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EMBED Word.Picture.8NEW DELHI

Prepared by

SOHAIL AHMAD07MBA-57

Under the Guidance of

MR. SARFARAZ AHMED KHAN(Asst. Manager, Consumer Transaction Banking,

Retail Liabilities)

Submitted in partial fulfillment of the degree of

Master of Business Administration

Department of Business

Administration

Faculty of Management Studies

and Research

Aligarh Muslim University, Aligarh.

(2007-2009)
http://www.standardchartered.com/http://www.standardchartered.com/


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DECLARATION

I hereby declare that the project work entitled INVESTMENT ANALYSIS AND

PORTFOLIO MANAGEMENT submitted by me for the partial fulfillment of degree

of Master of Business Administration, Faculty of Management studies And Research,

Aligarh Muslim University, This is my own original work and has not been submitted

earlier either to this institute or any other institute for the fulfillment of the

requirement for any course of study. I also declare that no part of this manuscript is

incorporated from earlier/ other work done by me or others.

Place : AligarhName of student : Signature of student

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ACKNOWLEDGEMENT

I bow in reverence of Almighty Allah, the most Merciful who showed his gracious

blessing upon me, showed me the path of righteousness and enabled me to achieve

this target.

I feel immense gratitude and indebtness to respected Prof. Pervaiz Talib, Summer

Training Incharge, Department of Business Administration, Aligarh Muslim

University, Aligarh who made all the arrangements of our summer training

placement.

I owe a deep sense of gratitude to my supervisor Mr. Sarfaraz Ahmed Khan (Asst.

Manager, Consumer Transaction Banking, Retail Liabilities) who devoted his

valuable time in guiding me about the crux of my project and encouraging me for the

way of tackling the work.

My special thank to Mr. Abhishek Bansal, (Area Sales Manager-HNI, Consumer

Transaction Banking), Standard Chartered Bank, who has been a source of inspiration

for me.

I also express my gratitude to my parents, teachers and friends who boosted my

morale and confidence that helped me in various ways to complete this work.

SOHAIL AHMAD

Table of contents

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Particulars page no.

Declaration2

Acknowledgement3

Executive Summary..6

Industry profile 7

Company Profile ..9

Business of the Company....13

Customers of the Company......14

Achievement of the Company & used technology..... .14

An Overview of the Investment.. 15

Need for the study....16

Objectives of the study.. .17

Research methodology........18

Research problems....18

Research design....18

Sample size...18

Source of data....18

Data collection...19

Data processing.... 19

Statistical tools used..19

Findings of Questionnaire...21

Data Analysis.26

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Hypothesis... .26

Pie charts and bar graphs....36

Limitations46

Conclusions...47

Recommendations... .48

Exhibit...49

Bibliography..51

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EXECUTIVE SUMMARY

Globalization today is based on four important pillars viz ,trade in goods and services,

flow of capital and movement of human beings across boundaries,

harmonization of regulatory framework in different countries; and

development in technology, particularly those in information technology.

And naturally, globalization of economies can not take place without commensurate

globalization of the banking sector. In fact, the banking sector is at the very center of

the

globalization process. It is through this sector that capital and money flows, giving

substance to the globalization process.

For the purpose to know the capital and money flow of people I did a research on the

investment strategy of people and also to know how much they are comfortable with

the

various investment instruments available to them.

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INDUSTRY PROFILE

The growth in the Indian Banking Industry has been more qualitative than quantitative

and it is expected to remain the same in the coming years. Based on the projectionsmade in the "India Vision 2020" prepared by the Planning Commission and the Draft

10th Plan, the report forecasts that the pace of expansion in the balance-sheets of

banks is likely to decelerate. The total assets of all scheduled commercial banks by

end-March 2010 is estimated at Rs 40,90,000 crores. That will comprise about 65 per

cent of GDP at current market prices as compared to 67 per cent in 2002-03. Bank

assets are expected to grow at an annual composite rate of 13.4 per cent during the

rest of the decade as against the growth rate of 16.7 per cent that existed between

1994-95 and 2002-03. It is expected that there will be large additions to the capital

base and reserves on the liability side.

The Indian Banking Industry can be categorized into non-scheduled banks andscheduled banks. Scheduled banks constitute of commercial banks and co-operative

banks. There are about 67,000 branches of Scheduled banks spread across India. As

far as the present scenario is concerned the Banking Industry in India is going through

a transitional phase.

The Public Sector Banks (PSBs), which are the base of the Banking sector in India

account for more than 78 per cent of the total banking industry assets. Unfortunately

they are burdened with excessive Non Performing assets (NPAs), massive manpower

and lack of modern technology. On the other hand the Private Sector Banks are

making tremendous progress. They are leaders in Internet banking, mobile banking,

phone banking, ATMs. As far as foreign banks are concerned they are likely tosucceed in the Indian Banking Industry.

In the Indian Banking Industry some of the Private Sector Banks operating are IDBI,

ING Vyasa Bank, SBI Commercial and International Bank Ltd, Bank of Rajasthan

Ltd. and banks from the Public Sector include Punjab National bank, Vijaya Bank,

UCO Bank, Oriental Bank, Allahabad Bank among others. ANZ Grindlays Bank,

ABN-AMRO Bank, American Express Bank Ltd, Citibank are some of the foreign

banks operating in the Indian Banking Industry.

Public Sector banks that imbibe new concepts in banking, turn tech savvy, leaner and

meaner post VRS and obtain more autonomy by keeping governmental stake to the

minimum can succeed in effectively taking on the private sector banks by virtue of

their sheer size. Weaker PSU banks are unlikely to survive in the long run.

Consequently, they are likely to be either acquired by stronger players or will be

forced to look out for other strategies to infuse greater capital and optimize their

operations.

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Foreign banks are likely to succeed in their niche markets and be the innovators in

terms of technology introduction in the domestic scenario. The outlook for the private

sector banks indeed looks to be more promising vis--vis other banks. While their

focused operations lower but more productive employee force etc will stand them

good, possible acquisitions of PSU banks will definitely give them the much needed

scale of operations and access to lower cost of funds. These banks will continue to bethe early technology adopters in the industry, thus increasing their efficiencies.

Also, they have been amongst the first movers in the lucrative insurance segment.

Already, banks such as ICICI Bank, HDFC Bank and Standard Chartered Bank have

forged alliances with Prudential Life, Standard Life and Bajaj Allianz respectively.

This is one segment that is likely to witness a greater deal of action in the future. In

the near term, the low interest rate scenario is likely to affect the spreads of majors.

This is likely to result in a greater focus on better asset-liability management

procedures. Consequently, only banks that strive hard to increase their share of fee-

based revenues are likely to do better in the future.

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COMPANY PROFILE

STANDARD CHARTERED BANK

Standard Chartered is the world's leading emerging markets bank headquartered in

London. Its businesses however, have always been overwhelmingly international.

This is summary of the main events in the history of Standard Chartered and some of

the organizations with which it merged.

The Early Years:

Standard Chartered is named after two banks that merged in 1969. They were

originally known as the Standard Bank of British South Africa and the Chartered

Bank of India, Australia and China. Of the two banks, the Chartered Bank is the olderhaving been founded in 1853 following the grant of a Royal Charter from Queen

Victoria. The moving force behind the Chartered Bank was a Scot, James Wilson,

who made his fortune in London making hats. James Wilson went on to start The

Economist, still one of the world's pre-eminent publications.

Nine years later, in 1862, the Standard Bank was founded by a group of businessmen

led by another Scot, John Paterson, who had immigrated to the Cape Province in

South Africa and had become a successful merchant. Both banks were keen to

capitalize on the huge expansion of trade between Europe, Asia and Africa and to reap

the handsome profits to be made from financing that trade.

The Chartered Bank opened its first branches in 1858 in Calcutta and Mumbai. A

branch opened in Shanghai that summer beginning Standard Chartered's unbroken

presence in China. The following year the Chartered Bank opened a branch in Hong

Kong and an agency was opened in Singapore.

In 1861 the Singapore agency was upgraded to a branch which helped provide finance

for the rapidly developing rubber and tin industries in Malaysia.

In 1862 the Chartered Bank was authorized to issue bank notes in Hong Kong.

Subsequently it was also authorized to issue bank notes in Singapore, a privilege itcontinued to exercise up until the end of the 19th Century. Over the following decades

both the Standard Bank and the Chartered Bank printed bank notes in a variety of

countries including China, South Africa, Zimbabwe, Malaysia and even during the

siege of Making in South Africa. Today Standard Chartered is still one of the three

banks which print Hong Kong's bank notes.

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Expansion in Africa and Asia:

The Standard Bank opened for business in Port Elizabeth, South Africa, in 1863. It

pursued a policy of expansion and soon amalgamated with several other banks

including the Commercial Bank of Port Elizabeth, the Colesberg Bank, the British

Kaffarian Bank and the Fauresmith Bank.

The Standard Bank was prominent in the financing and development of the diamond

fields of Kimberly in 1867 and later extended its network further north to the new

town of Johannesburg when gold was discovered there in 1885. Over time, half the

output of the second largest goldfield in the world passed through the Standard Bank

on its way to London.

In 1892 the Standard Bank opened for business in Zimbabwe, and expanded into

Mozambique in 1894, Botswana in 1897, Malawi in 1901, Zambia in 1906, Kenya,

Zanzibar and the Democratic Republic of Congo (D.R.C.), in 1911 and Uganda in1912. Of these new businesses, Botswana, Zanzibar and the D.R.C. proved the most

difficult and the branches soon closed. A branch in Botswana opened again in 1934

but lasted for only a year and it was not until 1950 that the Bank re-opened for

business in Botswana.

In Asia the Chartered Bank expanded opening offices in, Myanmar in 1862, what is

now Pakistan and Indonesia in 1863, the Philippines in 1872, Malaysia in 1875, Japan

in 1880 and Thailand in 1894. Some 34 years after the Chartered Bank appointed an

agent in Sri Lanka it opened a branch in 1892 to take advantage of business from the

tea and rubber industries. During 1904 a branch opened in Vietnam. Both the

Chartered and the Standard Bank opened offices in New York and Hamburg in theearly 1900s. The Chartered Bank gain the first branch license to be issued to a foreign

bank in New York.

The Impact of War:

Even the First World War offered opportunities for expansion when the Standard

Bank set up a branch in Tanzania shortly after British troops occupied the formerly

German administered Dar es Salaam in September 1916. Both banks survived the

inter-war years but the world trade slump led to the closure of operations in the

Canary Islands, Liberia, the Netherlands, and Equatorial Guinea. Disaster struck the

Chartered Bank's office in Yokohama, Japan, when an earthquake destroyed it in 1923killing a number of staff. The Second World War particularly affected the Chartered

Bank when Japan occupied numerous Asian countries.

The Post War Years:

After the Second World War many countries in Asia and Africa gained their

independence. This led to local incorporation in some countries, particularly in Africa.

Other operations such as those in Iraq, Angola, Myanmar and Libya were

nationalized, while in Indonesia the Jakarta office was destroyed in an attempted coup

d'etat. In 1948 the Chartered Bank opened in Bangladesh and during 1957 it acquiredthe Eastern Bank. The Eastern Bank gave the Chartered Bank a network of branches

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including Aden, Bahrain, Beirut, Cyprus, Lebanon, Qatar and the United Arab

Emirates. The Chartered Bank also entered into a joint venture to form the Irano-

British Bank, which opened for business in 1959. The bank grew rapidly and had 24

branches when it was nationalized in 1981.

By the mid 1950s the Standard Bank had around 600 offices in Southern, Central andEastern Africa. Its network grew substantially in 1965 when it merged with the former

Bank of British West Africa, which had some 60 branches in Nigeria, 40 branches in

Ghana and eleven branches in Sierra Leone in addition to operations in Cameroon and

Gambia. Despite these acquisitions and expansion into new countries such as Mexico,

South Korea and Oman (1968), both the Standard and Chartered Bank networks were

comparatively small. Both viewed the future with some trepidation as the need to

protect them from acquisition became ever more apparent.

Standard Chartered PLC In 1969 the decision was made by the Standard Bank and the

Chartered Bank to undergo a friendly merger thus forming Standard Chartered PLC.

It was one year later that the descendants of the "Chartered Bank of India, Australiaand China" were finally permitted to open a representative office in Sydney,

Australia. Standard Chartered subsequently acquired the UK based Hodge Group, in

which it already had a minority shareholding, and the Wallace Brothers Group. The

Hodge Group brought to Standard Chartered an extensive network of UK offices

specializing in installment credit and industrial leasing, and after a period of

rationalization its name was changed to Chartered Trust Limited. Standard Chartered's

operations in Jersey emerged from the integration of other Hodge Group businesses

with those of Wallace Brothers Bank (Jersey), Limited.

Standard Chartered decided, after the merger, to expand the Group outside its

traditional markets. In Europe a number of offices were opened including Austria,

Belgium, Denmark, Ireland, Spain and Sweden as well as several major cities in the

UK. Standard Chartered also opened offices in Argentina, Canada, Colombia, the

Falkland Islands, Panama and Nepal. In the USA a number of offices were opened

and three banks were acquired. These included the Union Bank of California, which

gave Standard Chartered a presence in Brazil and Venezuela. The opening of a branch

in Istanbul in 1986 was overshadowed by a far more dramatic event when Lloyds

Bank of the UK made a hostile take-over bid for Standard Chartered. Standard

Chartered won its right to remain independent but entered into a period of

considerable change.

By the late 1980s Standard Chartered already had considerable exposure to third

world debt. To this were added provisions against loans to corporations and

entrepreneurs who could not meet their commitments. Standard Chartered reviewed

its operations and decided to focus on its core strengths of Consumer Banking,

Corporate & Institutional Banking and Treasury in its well-established operations in

Asia, Africa and the Middle East. This led to a series of divestments notably in

Europe, the United States and Africa. During this time staff numbers were reduced;

businesses not considered core were sold or closed; associate holdings disposed of;

unprofitable branches closed and back office functions consolidated. In addition

expensive buildings were sold with the proceeds reinvested in the business, and the

senior management team was radically changed and strengthened.

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Standard Chartered in the 1990s

Even within this period of apparent retrenchment Standard Chartered expanded its

network, re-opening in Vietnam in 1990, Cambodia and Iran in 1992, Tanzania in

1993 and Myanmar in 1995. With the opening of branches in Macau and Taiwan in

1983 and 1985 plus a representative office in Laos (1996), Standard Chartered nowhas an office in every country in the Asia Pacific Region with the exception of North

Korea.

In 1998 Standard Chartered concluded the purchase of a controlling interest in Banco

Exterior de Los Andes (Extebandes), an Andean Region bank involved primarily in

trade finance. With this purchase Standard Chartered now offers full banking services

in Colombia, Peru and Venezuela. In 1999, Standard Chartered acquired the global

trade finance business of Union Bank of Switzerland. This acquisition makes

Standard Chartered one of the leading clearer of dollar payments in the USA.

Standard Chartered also opened a new subsidiary, Standard Chartered Nigeria Limited

in Lagos, acquired 75 per cent of the equity of Nakornthon Bank, Thailand; and

agreed terms to acquire 89 per cent of the share capital of Metropolitan Bank of the

Lebanon.

Standard Chartered today

Today Standard Chartered is the world's leading emerging markets bank employing

30,000 people in over 500 offices in more than 50 countries primarily in countries in

the Asia Pacific Region, South Asia, the Middle East, Africa and the Americas. The

new millennium has brought with it two of the largest acquisitions in the history ofthe bank with the purchase of Grindlays Bank from the ANZ Group and the

acquisition of the Chase Consumer Banking operations in Hong Kong in 2000.

These acquisitions demonstrate Standard Chartered firm committed to the emerging

markets, where it has a strong and established presence and where it sees its future

growth. Standard Chartered employs 30,000 people in over 500 locations in more than

50 countries in the Asia Pacific Region, South Asia, the Middle East, Africa, the

United Kingdom and the Americas. It is one of the world's most international banks,

with a management team comprising 70 nationalities. Standard Chartered is listed on

both the London Stock Exchange and the Stock Exchange of Hong Kong and is in the

top 25 FTSE-100 companies, by market capitalization. It serves both Consumer andWholesale Banking customers. Consumer Banking provides credit cards, personal

loans, mortgages, deposit taking and wealth management services to individuals and

small to medium sized enterprises. Wholesale Banking provides corporate and

institutional clients with services in trade finance, cash management, lending, custody,

foreign exchange, debt capital markets and corporate finance.

Standard Chartered is well-established in growth markets and aims to be the right

partner for its customers. The Bank combines deep local knowledge with global

capability. The Bank is trusted across its network for its standard of governance and

its commitment to making a difference in the communities in which it operate.

Standard Chartered Bank serves both Consumer and Wholesale Banking customers.

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Consumer Banking provides credit cards, personal loans, mortgages, deposit taking

and wealth management services to individuals and small to medium sized

enterprises.

Wholesale Banking provides corporate and institutional clients with services in tradefinance, cash management, lending, custody, foreign exchange, debt capital markets

and corporate finance.

BUSINESS OF THE COMPANY

Standard Chartered operates in many of the world's fastest growing markets, and

derives over 90 per cent of its profits from the emerging trade corridors of Asia,

Africa and the Middle East.

To meet the diverse needs of our customers, Standard Chartered also offers a broad

range of Products and Services:

INSURANCE

MUTUAL FUNDS

SAVING ACCOUNTS

FIXED DEPOSITS

EQUITY

IPO

LOANSCOMMODITY

FOREIGN EXCHANGE

TELEBANKING

MOBILE BANKING

CREDIT CARDS

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CUSTOMERS OF THE COMPANY

Understanding that each customer's needs are unique, Standard Chartered customizes

Client Solutions for risk management, yield enhancement, liquidity management and

debt financing.

Standard chartered bank gives attention towards customer relationship management

(CRM). CRM enable it to get the root cause of customer problems and issues much

faster and, hence, address customer complaints proactively and rapidly.

The shift from branch counter to e-channels has indeed enhanced customer service

and convenience. It solves the problem of customer through interactive voice response

systems/ call centers.

ACHIEVEMENT OF THE COMPANY AND TECHNOLOGYUSED:

Standard Chartered Bank is the fastest growing private sector financial services

company in India. It is adopting various prudential accounting norms for classification

of assets, income recognition and loan loss provisioning, latest IT innovation and

revising its existing business model to stand firm in this cut throat competition. It

combines an in-depth knowledge of local markets with global product expertise to

offer effective financial solutions. The company is using advertisements, kiosks as

well as Internet to facilitate services.

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AN OVERVIEW OF THE INVESTMENT

In its broadest sense, an investment is a sacrifice of current money or other resources

for future benefits. Numerous avenues of investment are available today. You can

either deposit money in a bank account or purchase a long term government bond orinvest in the equity shares of a company or contribute to a provident fund account or

buy a stock option or acquire a plot of land or invest in some other form.

The two key aspects of any investment are time and risk. The sacrifice takes place

now and is certain. The benefit is expected in the future and tends to be uncertain. In

some investments (like government bonds) the time element is the dominant attribute.

In other investments (like stock options) the risk element is the dominant attribute. In

yet other investments (like equity shares) both time and risk are important.

Almost everyone owns a portfolio of investments. The portfolio is likely to comprise

financial assets (bank deposits, bond, stocks, and so on). The portfolio may be resultof a series of a haphazard decision or may be the result of deliberate and careful

planning.

The economic well- being in the long run depends significantly on how wisely or

foolishly one invests. An investor has a wide array of investment alternatives

available to you. Viz. Non-marketable Financial assets, Equity shares, Bonds, Money

market instruments, Mutual Funds Life Insurance, Real Estate, Precious Objects and

Financial Derivatives.

The game of the investment, as any other game, requires certain qualities and virtues

on the part of the investors. These are as follows: contrary thinking, patience,composure, flexibility and openness, and decisiveness.

The commonly stated investment goals are:-

Income: To provide a steady stream of income through regular interest/ dividend

payment.

Growth: To increase the value of the principal amount through capital appreciation.

Stability: To protect the principal amount investment from the risk of loss.

Since income and growth represent two ways by which return is generated and

stability implies containment or even elimination of risk. Interested in high return andlower risk.

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NEED FOR THE STUDY

In fact, the banking sector is at the very center of the globalization process. It isthrough this sector that capital and money flows, giving substance to the globalization

process.

For the purpose to know the capital and money flow of people I did a research to

know the investment strategy of people and also to know how much they are

comfortable with the various investment instruments available to them, what the

motive factors are there by which investment decisions are influenced, whether high

income category prefer much risk in comparison to lower income people, whether age

has any effect on investment strategy of people, which category of employee prefer

which investment instruments, what attitudes do employees have towards investment

instruments available to them.

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OBJECTIVES OF THE STUDY

To understand investment strategies of the people.

To find that whether income has any effect in choosing investment instruments.

To compare the risk profile of different categories of employee

To know those whether male are more risk taker or female.

To find the appropriate customers for various instruments available.

To help me widen my perspective by an exposure to real life organizational and

environmental situations.

To help the company to find its appropriate customers for the investment instruments

available.

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RESEARCH METHODOLOGY

Research Problems:

Does age of people has any relationship with the investment instruments available?

Does income of people has any relationship with the investment instruments

available?

Does gender of people has any relationship with the investment instruments available?

Does employee category of people has any relationship with the investment

instruments available?

Does risk profile has any relationship with the investment instruments available?

Research design:

Methodology used for data collection in this study is survey. Survey is a research

technique in which information is gathered from a sample of people by the use of a

questionnaire or interview; a method of data collection based on communication with

a representative sample of individuals.

Sample Size:

The information was collected from 122 respondents from different places of South

Delhi, constituting it to be the sample size. People were chosen randomly from

different places such as Shopping malls, shops, hospitals, court, offices, educational

institutes, etc.

SOURCE OF DATA

PRIMARY DATA:

Primarily data was collected through questionnaires which were made to filled up by

different people from South Delhi Region, it was done in purely random manner and

according to my own convenience i.e. going to different people at different places ,

belonged to different income groups, gender, age group, profession etc.

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Data Collection:

Questionnaire was the instrument chosen for data collection in this study. Questions

were structured (non- disguising), closed ended type.

Data processing

A number of tables and charts were prepared to bring the main characteristics of the

collected data. Inferences were drawn from the data collected and charts and diagrams

were shown wherever necessary. A hypothesis study was made.

Statistical tools used:

Collected data was entered in SPSS software datasheet, for various descriptive

statistical analyses. I used various tools:-

Pie Charts:A pie chart is useful for comparing proportions. For example, you may use a pie chart

to demonstrate that a greater proportion of women are enrolled in a certain class.

Pie Chart produces a pie chart for each variable named on the variable subcommand.

By default, one slice corresponds to each category defined by the variable with one

slice representing all missing values. Pie chart are labeled with value labels or withthe value if no label is defined.

Bar Charts:

A bar chart, also known as a bar graph, is a chart with rectangular bars of lengthsproportional to that value that they represent. Bar charts are used for comparing two

or more values. The bars can be horizontally or vertically oriented. Sometimes a

stretched graphic is used instead of a solid bar.

They were used as they are really helpful in representing data in a clearer manner

graphically which is quite easier to understand.

Cross Tabulation Tables:Cross tabulation was done in order to know the exact relationship between different

variables. It was achieved using counts as well as percentage. It shows us the real

picture how different variables are related but the significance of their relationship

was yet to be seen. Use of percentage showed us the clear picture which exists

between High Income or Age and Life style diseases.

Chi Square test:Although there may appear some kind of relationship between the two variables, is

there any reason to believe that the relationship between high income group orgrowing age and investments is style anything more than random variation?

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In order to do Significance testing of cross table analysis i.e. to know whether the

variables are independent of each other or they share any relationship and if they do

then how significant that is. This test tells us the significance of relationship between

two or more variables. The best thing about this test is, it is suitable to any kind of

data.Since in this particular research, we have to find out the significance of relationship

between two variables, so this kind of tool is really effective in this regard.

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FINDINGS OF QUESTIONNAIRE:

Q.1, which category do you belong to?

When it was asked from the respondents, their responses were found as majority of

them i.e., 37 were businessman followed by 31 government employees, 29 private

employee and 25 self employed.

Q.2, which age category do you belong to?

age catogory

55

41

16

10

0

10

20

30

40

50

60

below 30 31-40 41-50 above 51age group

no.ofrespond

Series1

Out of 122 respondents 55 were below 30, 41 were between 31 to 40,16 were between

41 and 50 and the rest 10 were of above 51 years of age.

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Q.3, Your gender?

Out of 122 respondents 93 were male and 29 were female.

Q.4 In which investment instruments do you mostly like to invest?

Majority of male respondents showed their interest in insurance, stocks and mutual

funds, whereas majority of females showed their interest in bank deposits and gold.

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Q. 5 Which annual income group do you belong to?

out of total respondents, 45 were under the slab of 3-5 lakhs, 41 were more than 5

lakhs, 28 were between 1-3 lakhs and the rest 8 were of less than 1 lakh of income

group.

Q.6 What is the level of risk you can withhold while making investment?

Out of 122 respondents, 44 could withhold low risk, 41 moderate and rest 37 could

withhold high risk.

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Q.7 What kind of investment do you like?

When respondents were asked about investment term, majority of them i.e., 65 %

showed their interest in short term and 21 % in long term, whereas 14 % were

unaware whether to invest in long term or short term investment instruments.

Q.8 Which thing you consider most while making investment decisions ?

From this chart, it is clear that 42 respondents considered expected growth as one of

the important factor while making investment decisions, however, 41 of them

considered expected return, 25 expected risk while very few i.e., 14 considered

expected value on their investments.

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Q.9 What feature or flexibility you expect from investment companies?

When respondents were asked about features or flexibility expected, majority of them

told about less policy period and low premium whereas few of them told about return.

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DATA ANALYSIS

HYPOTHESIS

1 solution:-

Null Hypothesis (H0): There is no significant relationship between age of peopleand investment instruments available

Alternative Hypothesis (H1): There is a significant relationship between age ofpeople and investment instruments available

Case Processing Summary

Cases

Valid Missing Total

N Percent N Percent N Percent

INSTRUMENTS *

AGE122 100.0% 0 .0% 122 100.0%

AGE GROUP (YEARS)

below 30 31-40 41-50 51-above TOTAL

Instruments

Bank deposit 9 8 4 3 24

PO Scheme 7 3 2 1 13

Stock 17 6 2 2 27Mutual Fund 9 2 2 0 13

Govt. Securities 4 3 1 1 9

Gold 2 2 1 0 5

Insurance 7 17 4 3 31

TOTAL 55 41 16 10 122

In this cross tabulation we find that people of low age category prefer to invest in

securities markets. But higher age category prefers to go more with bank deposits and

insurance.

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Chi-Square Tests

Value df Asymp. Sig. (2-sided)Pearson Chi-Square 24.328a 18 .145

Likelihood Ratio 29.422 18 .043

N of Valid Cases 122

In this case, Pearson chi-square tests the first hypothesis that the row and column

variables are dependent. The actual value of the statistic isn't very informative.

The significance value (Asymp. Sig.) has the information we're looking for. The

lower the significance value, more are the chances that the two variables are

dependent (related).

Here,

p-value = 0.145 > 0.05

So, we accept the null hypothesis.

The significance value is high in this case, that it is displayed as .145 which means

that it would appear that the two variables are, unrelated. A value less than .05 is

considered to be a sign of significant relationship between two variables i.e. it tells usthat they are dependent (related).

So, in this case due to the high value of Asymp. Sig., we conclude that there is no

significant relationship between Age and Investment Instruments available.

2 Solution :

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Null Hypothesis (H0): There is no significant relationship between income andinvestment instruments available

Alternative Hypothesis (H1): There is a significant relationship between incomeand investment instruments available


Cases

Valid Missing Total


INSTRUMENTS *

INCOME122 100.0% 0 .0% 122 100.0%

INCOME GROUP (in Rs)

Instruments below 1 lakh 1-3 lakh 3-5 lakh 5 lakh-above TOTAL

Bank deposit 7 10 5 2 24

PO Scheme 1 5 4 3 13

Stock 0 3 10 14 27

Mutual Fund 0 0 6 7 13Govt.

Securities 0 1 5 3 9

Gold 0 1 4 0 5


TOTAL 8 28 45 41 122

In this cross tabulation, we find that people of low income group go for smallinvestment like bank deposits and post office schemes but as income increases their

preference for investment changes and they prefer to invest in security market, like

stock and mutual fund.

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3 Solution :-

Null Hypothesis (H0): There is no significant relationship between gender andinvestment instruments available

Alternative Hypothesis (H1): There is a significant relationship between genderand investment instruments available


Cases

Valid Missing Total


INSTRUMENTS *

GENDER100 100.0% 0 .0% 100 100.0%

Instruments GENDER

MALE FEMALE TOTAL

Bank deposit 12 12 24

PO Scheme 9 4 13

Stock 25 2 27

Mutual Fund 13 0 13

Govt. Securities 6 3 9

Gold 0 5 5Insurance 28 3 31

TOTAL 93 29 122

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Here,

p-value = 0.000 < 0.05

So, we reject the null hypothesis.

The significance value is less in this case, that it is displayed as .000 which means that

it would appear that the two variables are, related. A value less than .05 is considered

to be a sign of significant relationship between two variables i.e. it tells us that they

are dependent (related).

So, in this case due to the low value of Asymp. Sig., we conclude that there is

significant relationship between gender and Investment Instruments available. i.e. by

cross tabulation table we find that female generally go for small saving instruments

like post office, bank deposits and also for gold, on the other hand male prefer to

invest in securities market like shares, stocks having no interest in gold.

Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 33.906a 6 .000



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4 Solution :-

Null Hypothesis (H0): There is no significant relationship between employeecategory and investment instruments available

Alternative Hypothesis (H1): There is a significant relationship betweenemployee category and investment instruments available


Cases

Valid Missing Total


INSTRUMENTS *

EMPPLOYEE122 100.0% 0 .0% 122 100.0%

Employee category

Instruments

govt.

employee

private

employee self employed businessman TOTAL

Bank deposit 5 12 5 2 24PO Scheme 3 6 3 1 13

Stock 1 10 5 11 27

Mutual Fund 0 3 3 7 13

Govt. Securities 4 2 2 1 9

Gold 1 2 2 0 5


TOTAL 31 29 25 37 122

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Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 41.764a 12 .000



In this case, the significance value (Asymp. Sig.) is .000. The lower the significance

value, more are the chances that the two variables are dependent (related).

p-value = 0.000 < 0.05


The significance value is more in this case, that it is displayed as .000 which means

that it would appear that the two variables are related. A value less than .05 isconsidered to be a sign of significant relationship between two variables i.e. it tells us

that they are dependent (related).

So, in this case due to the low value of Asymp. Sig., we conclude that there is

significant relationship between employee category and Investment Instruments

available.

By the cross tabulation table we find that government employees generally go for

insurance in comparision to private or self-employed people.

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5 Solution :-

Null Hypothesis (H0): There is no significant relationship between investmentinstruments and risk profile

Alternative Hypothesis (H1): There is a significant relationship betweeninvestment instruments and risk profile


Cases

Valid Missing Total


INSTRUMENTS * RISK 122 100.0% 0 .0% 122 100.0%

Risk Profile

Instruments High Moderate Low TOTAL

Bank deposit 0 7 17 24

PO Scheme 1 5 7 13

Stock 25 2 0 27

Mutual Fund 9 4 0 13

Govt. Securities 3 4 2 9

Gold 0 2 3 5

Insurance 6 17 8 31

TOTAL 44 41 37 122

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Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 74.657a

12 .000Likelihood Ratio 86.587 12 .000


In this case, the significance value (Asymp. Sig.) is .000. The lower the significance

value, more are the chances that the two variables are dependent (related).

p-value = 0.000 < 0.05


The significance value is less in this case, that it is displayed as .000 which means that

it would appear that the two variables are, related. A value less than .05 is considered

to be a sign of significant relationship between two variables i.e. it tells us that they

are dependent (related).

So, in this case due to the low value of Asymp. Sig., we conclude that there issignificant relationship between risk profile and Investment Instruments available. i.e.

by cross tabulation table we find that people of high risk profile prefer to invest in

stocks, moderate in insurance while people of risk profile prefer to invest their money

in bank deposits.

PIE CHARTS AND BAR GRAPHS

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1. An analysis of employee category with risk profile

EMPLOYEE CATEGORY WITH RISK PROFILE

0

10

20

30

EMPLOYEE CATEGORY

RISKPRO

LOW

MODERATE

HIGHLOW 14 21 2 7

MODERATE 14 4 5 14

HIGH 3 4 18 16

GOVT.

EMPLOY

PRIVATE

EMPLOY

SELF

EMPLOY

BUSINES

SMAN

Findings:

In the self-employed category there are 2 persons with low risk profile, while 5 in

moderate and 18 with high profile. Private employees having low and moderate riskare 4 each and 21 with low. Government employees are 14, 14 & 3 for low, moderate

& high respectively.

Interpretation:

Self- employed category is more risk taker while government employees are low risk

taker. So, in case of selling any product with high risk we can target self- employed

persons and private employees while in case of low risk we will target government

employees.

2. An analysis of age category with attractive factors:

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AGE CATEGORY WITH ATTRACTIVE FACTORS

0

5

10

15

20

Growth

return

risk

value

Growth 19 12 8 3

return 18 14 3 6

risk 12 8 4 1

value 6 7 1 0

BELOW-30 31-40 41-50 51-above

Interpretation:

By this graph we find that people of low and 41-50 age category look for growth in

their investments, people of age category 31-40 and above 51 look for return. So, we

can pacify them accordingly. They are not much attracted towards risk and values.

3. An analysis of investment type with employee category:

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INVESTMENT TYPE WITH EMPLOYEE CATEGO

0

2

4

6

8

10

12

14

16

18

Bank deposit

PO Scheme

Stock

Mutual Fund

Govt. Securitie

Gold

Insurance

Bank deposit 5 12 5 2

PO Scheme 3 6 3 1

Stock 1 10 5 11

Mutual Fund 0 3 3 7

Govt. Securities 4 2 2 1

Gold 1 2 2 0

Insurance 17 4 5 5

govt.

employee

private

employeeself employed businessman

Interpretation:

In this graph we find that government employees go for insurance, private employee

and businessman for stock.

There are more number of employees who in self-employed category do not know

whether they go for long term investment or short term investment.

4. An analysis of gender with risk profile.

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GENDER WITH RISK PROFILE

0

10

20

30

40

50

RISK PROFILE

NO.OFRESP

ONDEN

MALE

FEMALE

MALE 19 33 41

FEMALE 18 8 3

LOW MODERATE HIGH

Findings:

In low risk profile, females are 18 and males are 19. In moderate females are 8 and

males 33 and in high females are 3 and males are 41.

Interpretation:

It is found that females are risk-averse and go for small saving instruments. On the

other hand male are more risk taker.

5. An analysis of income category with risk profile.

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IN C O M E C A T E G O R Y W IT H R IS K

0

20

40

INCO ME CATE G

NO.OFRESPONDENTS

LO W

M OD E R A

HIGHLO W 8 16 10 3

M OD ER AT 0 10 23 8

HIGH 0 2 12 30

B E L O W

L A K H

1 L A K H

3 L A K H

3 LA K H

5 LA K H

5 LA K H

A B O V E

Findings:

30 people having income more than 5 lakh are risk taker. 23 in 3lakh-5lakh are

moderate risk taker while below 3 lakh are of low risk profile.

Interpretation:

We get the result that low income people are risk-averse. So, if we go for small saving

instruments we should hit our target on low-income people. But, as the income

increases people take more risk.

6. An analysis of employee category with investment instrument.

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GOVT. EMPLOYEE WITH INVESTMENT INSTRUMENTS

16%

10%

3%0%

13%3%

55%

Bank depositPO Scheme

Stock

Mutual Fund

Govt. Securi ties

Gold

Insurance

Findings:

55% respondents are interested in bank deposits, 18% insurance, 13% government

securities 10 % in post office scheme and 3% each in mutual fund and gold.

Interpretation:

By this graph we find that government employees prefer to invest in insurance and

then bank deposits etc. So, we can target them accordingly.

7. An analysis of self employed people with investment instrument.

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SELF EMPLOYED WITH INVESTMENT INSTRUMENTS

20%

12%

20%12%

8%

8%

20% Bank depositPO Scheme

Stock

Mutual Fund

Govt. Securi ties

Gold

Insurance

Interpretation:

By this graph we find that self-employed people prefer to invest in stocks and mutual

funds and then go for insurance etc. So, we can target them according to the

investment instrument available.

8. An analysis of age category with investment type.

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AGE CATEGORY WITH INVESTMENT TYPE

0

10

20

30

40

LONG TERM INV.

SHORT TERM INV.

CANT SAY

LONG TERM INV. 31 20 8 4

SHORT TERM INV. 7 6 2 3

CANT SAY 7 5 0 0

BELOW 30 31-40 41-50 51-ABOVE

Findings:

In below 30 years age group, 31 respondents are in low term investment, and 7 cant

say, in 31-40 years age group 20 are in long term investment and 5 cant say, in 41

50 age group 8 are in long term investment.

Interpretation:

We find that low age category group, go for long term investment and also there are

higher numbers of people who do not know that whether they prefer long or short

term investments.

9. An analysis of private employee category with investment instrument.

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PRIVATE EMPLOYEE WITH INVESTMENT INSTRUM ENTS

31%

15%26%

8%5%

5%10% Bank deposit

PO Scheme

Stock

Mutual Fund

Govt. Securities

Gold

Insurance

Interpretation:

By this graph we find that private employees prefer more bank deposits and stocks.

So, we can target them for these instruments.

10. An analysis of age category with risk profile.

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A G E C A T E G O R Y W IT H R IS K P

0

10

20

30

LO W

M ODE RA

HIGH

LO W 15 17 5 0

M ODE RAT 12 18 6 7

HIGH 28 6 5 3

B E LO W -30 31 -40 41 -50 51-A BO VE

Interpretation:

In this graph, it is very clear that low age category people are the person of high risk

taker and as the age increases they become risk averse. They shift towards moderate

risk takers.

LIMITATIONS

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The study was conducted in New Delhi city with survey being done in various

parts of South Delhi region only. Therefore the findings of the study may not be

universally applicable.

Due to lack of time survey was done on small sample size which may not be

representative of whole sample unit.

The study was conducted in the smaller time frame, since then consumer

choices for investment are subject to change, so the findings of the study may not

be fully relevant at all future time period.

Some respondents might have given biased answers, which might have an

impact on the findings of the studied.

CONCLUSIONS

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Investment decisions are influenced by various motives. Some people invest in a

business to acquire control and enjoy the prestige associated with it. Some people

invest in expensive yachts and famous villas to display their wealth. Most investors,

however, are largely guided by the pecuniary motive of earning a return go hand in

hand. While investors like returns they abhor risk. Investment decisions, therefore,

involve a tradeoff between risk and return.

From the study it is clear that people of low income generally go to invest

in small saving accounts while people of high income besides these also invest in

securities markets. As the income increases, more and more options are available.

Age can affect the investment decisions for buying an investment

instrument. People of low age group prefer securities markets, but higher age group

prefer insurance and bank deposits.

Investment decision is influenced by the category of employee in which

he belongs. In my study I got that government employees generally go for insurance,private employees go for bank deposits and stocks while self- employees go for

stocks.

I also found that females are risk averse. So, bank can target females for

small saving instruments like saving accounts etc and due to the risk taker nature of

males, bank can target males for its stocks, mutual funds and insurance etc.

We find that people of low and 41-50 age category look for growth in their

investments, people of age category 31-40 and above 51 look for return. So, we can

pacify them accordingly. They are not much attracted towards risk and values.

RECOMMENDATIONS

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Bank should target the customers according to income category. High income people

can invest in various instruments available like stocks, mutual funds, insurance etc.

Low income people invest their money in small saving instruments like saving

accounts etc. So, bank can target its customers accordingly.

Due to the risk averse nature of females bank can target females for those investment

instruments where there be no risk.

From the study, I got that government employees do their more investment in

insurance while private and self-employees invest in stocks etc. So, bank can target

accordingly.

Young generations are more risk prone in comparision to old generation. So, bank

should target young generation for its instruments related to risk and old generation in

which less risk be attached.

Mostly people invest when they find there are growth and return. They are not

attracted by risk and value. So, bank should pacify their customers accordingly.

EXHIBITS

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QuestionnaireDate: ___ /_07 /2008

Dear Sir/Madam,

I the student of MBA 07-09 batch of FMSR, AMU, am conducting a survey for my

project. I would be obliged to you for your co-operation in responding to thefollowing questions:

Q1. Which category do you belong to?

a. Government employee b. Private employee

c. Self-employed d. Businessman

Q2. Which age category do you belong to?

a. below-30 b. 31-40 c. 41-50 d. above 51

Q3. Your Gender?

a. Male b. Female

Q 4. In which investment instruments do you mostly like to invest?

a. Bank deposits b. Post Office schemes c. Stocks

d. Mutual Funds e. Government securities f. Gold

g. Insurance

Q5. Which annual income group do you belong to?

a. less than 1 lakh b. between 1 lakh 3 lakh

c. between 3 lakh 5 lakh d. more than 5 lakh

Q6. What is the level of risk you can withhold while making investment?

a. Low b. Moderate c. High

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Q7. What kind of investment do you like?

a. Short term investment b. Long term investment

c. Cant say

Q8. Which things you consider most while making investment decisions?

a. Expected return b. Expected risk

c. Expected growth d. Expected value

Q9. What feature or flexibility you expect from investment companies?

a. Low premium b. More Return

c. Less policy period d. Fixed return

BIBLIOGRAPHY

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www.nse-india.com

www.standardchartered.com

www.kotakmahindra.com

www.bajajallianz.com

www.economictimes.com

www.investment.com
http://www.nse-india.com/http://www.standardchartered.com/http://www.kotakmahindra.com/http://www.bajajallianz.com/http://www.economictimes.com/http://www.investment.com/http://www.nse-india.com/http://www.standardchartered.com/http://www.kotakmahindra.com/http://www.bajajallianz.com/http://www.economictimes.com/http://www.investment.com/

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