning of period
A look at this formula shows that the Holding Period Yield (HPY) considers
everything the investor receives over the specified period during which the asset is held
relative to what was originally invested in the assets. It also considers all income payments;
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and positive and negative capital changes during the period. These are then measured
relative to the original investment in rupees. The HPY also measures past receipts of
payments as well as for an unknown future. It is useful for comparing any time period, it
can be used on both Bond and Stocks.
Measure of Dispersion
Dispersion methods help to assess risk in receiving a reward or return on investment. The
greater the potential dispersion, the greater the risk. One of the simplest methods in
calculating dispersion is range. The range, however, has limited importance. It is useful
when there are small samples. It loses its effectiveness when the number of values in a
sample increases. The best and most effective method to find out how the data scattered
around a frequency distribution is to use the standard deviation method. This method is
related to the mean deviation and implies in this case the means as a point of reference from
which deviation occurs. The standard deviation is based on mean and it cannot show any
result without first finding out the mean. The standard deviation is recognized by the
following symbol. The standard deviation is also related to variance. Variance is the
square of standard deviation. In other words, standard deviation is the square root of the
variance. This relationship shows that they have similar statistical characteristics.
Therefore, standard deviation and variance are considered equivalent to each other as
measures of risk. For a security analyst they help in depicting dispersion of HPYs around
HPY.
There are 22 stock exchanges in India, the first being the Bombay Stock Exchange (BSE),
which began formal trading in 1875, making it one of the oldest in Asia. Over the last few
years, there has been a rapid change in the Indian securities market, especially in the
secondary market. Advanced technology and online-based transactions have modernized the
stock exchanges. In terms of the number of companies listed and total market capitalization,
the Indian equity market is considered large relative to the country’s stage of economic
development. The number of listed companies increased from 5,968 in March 1990 to about
10,000 by May 1998 and market capitalization has grown almost 11 times during the same
period.
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The debt market, however, is almost non-existent in India even though there has
been a large volume of Government bonds traded. Banks and financial institutions have
been holding a substantial part of these bonds as statutory liquidity requirement. The
portfolio restrictions on financial institutions’ statutory liquidity requirement are still in
place. A primary auction market for Government securities has been created and a primary
dealer system was introduced in 1995. There are six authorized primary dealers. Currently,
there are 31 mutual funds, out of which 21 are in the private sector. Mutual funds were
opened to the private sector in 1992. Earlier, in 1987, banks were allowed to enter this
business, breaking the monopoly of the Unit Trust of India (UTI), which maintains a
dominant position. Before 1992, many factors obstructed the expansion of equity trading.
Fresh capital issues were controlled through the Capital Issues Control Act. Trading
practices were not transparent, and there was a large amount of insider trading. Recognizing
the importance of increasing investor protection, several measures were enacted to improve
the fairness of the capital market. ‘The Securities and Exchange Board of India (SEBI) was
established in 1988’. Despite the rules it set, problems continued to exist, including those
relating to disclosure criteria, lack of Brokers, capital adequacy, and poor regulation of
merchant bankers and underwriters. There have been significant reforms in the regulation of
the securities market since 1992 in conjunction with overall economic and financial reforms.
In 1992, the SEBI Act was enacted giving SEBI statutory status as an apex regulatory body.
And a series of reforms was introduced to improve investor protection, automation of stock
trading, integration of national markets, and efficiency of market operations. India has seen
a tremendous change in the secondary market for equity. Its equity market will most likely
be comparable with the world’s most advanced secondary markets within a year or two. The
key ingredients that underlie market quality in India’s equity market are:
 Exchanges based on open electronic limit order book

 Nationwide integrated market with a large number of informed traders and fluency
of short or long positions.
 No counterparty risk.
Among the processes that have already started and are soon to be fully implemented
are electronic settlement trade and exchange-traded derivatives.
Before 1995, markets in India used open outcry, a trading process in which traders shouted
and hand signaled from within a pit. One major policy initiated by SEBI from 1993
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involved the shift of all exchanges to screen-based trading, motivated primarily by the need
for greater transparency. The first exchange to be based on an open electronic limit order
book was the National Stock Exchange (NSE), which started trading debt instruments in
June 1994 and equity in November 1994. In March 1995, BSE shifted from open outcry to a
limit order book market. Currently, 17 of India’s stock exchanges have adopted open
electronic limit order. Before 1994, India’s stock markets were dominated by BSE in other
parts of the country.
Recent Developments and Policy Issues.
Financial industry did not have equal access to markets and was unable to
participate in forming prices, compared with market participants in Mumbai (Bombay). As a
result, the prices in markets outside Mumbai were often different from prices in Mumbai.
These pricing errors limited order flow to these markets.
Explicit nationwide connectivity and implicit movement toward one national market
has changed this situation. NSE has established satellite communications which give all
trading members of NSE equal access to the market. Similarly, BSE and the Delhi Stock
Exchange are both expanding the number of trading terminals located all over the country.
The arbitrages are eliminating pricing discrepancies between markets. The Indian capital
market still faces many challenges if it is to promote more efficient allocation and
mobilization of capital in the economy.
Firstly, market infrastructure has to be improved as it hinders the efficient flow of

information and effective corporate governance. Accounting standards will have to adapt to
internationally accept accounting practices.
The court system and legal mechanism should be enhanced to better protect small
shareholders’ rights and their capacity to monitor corporate activities.
Secondly, the trading system has to be made more transparent. Market

information is a crucial public good that should be disclosed or made available to all
participants to achieve market efficiency. SEBI should also monitor more closely cases of
insider trading.
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Thirdly, India may need further integration of the national capital market through
consolidation of stock exchanges. The trend all over the world is to consolidate and merge
existing stock exchanges. Not all of India’s 22 stock exchanges may be able to justify their
existence. There is a pressing need to develop a uniform settlement cycle and common
clearing system that will bring an end to unnecessary speculation based on arbitrage
opportunities.
Fourthly, the payment system has to be improved to better link the banking and
securities industries. India’s banking system has yet to come up with good electronic funds
transfer (EFT) solutions. EFT is important for problems such as direct payments of
dividends through bank accounts, eliminating counterparty risk, and facilitating foreign
institutional investment. The capital market cannot thrive alone; it has to be integrated with
the other segments of the financial system. The global trend is for the elimination of the
traditional wall between banks and the securities market. Securities market development has
to be supported by overall macroeconomic and financial sector environments. Further
liberalization of interest rates, reduced fiscal deficits, fully market-based issuance of
Government securities and a more competitive banking sector will help in the development
of a sounder and a more efficient capital market in India. Capital Market Reforms and
Developments Reforms in the Capital Market Over the last few years, SEBI has announced
several far-reaching reforms to promote the capital market and protect investor interests.
Reforms in the secondary market have focused on three main areas
 structure and functioning of stock exchanges,

 automation of trading and post trade systems,
 And the introduction of surveillance and monitoring systems. Computerized online
trading of securities.
 And settings up of clearing houses or settlement guarantee funds were made
compulsory for stock exchanges.
Stock exchanges were permitted to expand their trading to locations outside their
jurisdiction through computer terminals. Thus, major stock exchanges in India have started
locating computer terminals in far-flung areas, while smaller regional exchanges are
planning to consolidate by using centralized trading under a federated structure.
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Online trading systems have been introduced in almost all stock exchanges. Trading is
much more transparent and quicker than in the past. Until the early 1990s, the trading and
settlement infrastructure of the Indian capital market was poor. Trading on all stock
exchanges was through open outcry, settlement systems were paper-based, and market
intermediaries were largely unregulated.
The regulatory structure was fragmented and there was neither comprehensive registration
nor an apex body of regulation of the securities market. Stock exchanges were run as
“brokers clubs” as their management was largely composed of brokers. There was no
prohibition on insider trading, or fraudulent and unfair trade practices. Since 1992, there has
been intensified market reform, resulting in a big improvement in securities trading,
especially in the secondary market for equity. Most stock exchanges have introduced online
trading and set up clearing houses/corporations. A depository has become operational for
scrip less trading and the regulatory structure has been overhauled with most of the powers
for regulating the capital market vested with SEBI. The Indian capital market has
experienced a process of structural transformation with operations conducted to standards
equivalent to those in the developed markets. It was opened up for investment by foreign
institutional investors (FII’s) in 1992 and Indian companies were allowed to raise resources
abroad through Global Depository Receipts (GDRs) and Foreign Currency Convertible
Bonds (FCCBs). The primary and secondary segments of the capital market expanded
rapidly, with greater institutionalization and wider participation of individual investors
accompanying this growth. However, many problems, including lack of confidence in stock
investments, institutional overlaps, and other governance issues, remain as obstacles to the
improvement of Indian capital market efficiency.
PRIMARY MARKET
Since 1991/92, the primary market has grown fast as a result of the removal of
investment restrictions in the overall economy and a repeal of the restrictions imposed by
the Capital Issues Control Act. In 1991/92, Rs62.15 billion was raised in the primary
market. This figure rose to Rs276.21 billion in 1994/95. Since 1995/1996, however, smaller
amounts have been raised due to the overall downtrend in the market and tighter entry
barriers introduced by SEBI for investor protection .SEBI has taken several measures to
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improve the integrity of the secondary market. Legislative and regulatory changes have
facilitated the corporatization of stockbrokers. Capital adequacy norms have been prescribed
and are being enforced. A mark-to-market margin and intraday trading limit have also been
imposed. Further, the stock exchanges have put in place circuit breakers, which are applied
in times of excessive volatility. The disclosure of short sales and long purchases is now
required at the end of the day to reduce price volatility and further enhance the integrity of
the secondary market.
MARK-TO-MARKET MARGIN AND INTRADAY LIMIT
Under the current clearing and settlement system, if an Indian investor buys and
subsequently sells the same number of shares of stock during a settlement period, or sells
and subsequently buys, it is not necessary to take or deliver the shares. The difference
between the selling and buying prices can be paid or received. In other words, the squaring-
off of the trading position during the same settlement period results in non delivery of the
shares that the investor traded.
Thus, possible at a relatively low cost. FII’s and domestic institutional investors are,
however, not permitted to trade without delivery, since no delivery transactions are limited
only to individual investors. One of SEBI’s primary concerns is the risk of settlement chaos
that may be caused by an increasing number of no delivery transactions as the stock market
becomes excessively speculative.
Accordingly, SEBI has introduced a daily mark-to-market margin and intraday

trading limit. The daily mark-to-market margin is a margin on a broker’s daily position. The
intraday trading limit is the limit to a broker’s intraday trading volume. Every broker is
subject to these requirements.
Each stock exchange may take any other measures to ensure the safety of the
market. BSE and NSE impose on members a more stringent daily margin, including one
based on concentration of business. A daily mark-to-market margin is 100 percent of the
notional loss of the stockbroker for every stock, calculated as the difference between buying
or selling price and the closing price of that stock at the end of that day. However, there is a
threshold limit of 25 percent of the base minimum capital plus additional capital kept with
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the stock exchange or Rs1 million, whichever is lower. Until the notional loss exceeds the
threshold limit, the margin is not payable.
This margin is payable by a stockbroker to the stock exchange in cash or as a bank

guarantee from a scheduled commercial bank, on a net basis. It will be released on the pay-
in day for the settlement period. The margin money is held by the exchange for 6-12 days.
This cost the broker about 0.4-1.2 percent of the notional loss, assuming that the broker’s
funding cost is about 24-36 percent (Endo 1998).
Thus, speculative trading without the delivery of shares is no longer cost-

free. Each broker’s trading volume during a day is not allowed to exceed the intraday
trading limit. This limit is 33.3 times the base minimum capital deposited with the exchange
on a gross basis, i.e., purchase plus sale. In the event of brokers wishing to exceed this limit,
they have to deposit additional capital with the exchange and this cannot be withdrawn for
six months.
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INDUSTRY PROFILE
Stock exchange is an organized market place where securities are traded. These securities
are issued by the government, semi-government bodies, public sector undertakings and
companies for borrowing funds and raising resources. Securities are defined as any
monetary claims (promissory notes or I.O.U) and also include shares, debentures, bonds and
etc., if these securities are marketable as in the case of the government stock, they are
transferable by endorsement and alike movable property. They are tradable on the stock
exchange. So, are the case shares of companies.
Under the Securities Contract Regulation Act of 1956, securities’ trading is regulated
by the Central Government and such trading can take place only in stock exchanges
recognized by the government under this Act. As referred to earlier there are at present 23
such recognized stock exchanges in India. Of these, major stock exchanges, like Bombay
Stock Exchange, National Stock Exchange, Inter-Connected Stock Exchange, Calcutta,
Delhi, Chennai, Hyderabad and Bangalore etc. are permanently recognized while a few are
temporarily recognized. The above act has also laid down that trading in approved contract
should be done through registered members of the exchange. As per the rules made under
the above act, trading in securities permitted to be traded would be in the normal trading
hours (10 A.M to 3.30 P.M) on working days in the trading ring, as specified for trading
purpose.
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Contracts approved to be traded are the following:
 Spot delivery deals are for deliveries of shares on the same day or the next day as the
payment is made.
 Hand deliveries deals for delivering shares within a period of 7 to 14 days from the
date of contract.
 Delivery through clearing for delivering shares with in a period of two months from
the date of the contract, which is now reduce to 15 days.(Reduced to 2 days in demat
trading)
 Special Delivery deals for delivering of shares for specified longer periods as may be
approved by the governing board of the stock exchange.
Except in those deals meant for delivery on spot basis, all the rest are to be put through
by the registered brokers of a stock exchange. The securities contracts (Regulation) rules of
1957 laid down the condition for such trading, the trading hours, rules of trading, settlement
of disputes, etc. as between the members and of the members with reference to their clients.
HISTORY OF STOCK EXCHANGES IN INDIA
The origin of the Stock Exchanges in India can be traced back to the later half of 19th
century. After the American Civil War (1860-61) due to the share mania of the public, the
number of brokers dealing in shares increased. The brokers organized an informal
association in Mumbai named “The Native Stock and Share Brokers Association in
1875”.later evolved as Bombay stock exchange. Increased activity in trade and commerce
during the First World War and Second World War resulted in an increase in the stock
trading. The Growth of Stock Exchanges suffered a set after the end of World War.
Worldwide depression affected those most of the Stock Exchanges in the early stages had a
speculative nature of working without technical strength. After independence, government
took keen interest to regulate the speculative nature of stock exchange working. In that
direction, securities and Contract Regulation Act 1956 was passed, this gave powers to
Central Government to regulate the stock exchanges. Further to develop secondary markets
in the country, stock exchanges established at Mumbai, Chennai, Delhi, Hyderabad,
Ahmedabad and Indore. The Bangalore Stock Exchange was recognized in 1963. At
present there are 23 Stock Exchanges. Till recent past, floor trading took place in all
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Stock Exchanges. In the floor trading system, the trade takes place through open outcry
system during the official trading hours. Trading posts are assigned for different securities
whereby and sell activities of securities took place. This system needs a face – to – face
contact among the traders and restricts the trading volume. The speed of the new
information reflected on the prices was rather than the investors. The Setting up of NSE and
OTCEI (Over the counter exchange of India with the screen based trading facility resulted in
more and more Sock exchanges turning towards the computer based trading. BSE
introduced the screen based trading system in 1995, which known as BOLT (Bombay on –
line Trading. System) Madras Stock Exchange introduced Automated Network Trading
System (MANTRA) on October 7, 1996 Apart from Bombay Stock Exchanges have
introduced screen based trading.
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FUNCTIONS OF STOCK EXCHANGE
Maintain Active Trading:

Shares are traded on the stock exchanges, enabling the investors to buy and sell securities.
The prices may vary from transaction to transaction. A continuous trading increases the
liquidity or marketability of the shares traded on the stock exchanges.
Fixation of Prices:
Price is determined by the transactions that flow from investors demand and the supplier’s
preferences. Usually the traded prices are made known to the public. This helps the
investors to make the better decision.
Ensures safe and fair dealings:
The rules, regulations and bylaws of the Stock Exchanges provide a measure of safety to the
investors. Transactions are conducted under competitive conditions enabling the investors
to get a fair deal.
Aids in financing the Industry:
A continuous market for shares provides a favorable climate for raising capital. The
negotiability and transferability of the securities, investors are willing to subscribe to the
initial public offering (IPO). This stimulates the capital formation.
Dissemination of Information:
Stock Exchanges provide information through their various publications. They publish the
share prices traded on their basis along with the volume traded. Directory of Corporate
Information is useful for the investor’s assessment regarding the corporate.
Handouts,handbooks and pamphlets provide information regarding the functioning of the
Stock Exchanges.
Performance Inducer:
The prices of stocks reflect the performance of the traded companies. This makes the
corporate more concerned with its public image and tries to maintain good performance.
Self-regulating organization:
The Stock Exchanges monitor the integrity of the members, brokers, listed companies and
clients. Continuous internal audit safeguards the investors against unfair trade practices. It
settles the disputes between member brokers, investors and brokers.
REGULATORY FRAME WORK
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This Securities Contract Regulation Act, 1956 and Securities and Exchange board of India
(SEB1) Act, 1992, provides a comprehensive legal framework. A 3-tier regulatory structure
comprising the ministry of finance, SEB1 and the Governing Boards of the Stock
Exchanges regulates the functioning of Stock Exchanges.
Ministry of finance
The Stock Exchange division of the Ministry of Finance has powers related to the
application of the provision of the SCR Act and licensing of dealers in the other area.
According to SEBI Act, The Ministry of Finance has the appellate and the supervisory
power over the SEBI. It has powered to grant recognition to the Stock Exchange and
regulation of their operations. Ministry of Finance has the power to approve the
appointments of executives chiefs and the nominations of the public representatives in the
government Boards of the Stock Exchanges. It has the responsibility of preventing
undesirable speculation.
The Securities and Exchange Board of India

The Securities and Exchange Board of India even though established in the year 1988.
Received statutory powers only on 30th January 1992. Under the SEBI Act, a wide variety
of powers are vested in the hands of SEBI. SEBI has the powers to regulate the business of
Stock Exchanges, other security and mutual funds. Registration and regulation of market
intermediaries are also carried out by SEBI. It has responsibility to prohibit the fraudulent
unfair trade practices and insider dealings. Takeovers are also monitored by the SEBI has
the multi pronged duty to promote the healthy growth of the capital market and protect the
investors.
The Governing Board of Stock Exchanges:

The Governing Board of the Stock Exchange consists of elected members of directors,
government nominees and public representatives. Rules, by laws and regulations of the
Stock Exchange substantial powers to the executive director for maintaining efficient and
smooth day-to day functioning of Stock Exchange. The Governing Board has the
responsibility to maintain and orderly and well-regulated market.
The Governing body of the Stock Exchange consists of 13 members of which
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 Six members of the Stock Exchange are elected by the members of the Stock
Exchange.
 Central Government nominates not more than three members.
 The board nominates three public representatives.
 SEBI nominates persona not exceeding three and
 The Stock Exchange appoints one Executive Director.
One third of the elected members retire at annual general meeting (AGM). The retired
member can offer himself for election if he is not elected for two consecutive years. If a
member serves in the governing body for two years consecutively, he should refrain offering
himself for another two years.
The members of the governing body elect the president and vice-president. It needs to
approval from the Central Government or the Board. The office tenure for the president and
vice-president is on year. They can offer themselves for re-election, if they have not held for
two consecutive years. In that case they can offer themselves for re-election after a gap of
one-year period.
NATIONAL STOCK EXCHANGE
The National Stock Exchange (NSE) of India became operational in the capital market
segment on third November 1994 in Mumbai. The genesis of the NSE lies in the
recommendations of the pherwani committee (1991). Apart from the NSE. It had
recommended for the establishment of National Stock market System also. The committee
pointed out some major defects in the Indian stock market.
The defects specified are.
 Lack of liquidity in most of the markets in terms of depth and breadth.
Page 26
 Lack of ability to develop markets for debt.
 Lack of infrastructure facilities and outdated trading system.
 Lack of transparency in the operations that affect investors’ confidence.
 Outdated settlement system that are inadequate to cater to the growing volume,
leading to delays.
 Lack of single market due to the inability of various stock exchanges to function
cohesively with legal structure and regulatory framework.
These factors led to the establishment of the NSE.
The main objectives of NSE are as follows
 To establish a nationwide trading facility for equities, debt and hybrid instruments
 To ensure equal access investors all over the country through appropriate
communication network.
 To provide a fair, efficient and transparent securities market to investors using an
electronic communication network.
 To enable shorter settlement cycle and book entry settlement system.
 To meet current international standards of securities market.
Promoters of NSE: IDBI, ICICI, IFCI, LIC, GIC, SBI, Bank of Baroda. Canara Bank,
Corporation Bank, Indian Bank, Oriental Bank of Commerce. Union Bank of India, Punjab
National Bank, Infrastructure Leasing and Financial Services, Stock Holding Corporation of
India and SBE capital market are the promoters of NSE.
MEMBERSHIP
Membership is based on factors such as capital adequacy, corporate structure, track record,
education, experience etc. Admission is a two-stage process with applicants requiring going
through a written examination followed by an interview. A committee consisting of
experienced people from the industry to assess the applicant’s capability to operate as an
exchange member, interviews candidates. The exchange admits members separately to
Wholesale Debt Market (WDM) segment and the capital market segment. Only corporate
members are admitted on the debt market segment whereas individuals and firms are also
eligible on the capital market segment. Eligibility criteria for trading membership on the
segment of WDM are as follows.
 The persons eligible to become trading members are bodies corporate, companies
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 Institutions including subsidiaries of banks engaged in financial services and such
other
 Persons or entities as may be permitted form time to time by RBI/SEBI.
 The whole-time directors should possess at least two years experience in any activity
related to banking or financial services or treasury.
 The applicant must possess a minimum net worth of Rs.2 cores.
 The applicant must be engaged solely in the business of securities and must not be
engaged in any fund-based activities.
The securities market achieves one of the most important functions of channeling idle
resources to productive resources or from less productive resources to more productive
resources. Hence in the broader context the people who save and investors who invest focus
more towards the economy’s abilities to invest and save respectively. This enhances savings
and investments in the economy, the two pillars for economic growth. The Indian Capital
Market has come a long way in this process and with a strong regulator it has been able to
usher an era of a modern capital market regime. The past decade in many ways has been
remarkable for securities market in India. It has grown exponentially as measured in terms
of amount raised from the market, the number of listed stocks, market capitalization, trading
volumes and turnover on stock exchanges, and investor population. The market has
witnessed fundamental institutional changes resulting in drastic reduction in transaction
costs and significant improvements in efficiency, transparency and safety.
Dependence on Securities Market
Three main sets of entities depend on securities market- the corporate, the government &
households. While the corporate and governments raise resources from the securities market
to meet their obligations, the households invest their savings in securities.
Primary Market & Secondary Market
The securities market comprises two segments- primary market (new issues, offer for sale)
& secondary market (trading of stocks). There are two major types of issuers who issue
securities. The corporate entities issue mainly debt and equity instruments (shares,
debentures, etc.), while the governments (central and state governments) issue debt
securities (dated Securities, treasury bills). The two major exchanges, namely the NSE and
the BSE provide trading of securities.
Laws governing capital market
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The four main legislations governing the securities market are:
a) The SEBI Act, 1992 which establishes SEBI to protect investors and develop and
regulate the Markets.
b) The Companies Act, 1956, which sets out the code of conduct for the corporate
sector in relation to issue, allotment and transfer of securities, and disclosures to be made in
public issues.
c) The Securities Contracts (Regulation) Act, 1956, read with the Securities Contracts
(Regulation) Rules, 1957 which provide for regulation of transactions in securities through
control over stock exchanges, and
d) The Depositories Act, 1996 which provides for electronic maintenance and transfer
of ownership of demat securities.
Regulators
SEBI is the primary regulator of the Securities Market and the entities operating therein.
The SEBI Act and the Depositories Act are mostly administered by SEBI. The rules under
the securities laws are framed by government and regulations by SEBI. All these are
administered by SEBI. The powers under the Companies Act relating to issue and transfer
of securities and non-payment of dividend are administered by SEBI in case of listed public
companies and public companies proposing to get their securities listed
Nifty 50
The 50 stocks that were most favored by institutional investors in the 1960s and 1970s.
Companies in this group were usually characterized by consistent earnings growth and high
P/E ratios. The Nifty-50 stocks got their notoriety in the bull markets of the 1960s and early
1970s. They became known as "one-decision" stocks because investors were told. They
could buy and hold forever.
Examples of Nifty-50 stocks included General Electric, Coca-Cola, and IBM. However, part
of this list included companies that have been troubled in the last decade, such as Xerox and
Polaroid.
Nifty Junior
The CNX Nifty Junior is an index for companies on the National Stock Exchange
of India. It consists of 50 companies representing approximately 10% of the traded value of
Page 29
all stocks on the National Stock Exchange of India. The CNX Nifty Junior is owned and
operated by India Index Services and Products Ltd. It is quoted using the symbol
NSMIDCP.
The CNX Nifty Junior and the S&P CNX Nifty represent the 100 most liquid
commodities traded on the National Stock Exchange of India. Together, they form a disjoint
set; that is to say, no one company can be listed on both indices simultaneously.
Equity
Stock or any other security representing an ownership interest.

On the balance sheet, the amount of the funds contributed by the owners (the stockholders)
plus the retained earnings (or losses). Also referred to as "shareholder's equity”. In the
context of margin trading, the value of securities in a margin account minus what has been
borrowed from the brokerage. In the context of real estate, the difference between the
current market value of the property and the amount the owner still owes on the mortgage.
Thus, it is the amount, if any; the owner would receive after selling a property and paying
off the mortgage.
Equity is a term whose meaning depends very much on the context. In general, you
can think of equity as ownership in any asset after all debts associated with that asset are
paid off. For example, a car or house with no outstanding debt is considered the owner's
equity since he or she can readily sell the items for cash. Stocks are equity because they
represent ownership of a company, whereas bonds are classified as debt because they
represent an obligation to pay and not ownership of assets.
Market Value
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The current quoted price at which investors buy or sell a share of common stock or a
bond at a given time. Also known as "market price” The market capitalization plus the
market value of debt. Sometimes referred to as "total market value".
In the context of securities, market value is often different from book value because the
market takes into account future growth potential. Most investors who use fundamental
analysis to pick stocks look at a company's market value and then determine whether or not
the market value is adequate or if it's undervalued in comparison to its book value, net assets
or some other measure.
Stock
A type of security that signifies ownership in a corporation and represents a claim on part of

the corporation’s assets and earnings. There are two main types of stock: common and
preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to
receive dividends. Preferred stock generally does not have voting rights, but has a higher
claim on assets and earnings than the common shares. For example, owners of preferred
stock receive dividends before common shareholders and have priority in the event that a
company goes. Bankrupt and is liquidated. Also known as "shares" or "equity".
A holder of stock (a shareholder) has a claim to a part of the corporation's assets and
earnings. In other words, a shareholder is an owner of a company. Ownership is determined
by the number of shares a person owns relative to the number of outstanding shares. For
example, if a company has 1,000 shares of stock outstanding and one person owns 100
shares, that person would own and have. Claim to 10% of the company’s assets Stocks are
the foundation of nearly every portfolio. Historically, they have outperformed most other
investments over the long run.
Shareholder
Any person, company, or other institution that owns at least 1 share in a company. A
shareholder may also be referred to as a stockholder.
Shareholders are the owners of a company. They have the potential to profit if the company
does well, but that comes with the potential to lose if the company does poorly.
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Share
A unit of ownership interest in a corporation or financial asset. While owning shares in

a business does not mean that the shareholder has direct control over the business's day-to-
day operations, being a shareholder does entitle the possessor to an equal distribution in any
profits, if any are declared in the form of dividends. The two main types of shares are
common shares and preferred shares.
In the past, shareholders received a physical paper stock certificate that indicated that they
owned "x" shares in a company. Today, brokerages have electronic records that show
ownership details. Owning a paperless share makes conducting trades a simpler and
more streamlined process, which is a far cry from the days were stock certificates needed to
be taken to a. Brokerage before a trade could be conducted. While shares are often used
to refer to the stock of a corporation, shares can also represent ownership of other classes of
financial assets, such as mutual funds.
Risk- Risk is defined as uncertainty in outcomes
The chance that an investment's actual return will be different than expected. This includes
the possibility of losing some or all of the original investment. It is usually measured by
calculating the standard deviation of the historical returns or average returns of a specific
investment. A fundamental idea in finance is the relationship between risk and return. The
greater the amount of risk that an investor is willing to take on, the greater the
potential return. The reason for this is that investors need to. be compensated for taking
on additional risk
Stock Option
A privilege, sold by one party to another, that gives the buyer the right, but not the
obligation, to buy (call) or sell (put) a stock at an agreed-upon price within a. certain period
or on a specific date. In the U.K., it is known as a "share option”. American options can be
exercised anytime between the date of purchase and the expiration date. European options
may only be redeemed at the expiration date. Most exchange-traded stock options are
American.
Security
Page 32
An instrument representing ownership (stocks), a debt agreement (bonds), or the rights to
ownership (derivatives).A security is essentially a contract that can be assigned a value
Andrade.
Examples of a security include a note, stock, preferred share, bond, debenture, option,
future, swap, right, warrant, or virtually any other financial asset.
Closing Price
The final price at which a security is traded on a given trading day. The closing price
represents the most up-to-date valuation of a security until trading commences again on the
next trading day.
Page 33
CHAPTER-2
REVIEW
OF
LITERATURE
Page 34
REVIEW OF LITERATURE
Dr. Erich Helfert's work has become a classic, and he has been of substantial help to my company
with respect to teaching our people how to think about the numbers which drive our company.
-- Robert J. Saldich, President and Chief Executive Officer, Raychem Corporation; July 1997
Dr. Helfert's book and his teachings go a long way toward removing the mystery from the financial
workings of an enterprise. His approach allows managers from all areas of the business to
understand how their decisions impact shareholder value. -- Stephen E. Frank, President and Chief
Operating Officer, Southern California Edison; March 15, 1999
Erich Helfert has contributed to the development of financial skills of TRW managers through his
case study preparation and presentations, his book Techniques of Financial Analysis, and his
instruction. He continues to be included as a highly rated faculty member in TRW's management
development programs. -- Peter S. Hellman, President and Chief Operating Officer, TRW Inc.; May
1996
Erich Helfert has played an instrumental role in teaching HP managers of both financial and non-
financial backgrounds in our long-standing Functional Management Program. His excellent financial
overviews and simplified models effectively broaden our managers' understanding and ownership of
their fiscal responsibility to HP and our shareholders. -- Robert P. Wayman, Executive Vice
President, Chief Financial Officer, Hewlett-Packard Company; December 1997
Erich Helfert possesses a rare ability to make financial concepts understandable to individuals who
lack a financial background. As a result we had Dr. Helfert conduct shareholder value creation
classes for all senior managers, and create a shareholder value course for all other salaried and
hourly employees. The results of these efforts exceeded our high expectations. -- L. Pendleton
Siegel, Chairman and Chief Executive Officer, Potlatch Corporation; February 1999
Erich Helfert's Techniques of Financial Analysis is a bona fide treasury for executives, managers
and entrepreneurs who need to understand financial management. I have used and recommended this
great work in both corporate and university programs for more than ten years. Erich Helfert
possesses unique abilities to make clear the arcane that frequently enshrouds topics of financial
management. -- Allen B. Barnes, Provost, IBM Advanced Business Institute; March 1, 1999
Erich Helfert's writing and teaching have become a mainstay in our 'Renewal Series' at AMOCO.
This series, in its third year and directed at the top 3,500 leaders/managers in AMOCO world-wide,
is an aggressive approach at helping to transform our culture through the use of early educational
interventions that cascade through the organization. Erich's business and strategic sense have been
recognized as valuable guides to our process. -- William H. Clover, Ph.D., Manager of Training and
Page 35
AMOCO Learning Center; January 1996
We have received favorable feedback from our management team as to the timeliness and
importance of the Shareholder Value sessions facilitated by Dr. Helfert for 3M. His ability to make
financial concepts understandable to non-financial managers was documented, and his credibility
and content added significantly to the success of our educational effort. Shareholder value concepts
helped people understand why the recent portfolio reorganization decisions--a significant departure
from past practices--were necessary. -- Giulio Agostini, Senior Vice President, Finance and Office
Administration, 3M Corporation; Sept. 1997
2.) By Madhusudan Mohanty and Philip Turner
The conventional view is that microeconomic reforms after the 1997-98 Asian financial crisis have
greatly strengthened banking systems in Asia. Banks have become better capitalised, external
exposures have been reduced and credit risk has been managed more effectively. But this
conventional view does not take enough account of the macroeconomic background. A sharp rise in
domestic savings, combined with the recent large-scale sterilised intervention and easy monetary
policy, has led to very easy financing conditions for banks. Bank credit expanded. Banks have
accumulated a large stock of government bonds. How these conditions will change and how this will
affect banks in Asia is uncertain. Supervisory authorities therefore need to be sure that the present
very liquid position of most banking systems in Asia does not allow significant (but so far only
latent) increases in market and credit risk to go undetected.
The conventional view is that microeconomic reforms after the 1997-98 Asian financial crisis have
greatly strengthened banking systems in Asia. Banks have become better capitalised, external
exposures have been reduced and credit risk has been managed more effectively. But this
conventional view does not take enough account of the macroeconomic background. A sharp rise in
domestic savings, combined with the recent large-scale sterilised intervention and easy monetary
policy, has led to very easy financing conditions for banks. Bank credit expanded. Banks have
accumulated a large stock of government bonds. How these conditions will change and how this will
affect banks in Asia is uncertain.
Page 36
CHAPTER-3
RESEARCH
METHODOLOGY
Page 37
RESEARCH METHODOLOGY
Research project has a specified framework for collecting the data in an effect manner. Such
framework is called “Research Design”. The research process consisted of following steps:
Developing the Research Plan:
It is very important to researching anything to know about its main sources where we get
the main information regarding the research plan. The development of research plan has
following steps:
Data Sources:
There are two types of data were taken into consideration i.e. Secondary data and primary
data. The secondary data has been used to make the analysis because lack of sufficient time
and resources to collect the primary data.
Secondary Data:
Secondary data is that data which is already existed. This is indirect collection of data from
sources containing past or recent past information like:-
Annual reports,
Balance sheet,
Books,
Newspapers and Magazines
and Other company’s publications.
A. Research Design-:
Research design specifies the methods and procedures for conducting a particular study. A research
design is the arrangement of conditions for collection and analysis of the data in a manner that aims
to combine relevance to the research purpose with economy in procedure. Research design is
broadly classified into three types as
 Exploratory Research Design
 Descriptive Research Design
 Causal Research Design
I have chosen the descriptive research design.
Page 38
DESCRIPTIVE RESEARCH DESIGN:
Descriptive research studies are those studies which are concerned with described the
characteristics of particular individual. In descriptive as well as in diagnostic studies, the
researcher must be able to define clearly, what he wants to measure and must find adequate
methods for measuring it along with a clear cut definition of population he want to study.
Since the aim is to obtain complete and accurate information in the said studies, the
procedure to be used must be carefully planned. The research design must make enough
provision for protection against bias and must maximize reliability, with due concern for the
economical completion of the research study.
B. Data Collection Techniques-:

Data Sources:
There are two types of data were taken into consideration i.e. Secondary data and primary
data.
PRIMARY DATA
Primary data are those which are collected afresh and for the first time and happen to be
original by character. In my project simple drafted questionnaire is given to every customer
to which come to the company office to fill. Personal and telephonic interviews,
observation, personal opinion and view point of the respondents about their experience with
the company which helped in the completion of the project.
SECONDARY DATA
Secondary data are those data which is already collected by another person and we just use
them for purpose. I also use secondary that like data of different schemes of the company,
data about the profile of the customers.
NEED OF THE STUDY
Stock Markets have existed in India for a very long time yet the professionals in the
field of finance talking negatively about these instruments. The reason why I bring it up
Page 39
again is that it is very important to understand what the old system was verse the new the
old system were based on trust. They were closed group system and hence deviation from
truly competitive markets. Such closed groups are vulnerable to problem when the demand
of the economy reach beyond the capacity of the group and group has expended without
open and transparent criteria for entry, the net work of trust gets disrupted, with the result
that the system is disrupted by frauds.
On the other hand, the modern market place of Stock Markets, having well
developed risk management, transparent rules for entry and stringent regulation, is faceless.
That the old type system had to transform into a new is definitely clear they have played a
very important role in the past. In is merely that had to modern markets to keep up with the
demand of the times.
TOOLS OF DATA COLLECTION
The present data is based upon secondary data sources:
 Data collected from journals, magazines and newspapers.
 Data collected from the reference books.
OBJECTIVE OF THE STUDY
The objectives aim to highlight the reasons how important is the financial system and
financial statement for an organization or company. There are various objectives of the
study are as follows:
1. The main objective of this project is to analyze the price fluctuations of various
companies.
2. To observe the relation between Returns and Risk in the daily fluctuations in prices.
3. To evaluate the price movements of the selected stocks based on fundamental

analysis.
4. To safeguard the interest of investing public having dealing on the exchange.
Page 40
SCOPE OF THE STUDY
The present study has been undertaken to observe the risk and returns associated with few
selected stocks. The scope of the study consists of 15 Company stocks from different
sectors like infrastructure, Pharmacy, Automobile, Power, Public Sector and Energy etc., the
scope of the study is confined to 50 Companies
LIMITATIONS
1. This project report data collected from secondary sources only.
2. This project analysis report may not be applicable in all equity markets.
3. Project took only 15 companies of NSE for equity analysis. It will not applicable to
total NSE’S Nifty Index.
4. The accuracy of the study is based on the accuracy of the data presented in the NSE
listings.
5. Detailed study of topic was not possible due to limited size of the project. The time
taken for the study is limited.
Page 41
CHAPTER-4
ANALYSIS
&
INTERPRETATION
Page 42
Page 43
ABB RETURNS FOR THE YEAR 2010
(Deviation)
2
Month Start End Returns Avg.Ret Deviation
0.06861233 0.01404433 0.00019724

January 454 485.15 5 0.054568 5 3
- - 0.07564310
February 471.05 367.2 0.22046492 0.054568 0.27503292 6
0.15324324 0.09867524 0.00973680

March 370 426.7 3 0.054568 3 4
0.14279009 0.08822209 0.00778313

April 426.15 487 7 0.054568 7 8
0.32846938 0.27390138
May 490 650.95 8 0.054568 8 0.07502197
0.16876876 0.11420076 0.01304181

June 666 778.4 9 0.054568 9 6
- - 0.02444934
July 780 700.6 0.10179487 0.054568 0.15636287 8
0.09165467 0.03708667 0.00137542

August 695 758.7 6 0.054568 6 2
Septembe 0.02549186 - 0.00084542

r 764.95 784.45 2 0.054568 0.02907614 2
- -
October 785.1 769.55 0.01980639 0.054568 0.07437439 0.00553155
Page 44
Novembe 0.00364056
r 745.35 741.05 -0.0057691 0.054568 -0.0603371 6
0.02361889 0.00095784
December 749.4 767.1 5 0.054568 -0.0309491 7
0.65481397 0.21822423
Total 9 2
Standard Deviation 0.134853
BHARATI AIRTEL RETURNS FOR THE YEAR 2010
(Deviation)
2
- - 0.00407767
January 715 633.95 0.11335664 -0.0495 0.06385664 1
0.01397490 0.06347490 0.00402906

February 629.7 638.5 9 -0.0495 9 4
- 0.03851533 0.00148343
March 632.7 625.75 0.01098467 -0.0495 1 1
0.20170817 0.25120817 0.06310554

April 626.4 752.75 4 -0.0495 4 7
0.07160122 0.12110122 0.01466550

May 765.35 820.15 8 -0.0495 8 7
June 870 802.15 - -0.0495 - 0.00081159
Page 45
0.07798851 0.02848851 5
- - 0.19349929
July 803.15 410.1 0.48938554 -0.0495 0.43988554 2
0.01578947 0.06528947 0.00426271

August 418 424.6 4 -0.0495 4 5
Septembe 0.00023886 0.04973886 0.00247395

r 418.65 418.75 3 -0.0495 3 4
- - 0.06919987
October 426 292.85 0.31255869 -0.0495 0.26305869 2
Novembe 0.02585616 0.07535616 0.00567855

r 292 299.55 4 -0.0495 4 2
0.08150213 0.13100213 0.01716155

December 304.9 329.75 2 -0.0495 2 9
0.38044875
Total -0.5936031 9
BHEL RETURNS FOR THE YEAR 2010
(Deviation)
2
January 1372 1320.8 - 0.049991 - 0.00762282
Page 46
0.03731778 0.08730878 4
February 1315 1403.85 0.06756654 0.049991 0.01757554 0.0003089
0.09064981 0.04065881
March 1385 1510.55 9 0.049991 9 0.00165314
0.08927631 0.03928531 0.00154333

April 1520 1655.7 6 0.049991 6 6
0.27851964 0.22852864 0.05222534

May 1703.65 2178.15 9 0.049991 9 3
- 0.00030469
June 2134.6 2204.05 0.03253537 0.049991 0.01745563 9
0.00058322 - 0.00244112
July 2229 2230.3 1 0.049991 0.04940778 9
0.02644444 -
August 2250 2309.5 4 0.049991 0.02354656 0.00055444
Septembe - 0.00209246
r 2319 2328.85 0.00424752 0.049991 0.04574348 6
- - 0.00742168
October 2301 2217.8 0.03615819 0.049991 0.08614919 3
Novembe 0.01529446 -
r 2209.95 2243.75 4 0.049991 0.03469654 0.00120385
0.06825202 0.01826102 0.00033346

December 2249.75 2403.3 8 0.049991 8 5
0.59989339 0.07770527
Total 5 4
Page 47
CIPLA RETURNS FOR THE YEAR 2010
(Deviation)
2
0.02647058 - 0.00071660
January 187 191.95 8 0.05324 0.02676941 1
- - 0.00311857
February 192 191.5 0.00260417 0.05324 0.05584417 1
0.17047872 0.11723872 0.01374491

March 188 220.05 3 0.05324 3 8
0.10183066 0.04859066 0.00236105

April 218.5 240.75 4 0.05324 4 3
- - 0.01864759
May 243.05 222.8 0.08331619 0.05324 0.13655619 3
0.00529401
June 225 253.35 0.126 0.05324 0.07276 8
0.00105055
July 253.35 275.05 0.08565226 0.05324 0.03241226 5
- -
August 277 270.85 0.02220217 0.05324 0.07544217 0.00569152
Septembe 0.03284132 - 0.00041610

r 271 279.9 8 0.05324 0.02039867 6
0.01448763 - 0.00150174
October 283 287.1 3 0.05324 0.03875237 6
Novembe 0.12596762 0.07272762 0.00528930

r 284.2 320 8 0.05324 8 8
0.06331323 0.01007323
December 315.1 335.05 4 0.05324 4 0.00010147
Page 48
0.63891953 0.05793345
Total 5 9
HCL TECH RETURNS FOR THE YEAR 2010
(Deviation)
2
- - 0.01381411
January 116.5 116.1 0.00343348 0.1141 0.11753348 8
- - 0.04520535
February 111.15 100.2 0.09851552 0.1141 0.21261552 9
0.04132653 - 0.00529597
March 98 102.05 1 0.1141 0.07277347 8
0.29139731 0.17729731 0.03143433

April 100.55 129.85 5 0.1141 5 8
0.02700677
May 130.55 166.9 0.27843738 0.1141 0.16433738 5
0.08110465 - 0.00108869
June 172 185.95 1 0.1141 0.03299535 3
0.29569892 0.18159892 0.03297816

July 186 241 5 0.1141 5 9
0.23966942 0.12556942
August 242 300 1 0.1141 1 0.01576768
Page 49
Septembe 0.13979933 0.02569933 0.00066045
r 299 340.8 1 0.1141 1 6
- - 0.04780002
October 342 306.25 0.10453216 0.1141 0.21863216 3
Novembe 0.11438016 0.00028016 7.84926E-

r 302.5 337.1 5 0.1141 5 08
0.09369024 - 0.00041655
December 339.95 371.8 9 0.1141 0.02040975 8
1.36902280 0.22146822
Total 8 5
INFOSYS RETURNS FOR THE YEAR 2010
(Deviation)
2
0.17083333 0.02493333 0.00062167

January 1116 1306.65 3 0.1459 3 1
- - 0.03721817
February 1292 1231.25 0.04702012 0.1459 0.19292012 4
0.08694581 - 0.00347559
March 1218 1323.9 3 0.1459 0.05895419 6
April 1331.15 1509.25 0.13379408 0.1459 - 0.00014655
Page 50
8 0.01210591 3
0.05591737 - 0.00809687
May 1520.1 1605.1 4 0.1459 0.08998263 3
0.09976166 - 0.00212874
June 1615.35 1776.5 2 0.1459 0.04613834 6
0.16593713 0.02003713 0.00040148

July 1770.55 2064.35 8 0.1459 8 7
0.03253391 - 0.01285186
August 2064 2131.15 5 0.1459 0.11336609 9
Septembe 0.07778219 - 0.00464003

r 2139.95 2306.4 1 0.1459 0.06811781 6
- - 0.03961415
October 2330 2206.2 0.05313305 0.1459 0.19903305 4
Novembe 0.08004993 - 0.00433623

r 2203 2379.35 2 0.1459 0.06585007 1
0.07173465 - 0.00550049
December 2427 2601.1 2 0.1459 0.07416535 9
0.87513692
Total 6 0.11903189
M&M RETURNS FOR THE YEAR 2010
Month Start End Returns Avg.Ret Deviation (Deviation)
Page 51
2
0.09510869 0.00052355
January 276 302.25 6 0.11799 -0.0228813 4
0.05661016 - 0.00376748
February 295 311.7 9 0.11799 0.06137983 4
0.25786885 0.13987885 0.01956609

March 305 383.65 2 0.11799 2 3
0.26789658 0.14990658 0.02247198

April 384.85 487.95 3 0.11799 3 4
0.33512974 0.21713974 0.04714966

May 501 668.9 1 0.11799 1 7
0.02559347 - 0.00853711
June 674 691.25 2 0.11799 0.09239653 8
0.22949763 0.11150763 0.01243395

July 698.7 859.05 8 0.11799 8 3
- - 0.01764093
August 876.65 863.65 0.01482918 0.11799 0.13281918 4
Septembe 0.02098144 -
r 865.05 883.2 6 0.11799 0.09700855 0.00941066
0.03357623 - 0.00712568
October 892 921.95 3 0.11799 0.08441377 4
Novembe 0.10682795 - 0.00012459

r 930 1029.35 7 0.11799 0.01116204 1
0.00171455 -
December 1079 1080.85 1 0.11799 0.11627545 0.01351998
1.41597615 0.16227170
Total 9 3
Page 52
ONGC RETURNS FOR THE YEAR 2010
Month Start End Returns Avg.Ret Deviation (Deviation)2
- 0.62069403
January 667 654.95 0.01806597 0.63876 3 0.385261083
0.06258649 0.70134649
February 650.3 691 9 0.63876 9 0.491886911
0.17491152 0.81367152
March 664.05 780.2 8 0.63876 8 0.662061355
0.10865384 0.74741384
April 780 864.75 6 0.63876 6 0.558627457
0.30104595 0.93980595
May 898.7 1169.25 5 0.63876 5 0.883235234
- 0.55183317
June 1171.1 1069.3 0.08692682 0.63876 9 0.304519858
0.09279947 0.73155947
July 1065.2 1164.05 4 0.63876 4 0.535179264
0.01759656 0.65635656
August 1165 1185.5 7 0.63876 7 0.430803942
Septembe - 0.63574013
r 1175.55 1172 0.00301986 0.63876 7 0.404165522
- 0.60162528
October 1175.45 1131.8 0.03713471 0.63876 6 0.361952984
Novembe 0.04790811 0.68666811

r 1144.9 1199.75 4 0.63876 4 0.471513099
December 1204 1178 - 0.63876 0.61716531 0.380893027
Page 53
0.02159468 6
5.87009973
Total 0.63876 6
REL RETURNS FOR THE YEAR 2010
(Deviation)
2
0.06741935 0.06018935 0.00362275

January 1240 1323.6 5 0.00723 5 8
- - 0.00066542
February 1290 1266.05 0.01856589 0.00723 0.02579589 8
0.24094571 0.23371571 0.05462303

March 1228.7 1524.75 5 0.00723 5 5
0.18598161 0.17875161
April 1523 1806.25 5 0.00723 5 0.03195214
May 1851 2271.9 0.2273906 0.00723 0.2201606 0.04847069
- - 0.01927043
June 2330 2023.4 0.13158798 0.00723 0.13881798 2
- -
July 2029.9 1955.4 0.03670132 0.00723 0.04393132 0.00192996
August 1968.9 2005.1 0.01838590 0.00723 0.01115590 0.00012445
Page 54
1 1 4
Septembe 0.00641792
r 2024.8 2201.65 0.08734196 0.00723 0.08011196 6
- - 0.01674297
October 2199.9 1931.15 0.12216464 0.00723 0.12939464 4
Novembe - -
r 1920.05 1063.5 0.44610817 0.00723 0.45333817 0.2055155
0.01446511 0.00723511 5.23469E-

December 1075 1090.55 6 0.00723 6 05
0.08680225 0.38938764
Total 4 6
SATYAM RETURNS FOR THE YEAR 2010
(Deviation)
2
- - 0.54839314
January 175 53.85 0.69228571 0.04825 0.74053571 4
- - 0.08787182
February 55 41.35 0.24818182 0.04825 0.29643182 3
- - 0.02060491
March 42.5 38.45 0.09529412 0.04825 0.14354412 4
Page 55
0.20154043 0.15329043 0.02349795
April 38.95 46.8 6 0.04825 6 8
0.12910052 0.08085052 0.00653680

May 47.25 53.35 9 0.04825 9 8
0.30514705 0.25689705 0.06599609

June 54.4 71 9 0.04825 9 9
0.17683869
July 71.25 104.65 0.46877193 0.04825 0.42052193 3
0.17596153 0.12771153 0.01631023

August 104 122.3 8 0.04825 8 7
Septembe - - 0.00626780
r 122.9 119.1 0.03091945 0.04825 0.07916945 1
- - 0.03588238
October 119 102.2 0.14117647 0.04825 0.18942647 8
Novembe - - 0.02287204
r 100.5 90.15 0.10298507 0.04825 0.15123507 8
0.07857142 0.03032142 0.00091938

December 91 98.15 9 0.04825 9 9
0.04825027 1.01199130
Total 9 2
Page 56
SBI RETURNS FOR THE YEAR 2010
(Deviation)
2
- - 0.03252081
January 1329 1151 0.13393529 0.0464 0.18033529 7
- - 0.02138157
February 1139 1025.3 0.09982441 0.0464 0.14622441 7
0.05164087 0.00524087 2.74668E-

March 1014.7 1067.1 9 0.0464 9 05
0.18812433 0.14172433 0.02008578

April 1076.15 1278.6 2 0.0464 2 6
0.41018675 0.36378675 0.13234080

May 1325.25 1868.85 7 0.0464 7 5
- - 0.03637982
June 2039.7 1745.3 0.14433495 0.0464 0.19073495 2
0.04659156 0.00019156 3.66974E-

July 1731 1811.65 6 0.0464 6 08
- - 0.00787880
August 1820 1742.9 0.04236264 0.0464 0.08876264 6
Septembe 0.24642248 0.20002248 0.04000899

r 1761 2194.95 7 0.0464 7 5
- - 0.00217418
October 2191.55 2191.05 0.00022815 0.0464 0.04662815 4
Novembe 0.02402834 - 0.00050049

r 2187 2239.55 9 0.0464 0.02237165 1
0.01024042 - 0.00130751
December 2246 2269 7 0.0464 0.03615957 5
0.55654936 0.29460630
Total 3 1
Page 57
TATA MOTORS RETURNS FOR THE YEAR 2010
(Deviation)
2
- 0.1487421 - 0.04793924
January 160.95 149.65 0.07020814 8 0.21895032 2
0.00844309 0.1487421 - 0.01968383

February 148.05 149.3 4 8 0.14029909 4
0.23408624 0.1487421 0.08534406 0.00728360

March 146.1 180.3 2 8 2 9
0.1487421 0.03641160
April 182 243.8 0.33956044 8 0.19081826 8
0.34632294 0.1487421 0.19758076 0.03903815

May 250.2 336.85 2 8 2 7
- 0.1487421 - 0.09903086
June 348.6 290.75 0.16594951 8 0.31469169 1
0.44218268 0.1487421 0.29344050 0.08610733

July 292.3 421.55 9 8 9 2
0.15768321 0.1487421 0.00894103 7.99421E-

August 423 489.7 5 8 5 05
Septembe 0.20299145 0.1487421 0.05424927 0.00294298

r 491.4 591.15 3 8 3 4
Page 58
- 0.1487421 - 0.03804850
October 594.8 567.25 0.04631809 8 0.19506027 9
Novembe 0.17684117 0.1487421 0.02809899 0.00078955

r 563.5 663.15 1 8 1 3
Decembe 0.1487421 0.00011084

r 682.8 791.55 0.15927065 8 0.01052847 9
1.78490615
Total 4 0.37746648
TATATEA RETURNS FOR THE YEAR 2010
Month Start End Returns Avg.Ret Deviation (Deviation)2
0.00140484 - 0.00107486
January 605.05 605.9 3 0.03419 0.03278516 7
- - 0.00598175
February 606 579.85 0.04315182 0.03419 0.07734182 6
0.02373029 0.00010940
March 571 584.55 8 0.03419 -0.0104597 5
0.14321819 0.10902819 0.01188714

April 593.5 678.5 7 0.03419 7 8
May 695 693.15 - 0.03419 - 0.00135806
Page 59
0.00266187 0.03685187
0.02436079
June 704 721.15 5 0.03419 -0.0098292 9.66133E-05
0.16568493 0.13149493 0.01729091

July 730 850.95 2 0.03419 2 7
0.10508771 0.07089771 0.00502648

August 855 944.85 9 0.03419 9 7
Septembe - - 0.00819492
r 950.55 897 0.05633581 0.03419 0.09052581 1
- - 0.00695774
October 901 856.65 0.04922309 0.03419 0.08341309 3
Novembe 0.05948477 0.02529477 0.00063982

r 854 904.8 8 0.03419 8 6
0.03868653 0.00449653
December 906 941.05 4 0.03419 4 2.02188E-05
0.41028551 0.05863796
Total 9 2
0.06990348
Standard Deviation 2
WIPRO RETURNS FOR THE YEAR 2010
Month Start End Returns Avg.Ret Deviation (Deviation)
Page 60
2
- - 0.01180836
January 233.4 231.55 0.00792631 0.10074 0.10866631 6
- -
February 229 207.5 0.09388646 0.10074 0.19462646 0.03787946
0.20244498 0.10170498 0.01034390

March 204.5 245.9 8 0.10074 8 5
0.34491869 0.24417869 0.05962323

April 246 330.85 9 0.10074 9 7
0.15763173 0.05689173
May 330.2 382.25 8 0.10074 8 0.00323667
- - 0.01423406
June 385.1 377.95 0.01856661 0.10074 0.11930661 6
0.29669312 0.19595312 0.03839762

July 378 490.15 2 0.10074 2 6
0.11123459 0.01049459 0.00011013

August 494.9 549.95 3 0.10074 3 6
Septembe 0.09274047 - 6.39925E-

r 551 602.1 2 0.10074 0.00799953 05
0.00314569 0.00952464
October 604 605.9 5 0.10074 -0.0975943 8
Novembe 0.04320066 - 0.00331077

r 603 629.05 3 0.10074 0.05753934 5
0.07722772 - 0.00055282
December 631.25 680 3 0.10074 0.02351228 7
1.20885831
Total 7 0.18908571
Page 61
ZEEL RETURNS FOR THE YEAR 2010
(Deviation
Month Start End Returns Avg.Ret Deviation )2
- -
0.2223396 0.2736616 0.0748907
January 141.9 110.35 8 0.051322 8 13
- -
0.0268670 0.0781890 0.0061135
February 109.8 106.85 3 0.051322 3 25
- -
0.0014084 0.0527304
March 106.5 106.35 5 0.051322 5 0.0027805
0.0635294 0.0122074 0.0001490

April 106.25 113 12 0.051322 12 21
0.4421593 0.3908373 0.1527538

May 116.7 168.3 83 0.051322 83 6
-
0.0128571 0.0384648 0.0014795
June 175 177.25 43 0.051322 6 45
-
0.0440763 0.0072456 5.24993E-
July 178.1 185.95 62 0.051322 4 05
August 187.8 210.6 0.1214057 0.051322 0.0700837 0.0049117
Page 62
51 51 32
Septemb 0.1002304 0.0489084 0.0023920

er 217 238.75 15 0.051322 15 33
- -
0.0275094 0.0788314 0.0062143
October 238.1 231.55 5 0.051322 5 97
Novembe 0.1054347 0.0541127 0.0029281

r 230 254.25 83 0.051322 83 93
-
Decembe 0.0042968 0.0470251 0.0022113
r 256 257.1 75 0.051322 2 62
0.6158655 0.2568773
Total 15 81
0.1463094
Standard Deviation 3
TABLE-1
SELECTED COMPANIES AVG RISK & AVG RETURN FOR THE

YEAR 2006
Name of the Avg.Return Avg.Ris

S.No. company s k
1 ABB 0.046 0.077
2 BHARATI AIRTEL 0.050 0.108
3 BHEL 0.024 0.114
4 CIPLA -0.037 0.264
Page 63
5 HCLTECH 0.003 0.069
6 INFOSYS 0.023 0.063
7 M&M 0.020 0.055
8 ONGC -0.001 0.086
9 REL 0.006 0.157
10 SATYAM 0.013 0.085
11 SBI 0.010 0.107
12 TATA MOTORS 0.012 0.077
13 TATA TEA 0.019 0.077
14 WIPRO -0.034 0.202
15 ZEEL 0.016 0.065
GRAPH-1
INTERPRETRATION:
CIPLA and WIPRO are in loss and risk is more, ABB is showing less risk compare to other
companies in 2006
Page 64
TABLE-2
SELECTED COMPANIES AVG. RISK & AVG. RETURNS
FOR THE YEAR 2007

S.No. company s k
1 ABB 0.055 0.089
3 BHEL 0.049 0.113
4 CIPLA 0.049 0.128
5 HCLTECH 0.037 0.096
6 INFOSYS 0.029 0.077
7 M&M 0.044 0.110
8 ONGC 0.030 0.080
9 REL 0.004 0.087
10 SATYAM 0.048 0.048
11 SBI 0.030 0.096
12 TATA MOTORS 0.008 0.100
13 TATA TEA 0.051 0.088
14 WIPRO -0.045 0.199
15 ZEEL -0.011 0.108
Page 65
GRAPH-2
INTERPRETATION:
WIPRO and ZEEL are in loss and risk is more, ABB earned more returns than other
companies and risk is less compare to other companies in the year 2007.
Page 66
TABLE-3
SELECTED COMPANIES AVG. RISK & AVG. RETURN
FOR THE YEAR 2008

S.No. company s k
1 ABB 0.057 0.150
3 BHEL 0.035 0.108
4 CIPLA -0.010 0.208
5 HCLTECH 0.018 0.089
6 INFOSYS 0.022 0.177
7 M&M 0.047 0.059
8 ONGC -0.009 0.113
9 REL -0.006 0.073
10 SATYAM -0.022 0.150
11 SBI -0.024 0.189
12 TATA MOTORS 0.091 0.264
13 TATA TEA -0.017 0.073
14 WIPRO 0.029 0.084
15 ZEEL 0.053 0.139
Page 67
GRAPH-3
INTERPRETATION:
SATYAM, SBI earned more, loss risk is more. CIPLA, ONGC and TATA TEA also earned
loss and risk is high. TATA MOTORS returns are high compare to other companies in the
year 2007.
Page 68
TABLE-4
FOR THE YEAR 2009

S.No. company s k
1 ABB -0.028 0.239
3 BHEL 0.043 0.191
4 CIPLA -0.014 0.072
5 HCLTECH -0.032 0.171
6 INFOSYS -0.021 0.065
7 M&M -0.003 0.066
8 ONGC 0.035 0.102
9 REL 0.128 0.177
10 SATYAM -0.010 0.089
11 SBI 0.062 0.108
12 TATA MOTORS -0.005 0.075
13 TATA TEA 0.025 0.126
14 WIPRO -0.015 0.057
15 ZEEL 0.027 0.123
Page 69
GRAPH-4
INTERPRETATION:
ABB, HCL earned more loss CIPLA, INFOSYS, SATYAM, WIPRO, M&M also earned
loss risk is high. AIRTEL earned high returns and risk is less compare to other companies in
the year 2009
TABLE-5
FOR THE YEAR 2010
Name of the Avg.Return

S.No. company s Avg.Risk
1 ABB 0.055 0.13485
2 BHARATI AIRTEL -0.050 0.17806
3 BHEL 0.050 0.08047
4 CIPLA 0.053 0.06948
5 HCLTECH 0.114 0.13585
6 INFOSYS 0.146 0.09959
Page 70
7 M&M 0.118 0.11629
8 ONGC 0.639 0.69941
9 REL 0.007 0.18014
10 SATYAM 0.048 0.29041
11 SBI 0.046 0.15669
12 TATA MOTORS 0.149 0.17736
13 TATA TEA 0.034 0.06990
14 WIPRO 0.101 0.12553
15 ZEEL 0.051 0.14631
GRAPH-5
INTERPRETATION:
ABB, Dr.REDDY’S and INFOSYS are in huge losses. NALCO earned high returns and risk
is less compare to other companies in the year 2010.
Page 71
CHAPTER-5
FINDINGS
&
SUGGESTIONS
Page 72
FINDINGS-:
After the data is analyzed the following facts have been observed.
2006: From risk-return analysis of 2005, it is found that risk of all companies are higher
than their returns, but in comparison returns of ABB and BHARTHI AIRTEL has higher,
where as CIPLA and WIPRO has negative returns.
2007: From the analysis, the risk of all companies is higher than their returns excluding
satyam (Mahindra satyam). In comparison returns of ABB and TATA TEA is higher,
WIPRO continued its negative returns along with ZEEL.
2008: From the analysis, the M&M is performing better than other companies. In this year
most of the companies has negative returns. Satyam in particular has negative returns and
higher risk, this is due to BANKRUPTCY.
2009: From the analysis, BHARATI AIRTEL is performing better followed by RELIANCE
industries. In this year total software industry is not doing well because of financial crisis
in USA, followed by high inflation rate. In this year TELECOM industry is performing
better when compared to other industries.
2010: From the analysis, total software industry having started recovering, so their stocks
were going along with their risk. This year was good as all the companies are doing well.
TATA Motors is also another stock which is performing well, this is due to launch of TATA
NANO (world’s cheapest car)
Page 73
SUGGESTIONS-:
After observing the facts found out after the analysis and interpretations the following
suggestions are made to the investors.
 When there is more risk, the return will also be highs but this does not hold in all
situations especially in the case of economic crisis.
 As the world economy is influenced by US economy, the worst scenario of US
economy is influencing the others countries stock markets.
 The sentiments and emotions sometimes play a vital role in causing fluctuations in
the stock markets. Therefore it is not advisable to invest at the time of crisis.
 When markets are sliding down steeply, the investors will not be protected against
the risk of investment. Therefore it is not advisable to invest when the markets are
very volatile.
 Always it is felt that market position never stays for a long time. In this opinion
Bullish and Bearish markets end after some time. Therefore one can invest the time
of Bearish and soon after they reach bullish trend they can sell them off.
Page 74
CONCLUSION
The success or failure of an organization primarily depends on its ability to sustain its
comparative advantage irrespective of the kind of strategy it adopts – cost leadership,
differentiation or focus.
Analysis and interpretation of financial statement is an important tool in assessing
company’s performance. It reveals the strength and weakness of firm. It helps the clients to
decide in which firm the risk is less or in which one they should invest so that maximum
benefit can be earned. It is known that investing in any company involve a lot of risk So
before putting up money in any company one must have thorough knowledge about its past
record and performances.
The present project work has been undertaken to study the risk-return relationship of
individual securities as well as nifty index to observe whether the stock prices have any
relationship with risk and return. As this project work is done by studying 15 individual
stocks of nifty and nifty index, there is much scope for the analysis, interpretation and
conclusion.
As the economy is fluctuations very badly, the stock prices are affected by these fluctuations
and the market has become so volatile. In this situation investors should be very careful.
The firm which is dealing the trading of share market should be caution enough so that
investors may not suffer losses.
Page 75
BIBLIOGRAPHY
Page 76
BIBLIOGRAPHY
 Puthi Sing.,“Investing Management”, 3rd edition, New Delhi, Vikas Publication

House Pvt. Ltd.
 Maheshwari, “S.N, Advanced Accounting”, 4th edition Sultan Chand & Sons
Publication, New Delhi, 2004,(tools of financial analysis)
 Punithyathy Pandiyam,,”Security Analysis And PortfolioManagemenet”5th

edition,Kalyani Publishers,NewDelhi.
 Kothari C.R., “Research Methodology Methods and Techniques” (Second

Edition) New Age International Publishers, Ansari Road, Daryaganj, New Delhi-
110002
 http://www.NSEindia.com
 http://www.Investopedia.com
 http://www. Glossary reuters.com
 http://www. Capitalmarket.com
 http://www. Answers.com
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RESEARCH REPORT

RISK AND RETURN ANALYSIS OF SECURITY

In partial fulfillment for the degree of

UNDER THE GUIDANCE OF: SUBMITTED BY:

Swami Devi Dyal Institute Of Engg. & Technology

Barwala Distt.Panchkula (Haryana)

Signature of faculty guide:

Sr. No. Title Page Number

1. Table of Avg.Risk & Avg.Return of year 2006 64

2. Table of Avg.Risk & Avg.Return of year 2007 66

3. Table of Avg.Risk & Avg.Return of year 2008 68

4. Table of Avg.Risk & Avg.Return of year 2009 69

5. Table of Avg.Risk & Avg.Return of year 2010 71

6. Graph of Avg.Risk & Avg.Return of year 2006 65

7. Graph of Avg.Risk & Avg.Return of year 2007 67

8. Graph of Avg.Risk & Avg.Return of year 2008 69

9. Graph of Avg.Risk & Avg.Return of year 2009 70

10. Graph of Avg.Risk & Avg.Return of year 2010 72

INTRODUCTION OF RISK & RETURN 10-20

2. Review of literature 42-44

3. Research Methodology 45-49

4. Analysis & Interpretation 50-72

5. Finding & Suggestions 73-75

Risk consists of 2 components:

1. Systematic risk (uncontrollable risk) non-diversifiable risk

It is unique to the firm or industry. It stems from managerial inefficiency,

It can be classified into 2 types

Traditional Method of Measurement

Expected Cash Income

a) Estimated Yield = ----------------------------

b) Actual Yield = ---------------------

Measuring Returns – Improved Technique

Price in rupees of original investment at the beginning of period

 Exchanges based on open electronic limit order book

Recent Developments and Policy Issues.

Firstly, market infrastructure has to be improved as it hinders the efficient flow of

Secondly, the trading system has to be made more transparent. Market

Reforms in the secondary market have focused on three main areas

 structure and functioning of stock exchanges,

MARK-TO-MARKET MARGIN AND INTRADAY LIMIT

Accordingly, SEBI has introduced a daily mark-to-market margin and intraday

This margin is payable by a stockbroker to the stock exchange in cash or as a bank

Thus, speculative trading without the delivery of shares is no longer cost-

HISTORY OF STOCK EXCHANGES IN INDIA

Maintain Active Trading:

The Securities and Exchange Board of India

The Governing Board of Stock Exchanges:

NATIONAL STOCK EXCHANGE

Laws governing capital market

of India. It consists of 50 companies representing approximately 10% of the traded value of

Stock or any other security representing an ownership interest.

A type of security that signifies ownership in a corporation and represents a claim on part of

A unit of ownership interest in a corporation or financial asset. While owning shares in

Risk- Risk is defined as uncertainty in outcomes

2.) By Madhusudan Mohanty and Philip Turner

B. Data Collection Techniques-:

NEED OF THE STUDY

TOOLS OF DATA COLLECTION

The present data is based upon secondary data sources:

 Data collected from journals, magazines and newspapers.

 Data collected from the reference books.

OBJECTIVE OF THE STUDY