Professional Documents
Culture Documents
Aasha Project
Aasha Project
Aasha Project
By
“Aasha"
MANDSAUR UNIVERSITY
Rewas-Dewda Road, Mandsaur (M. P.) - 458001
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A SUMMER TRAINING PROJECT REPORT
ON
“INVESTMENT PATTERN ON THE BASIS OF RISK PROFILE OF
INVESTORS”
SUBMITTED TO
MANDSAUR UNIVERSITY
In Partial Fulfillment of Requirement for the Award of
“2018-20”
Submitted To: - Submitted By:-
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DECLARATION
Place: Mandsaur
Signature:
Date:
Name of student : Aasha
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PROJECT GUIDE CERTIFICATE
Place: Mandsaur
Signature:
Date:
Faculty Guide: PROF. Dr. Gopal krishna rathore
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ACKNOWLEDGEMENT
I owe a great many thanks to a great many people who helped and supported me
during the writing of this summer training project.
My deepest thanks to PROF.Dr.Gopal Krishna rathore the guide of the project for
guiding and correcting various documents of mine with attention and care. He has taken
pain to go through the project and make necessary correction as and when needed.
My deep sense of gratitude to NARAYAN GOSWAMI SIR. for support and guidance.
Thanks and appreciation to the helpful people at [SHAREKHAN LTD.], for their support.
I would also thank my Institution and my faculty members without whom this project
would have been a distant reality. I also extend my heartfelt thanks to my family and
well wishers.
Aasha
MBA III Sem
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CONTENTS
Chapter I:
Introduction, history of company
Chapter II:
Swot analysis, Literature review, objective of study
Chapter III:
Research Design & Methodology,
Chapter IV:
Data Presentation, Analysis and Interpretation
Chapter V:
Findings & Conclusion
Bibliography
Questionnaire
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EXECUTIVE SUMMARY
People invest their money for generating good returns. But in this investment some kind of risk
is involved. All investors have different attitudes towards risk. When it comes to investing, it is
important to consider your risk profile or tolerance carefully, including how comfortable you are
with the possibility of losing money, or that returns on your investments. The risk profile of
investors depends upon their demographic structures or characteristics.
The project deals with the analyzing the investment pattern on the basis of risk profile of
investors at Sharekhan Limited and what are the risk factors that influence the type of investment
made by individuals . As we all know that every person who wants to gain better returns in
future they must have to invest their money in stock market or anywhere else. This study
describes the investment pattern use by different persons while doing investment in stock market
keeping different risk in mind.
The main reason to choose this research is to find out the investment pattern behavior in respect
of their risk bearing capacity and this research helps the company to target the investors
according to their risk ability. The research process chosen by me is qualitative and quantitative
research. Questionnaires in part help me a lot in finding the actual position of the market under
the survey method.
.A sample size of about 96 respondents which includes individual investors as well as corporate
investors was taken for purpose from various parts of Delhi and N.C.R . After the survey was
completed, the data was first stored and then analyzed on the chosen parameters. This analyzed
data was later on converted into graphs. Such as pie chart, bar graphs, etc this was to make result
easily comprehensible by any one going through the report. Later on, all this information was
compiled in the form of a presentable and highly comprehensible report.After analyzing the data,
the problem which has been identified that most of the investors are ready to bear risk in
expectation of higher returns. There is a strong relationship in investment pattern and risk
bearing capacity of investors while doing investment.
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INVESTMENT PATTERN ON THE BASIS OF RISK PROFILE OF INVESTORS
WHAT IS RISK?
The word „risk‟ has a definite financial meaning. It refers to possibility of incurring a loss in a
financial transaction. In a broad sense, investment is considered to involve limited risk and is
confined to those avenues where the principal is safe. „Speculation‟ is considered as an
involvement of funds of high risk.
TYPES OF RISK
1. SYSTEMATIC RISK
2. UNSYSTEMATIC RISK
SYSTEMATIC RISK
Systematic risk refers to that portion of the total variability of the return caused by common
factor affecting the prices of all securities alike through economic, political and social factors.
UNSYSTEMATIC RISK
Unsystematic risk refers to that portion of the total variability of the return caused due to unique
factors, relating that firm or industry, through such factors as management failure, labour strikes,
raw material scarcity etc.
WHAT IS INVESTMENT?
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Investment is the purchase of an asset or item with the hope that it will generate income or
appreciate in the future and be sold at the higher price
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INVESTMENT RISK PROFILE
All investors have differing attitudes towards risk. When it comes to investing, it is important to
consider your risk profile or tolerance carefully, including how comfortable you are with the
possibility of losing money, or that returns on your investments could vary widely from year to
year.
Understanding your personal risk tolerance will help you choose an appropriate asset allocation -
the following points can help you to determine an investment mix that's appropriate for your
needs.
INVESTMENT EXPERIENCE
How would you describe your investment experience and understanding of financial markets?
⮚ You have been investing on your own for several years and are reasonably
confident of your knowledge of financial markets.
⮚ Your knowledge of financial markets is well above average and you make
investment decisions confidently.
RISK TOLERANCE
To establish investment strategies that suit your profile of risk and will be comfortable with,
you need to consider the possibility that the value of your investment may decline even though
this may be temporary. Are you prepared to accept the possibility of a negative return at any
time in exchange for potentially higher long term returns? What percentage of your money
would you be prepared to invest in higher-risk investments?
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⮚ Avoiding any short-term losses
⮚ Receiving regular income from investments.
⮚ Long-term growth in the value of investments.
⮚ Protection against inflation
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In October 1987 the stock market fell more than 20% in one day. If you owned an investment
that fell by 20% in a short time what would you do or what did you do in 1987:Sell all of the
remaining investment (Conservative)
Why are you investing? Is it for something in the near future (new car, or down payment on a
home) or something farther off (a young child's education or your own retirement)? If your
investing goals are short term you want your money to be there - with interest - when you need
it. Therefore you will need to focus on relatively short term investments like term deposits or a
cash management trust. If on the other hand, you are investing for the long term, you may be
able to afford to take some risk in pursuit of a higher return. Shares, property, and growth
orientated managed which historically have provided higher returns than fixed interest or cash
over time, may be more appropriate.
INVESTMENT TIMEFRAME
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⮚ 2 to 5 years (short to mid-term)
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LIQUIDITY / CASH REQUIREMENTS
How much money do you need to keep available for emergencies such as house repairs, a
dental emergency or serious car repairs? These emergencies can be a serious setback if you
are not prepared. The amount of your emergency fund will depend on your current lifestyle
and expenses. As a general rule you should have about 3 months of income set aside to meet
emergencies without needing to rely on credit cards. A cash management trustthat pays high
interest can be a good place to keep emergency funds.
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INTRODUCTION
Founded in 2000 and a subsidiary of BNP Paribas since November 2016, Sharekhan was one of
the first brokers to offer online trading in India. With 16 lakh customers, 153 branches and more
than 2400 business partners spread across over 575 locations, Sharekhan is one of the largest
brokers in India. Sharekhan offers a wide range of savings & investment solutions including
equities, futures and options. currency trading, portfolio management, research and mutual funds
and investor education. On an average, Sharekhan executes more than 400,000 trades daily.
● Registered with NSE and BSE for capital market, futures and options and currency segments and
CDSL and NSDL for depository services.
● A full-service stock broking firm providing online services right from online account opening to
trading and investments.
● Created India’s best online trading platforms: Website (www.sharekhan.com), TradeTiger (the
ultimate desktop trading software), Sharekhan App (available for Android and iOS devices) and
Sharekhan Mini (a low bandwidth website especially for mobile browsers)
● A strong brick-and-mortar network with over 2600 outlets in 575+ cities
● Research-based financial advice on all asset classes to suit all investing and trading styles
● Dedicated Education and training courses for investors and traders in association with Online
Trading Academy
BNP Paribas is a leading bank in Europe with an international reach. It has a presence in 75
countries, with more than 189,000 employees. It has had a presence in India for over 150 years
having established its first branch in Kolkata, in 1860. With this unparalleled experience of the
Indian market, it is among the leading corporate banks in the country. Through its branches in
eight key cities — Mumbai, Delhi, Kolkata, Chennai, Hyderabad, Bangalore, Ahmedabad and
Pune — BNP Paribas offers sophisticated solutions in its three core businesses — corporate and
institutional banking, investment solutions and retail banking — many of them in association
with strong local partners.
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Sharekhan business
1. Brokering business.
2. White feathering house production.
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Vision
To be the best retail broking brand in the retail business of the stock market.
Mission
To educate and empower the individual investor to make better investment decisions through
quality advices and superior services.
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SHAREKHAN PROFILE
● Among the top three (3) branded retail services providers (Rs 856 crs average daily
volume.
● NO. 2 player in online business
● Large network of branded broking outlets in the country servicing around 5, 45,
000 Client
● .
MANAGEMENT TEAM
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BENEFITS
Personalized Price and Account Alerts delivered instantly to your Cell Phone & E-mail
address
Anytime Ordering
NSDL Account
Instant Cash Tranferation
A-206, Phoenix House, 2nd Floor, Senapati Bapat Marg, Lower Parel, Mumbai- 400 013.
Telephone No: 67482000
Email: myaccount@sharekhan.com
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PRODUCTS OF SHAREKHAN
CLASSIC ACCOUNT
This account allows the client to trade through the website www.sharekhan.com and is suitable
for the retail investor who is risk-averse and hence prefers to invest in stocks or who do not trade
too frequently.
It allows investor to buy and sell stocks online along with the following features like multiple
watch lists, Integrated Banking, De-mat and Digital contracts, Real-time portfolio tracking with
price alerts and Instant money transfer.
FEATURES
Online trading account for investing in Equity and Derivatives via www.sharekhan.com
Live Terminal and Single terminal for NSE Cash, NSE F&O, BSE & Mutual Funds (online
and offline).
Provision to enter price trigger and view the same online in market watch
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TRADE TIGER
FEATURES
DIAL-N-TRADE
Along with enabling access for your trade online, the CLASSIC and TRADE TIGER
ACCOUNT also gives you our Dial-n-trade services. With this service, all you have to do is dial
our dedicated phone lines which are 1800-22-7500, 3970-7500.
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PORTFOLIO MANAGEMENT SERVICES
Ideal for investors looking at steady and superior returns with low to medium risk appetite. This
portfolio consists of a blend of quality blue-chip and growth stocks ensuring a balanced portfolio
with relatively medium risk profile. The portfolio will mostly have large capitalization stocks
based on sectors & themes that have medium to long term growth potential.
Protech uses the knowledge of technical analysis and the power of derivatives market to identify
trading opportunities in the market. The Protech lines of products are designed around various
risk/reward/ volatility profiles for different kinds of investment needs.
THRIFTY NIFTY: Nifty futures are bought and sold on the basis of an automated
trading system that generates calls to go long/short. The exposure never exceeds value of
portfolio i.e. there is no leveraging; but being short in Nifty allows you to earn even in
falling markets and there by generates linear
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3. PROARBITRAGE - Exploit price analysis
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PROCESS OF ACCOUNT OPPENING
CONTACT
APPOINTMENT
DEMONSTRATION
DOCUMANTATION
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SENDING THE ACCOUNT OPENING KIT TO THE CUSTOMER FOR TRADING
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SWOT ANALYSIS OF SHAREKHAN
My observation
STRENGTHS
1. Big client base
5. Share shops
6. Transparent
WEAKNESS
1. Lack of awareness among customer
3. Less Exposure
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OPPORTUNITIES
1. Diversification
2. Product modification
5. Concentrate on PMS
THREATS
1. Aggressive promotional strategies by close competitor like Religare, Angel Broking and India
bulls.
2. More and more players are venturing into this domain, which can further reduce the earning of
Share Khan.
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LITERATURE REVIEW
A number of academic studies have provided evidence of demographic and non demographic
characteristics related to the financial risk tolerance of individuals. The most common variables
researched by academics to determine their relationship with financial risk tolerance are gender,
age, marital status, number of dependents, income, wealth, education and financial knowledge.
We report the main findings as well as a number of less-researched variables. Gender differences
have been widely examined, with a large number of studies reporting higher financial risk
tolerance for males (Grable, 2000; Grable and Joo, 2000; Bemasek and Shwiff, 2001; Chaulk,
Johnson, and Bulcroft, 2003; Yook and Everett, 2003; Grable, Lytton, and O'Neill, 2004;
Hallahan, Faff, and McKenzie, 2004; Yao, Hanna, and Lindamood, 2004; Fan and Xiao, 2006;
Van de Venter and Michayluk, 2007; Gilliam, Chatterjee, and Zhu,2010).
Studies have also argued that financial risk tolerance decreases with age (Xiao,
Alhabeeb, Hong, and Haynes, 2000; Chaulk, Johnson, and Bulcroft, 2003; Hallahan, Faff, and
McKenzie, 2004; Yao, Hanna, and Lindamood, 2004; Fan and Xiao, 2006; Van de Venter and
Michayluk, 2007; Faff, Hallahan, and McKenzie, 2009). Furthermore, a nonlinear aspect to age
has been observed (Hallahan, Faff, and McKenzie, 2004; Grable, Lytton, O'Neill, Joo, and
Klock, 2006; Faff, Hallahan, and Mckenzie, 2009). The primary explanation for the observation
of a significantly negative coefficient for age and the nonlinear relationship has been attributed to
the time horizon to recover losses that is lower with age and the higher reliance on investment
funds as individuals‟ age.
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Marital status has been widely studied, especially because of its interaction with
age and gender. Financial risk tolerance is higher for single individuals (Grable and Joo, 2004;
Hallahan, Faff, and McKenzie, 2004; Yao, Hanna, and Lindamood, 2004; Fan and Xiao,2006).
The main justification for this result is that single individuals do not hold the same
responsibilities as those that are married and thus the single individuals are willing to accept
more financial risk. For example, Chaulk, Johnson, and Bulcroft (2003) propose that married
individuals tend to have a lower financial risk tolerance because of a greater need for wealth
protection. When gender and marital status are incorporated together, Jianakoplos and Bemasek
(1998) and Bemasek and Shwiff (2001) find that single men tend to be more risk tolerant than
single women. A negative relationship between financial risk tolerance and the number of
dependents is identified by Chaulk, Johnson, and Bulcroft (2003) and Hallahan, Faff, and
McKenzie (2004), with Faff, Hallahan, and McKenzie (2009) proposing a statistically significant
nonlinear linkage. This negative relationship has been identified with marital status and may
exist because of the added responsibilities and more conservative outlook to risk when
dependents are considered.
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Higher financial risk tolerance is reported for individuals in high income and wealth
categories (Grable, 2000; Chaulk, Johnson, and Bulcroft, 2003; Yook and Everett, 2003; Chang,
DeVaney, and Chiremba, 2004; Grable and Joo, 2004; Grable, Lytton, and O'Neill, 2004;
Hallahan, Faff, and McKenzie, 2004; Yao, Hanna, and Lindamood, 2004; Fan and Xiao, 2006).
In addition, Grable and Joo (1999) indicate a significantly positive relationship between financial
risk tolerance and an individual's level of financial solvency
A positive relationship has been identified between financial risk tolerance and education
(Grable, 2000; Chang, DeVaney, and Chiremba, 2004; Grable and Joo, 2004; Hallahan, Faff, and
McKenzie, 2004; Yao, Hanna, and Lindamood, 2004; Fan and Xiao, 2006). Hallahan, Faff, and
Mckenzie (2004) also observe high positive correlations between income, wealth, and education,
suggesting that financial risk tolerance could be a function of income and wealth rather than
education.
Financial or investment knowledge has a positive relationship with financial risk tolerance
(Grable, 2000; Grable and Joo, 2000, Grable and Joo, 2004; Van de Venter and Michayluk,
2007). However, Davey (2004) challenges the view that educating individual investors about
financial markets and instruments will necessarily increase their financial risk tolerance.
Although the financial education of an advisor's clients is considered best practice, it will
most likely not have any direct influence on the risk preference of an individual as even the most
knowledgeable and educated could potentially have a low financial risk tolerance
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OBJECTIVES OF THE STUDY
1. To understand the risk profile of investors.
2. To study risk bearing capacity on the bais of gender, education,occupation,age,family
income and number of dependents.
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RESEARCH METHODOLOGY
Research methodology is way to systematically solve the research problem. Research, in
common terms refers to a search for knowledge. Research methodology consists of different
steps that are generally adopted by a researcher to study the research problem along with the
logic behind them.
RESEARCH DESIGN:
⮚
Research design is the plan, structure and strategy of investigation conceived so as to
obtain answers to research question.
⮚
There are two types of research design. One is exploratory research and other is
descriptive research
EXPLORATORY RESEARCH:
We studied the company report, talked to the customers and employee of the company. We identified that
inspite of providing various opportunities customers may not be aware of derivative and commodity
products.
DESCRIPTIVE RESEARCH
DATA SOURCES:
The study is mainly based on the data collection from primary as well as secondary
sources.
Primary data: Data collected for specific purposes in the form of questionnaire
Secondary data: Data existing in the form of Books, Internet, Catalogues etc.
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1. To understand the risk profile of investors
What do you expect when you invest ?
CHART 1 –
Series 1
Axis Title
Interpretation:- This chart-1 shows, out of 96 respondents 40 people are ready to bear nominal
risk and 36 people don‟t want to take any risk. This shows that around 79% respondents are
conservative in terms of taking risk and only 21% respondents are ready to bear risk and out of
these 21 % only 3% are ready for high risk situation
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Q.2 How long do you normally hold investment?
CHART -2
Series 1
Axis Title
Interpretation:- As per Chart-2,most of the respondents invest for a longer time period i.e.
around 32% and rest of the respondents have very less variability regarding holding of
investment as all other respondents are equally interested in daily, weekly or monthly holding of
investment i.e. around 20% go for each kind of investment holding.
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Q3. . If your investments were to fall in value by 15 per cent over a one-year period,
you will
Chart -3-
Series 1
Axis Title
Interpretation:- Chart-3 is giving the overview regarding respondents reaction related to their
investment, if market falls in value. We can see here the respondents /investors are neither very
conservative nor aggressive in market condition i.e. only 15% investors are willing to withdraw
all money or invest more money in such situation. Most of the respondents are aware & ready for
such condition. They want to be in the market in expectation of money of market.
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Q.4. You are ready for limited losses in expectation of higher long-term returns?
Chart-4-
Series 1
Axis Title
Interpretation:- Chart-4 is about that whether investors are ready to bear limited loss in
expectation of high returns we find that only around 30% investors are not agree for this but
around 70% are considering the idea i.e. most of the respondents are aware about the ups &
downs of stock market & ready for risks involved in it in expectation of getting higher returns.
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Q.5. I am willing to experience the ups and downs of the market for the potential of
greater returns.
Chart-5
Series 1
Axis Title
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Q.6. My main concern is security; keeping money safe is more important than earning
high returns.
Chart-6
Series 1
Axis Title
Interpretation:- This chart -6 shows the investors are aware about the highs and lows of
security market and want to experience that also they are quite positive towards market as they
expect after a low market will recover & give them higher return still the safety is major concern
of investors. Out of total 96 respondents only less than 10% disagree with the fact.
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Q.7. I am fairly experienced in investment.
Chart-7-
Series 1
Axis Title
INTERPRETATION:- As we can see in the chart-7, most of the respondents i.e. around 50%
are not sure about their investment capabilities. They are not very sure that their expectation
of decision is fair enough. Here I want to mention that the market is so volatile in India that
very less investors find themselves fairly enough experienced & don‟t bear losses.
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Q.8. I am very secure related to my future income (such as from salary, pension or other
investments)?
Chart-8-
Series 1
Axis Title
Interpretation:- Chart-8 shows that most of people involve in security market are quite secured
related to their future income. We can also understand the statement that the people who have
fair enough income resources, comes in security investment as they consider all the pros. & cons.
Of the market they know that the market is good place to get better returns but it also contain risk
so losses bearable only in the case of secured future returns.
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FINDINGS AND CONCLUSIONS:-
Most of the respondents are ready to take either no risk or nominal risk while doing the
investment.
There is a situation of investment fall by 15% then most of the respondents are neither
conservative nor aggressive.
Most of the respondents are agree to take limited losses in expectation of higher returns.
Most of the respondents are give their opinion in the favor of experiencing the ups and downs
of the market.
Most of the respondents are agreeing with this there main concern is safety.
Most of the respondents are said that they are not sure about fairly experienced in investment.
Most of the respondents are in favors of they are very much concern with security related to
future income.
This study shows most of the respondents either go for conservative risk profile or balanced
risk profile.
This study describes the strong relationship between demographic data in respect of different
parameters.
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⮚ www.google.com
⮚ www.wikipedia.com
⮚ www.ebscohost.com
⮚ www.sharekhan.com.
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OUETIONAIRE
Investment Pattern On The Basis of Risk Profile Of Investors.
PERSONAL INFORMATION
1.Gender
2.occupation.
3.Age
4.Education
5.Income
(a) <3lakh (b)3-5 lakh (c) 5-10 lakh (d)10-20lakh (e)>20 lakh .
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6.n o.of dependents in family
7.family income
(a) no risk.
(b)nominal risk.
(c)moderate risk.
(a)for a day.
(b)for a week.
(d)for a year.
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3.If your investment were to fall in value by 15 percent over a one – yeat period, you will.
(c) wait until market recovers the loss and then consider other investments.
4.you are ready for limited losses in expectation of higher long –term returns?
(b)disagree .
(d) agree.
5.I am willing to experience the ups and downs of the market for the potential of greater
returns.
(b) disagree.
(d) agree.
6.my main concern is security;keeping money safe is more important than earning high returns.
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7.I am fairly experienced in investment.
(b) Disagree
(d) Agree
8.I am very secure releated to my future income (such asfrom salary, pension or other investments)?
(b)disagree
(d)agree
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