Mba Project Ratio Analysis
CHAPTER-I
1. INTRODUCTION
1.1 General Introduction Global capital market, including capital market in India is passing through a volatile stage. Investors find it very difficult to make investment decisions. In a bearish market, naive investment strategies may lead to significant losses to the investors. A scientific evaluation of risk and return is very much required for any investor in a process to get maximum return at minimum risk.
This study deals with the analysis of risk and return of 3 major stocks in banking sector, automobile sector and it sector listed in NSE, constructing a portfolio using these stocks and evaluating the benefit of diversification of risk using latent tools and techniques in an effort to maximize return with minimum possible risk. Generally, the security prices reflect the performance of a company. Both economic and non-economic factors invariably affect the stock return behavior.
1.2 Industry profile
Indian Capital Market
The roots of a stock market in India began in the 1860s during the American Civil War that led to a sudden surge in the demand for cotton from India resulting in setting up of a number of joint stock companies that issued securities to raise finance. This trend was akin to the rapid growth of securities markets in Europe and the North America in the background of expansion of railroads and exploration of natural resources and land development.
A new phase in the Indian stock markets began in the 1970s, with the introduction of Foreign Exchange Regulation Act (FERA) that led to divestment of foreign equity by the multinational companies, which created a surge in retail investing. The early 1980s witnessed another surge in stock markets when major companies such as Reliance accessed equity markets for resource mobilization that evinced huge interest from retail investors. A new set of economic and financial sector reforms that began in the early 1990s gave further impetus to the growth of the stock markets
1. INTRODUCTION
1.1 General Introduction Global capital market, including capital market in India is passing through a volatile stage. Investors find it very difficult to make investment decisions. In a bearish market, naive investment strategies may lead to significant losses to the investors. A scientific evaluation of risk and return is very much required for any investor in a process to get maximum return at minimum risk.
This study deals with the analysis of risk and return of 3 major stocks in banking sector, automobile sector and it sector listed in NSE, constructing a portfolio using these stocks and evaluating the benefit of diversification of risk using latent tools and techniques in an effort to maximize return with minimum possible risk. Generally, the security prices reflect the performance of a company. Both economic and non-economic factors invariably affect the stock return behavior.
1.2 Industry profile
Indian Capital Market
The roots of a stock market in India began in the 1860s during the American Civil War that led to a sudden surge in the demand for cotton from India resulting in setting up of a number of joint stock companies that issued securities to raise finance. This trend was akin to the rapid growth of securities markets in Europe and the North America in the background of expansion of railroads and exploration of natural resources and land development.
A new phase in the Indian stock markets began in the 1970s, with the introduction of Foreign Exchange Regulation Act (FERA) that led to divestment of foreign equity by the multinational companies, which created a surge in retail investing. The early 1980s witnessed another surge in stock markets when major companies such as Reliance accessed equity markets for resource mobilization that evinced huge interest from retail investors. A new set of economic and financial sector reforms that began in the early 1990s gave further impetus to the growth of the stock markets
Bibliography: * Pandey I M, “Financial Management” Vikas Publishing House Pvt Ltd, Ninth Edition, 2005.