A

SUMMER INTERNSHIP PROJECT ON

INVESTMENT PATTERN ON THE BASIS OF RISK PROFILE OF
INVESTORS

SUBMITTED IN
PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE TWO YEAR FULL TIME POST GRADUATE
DIPLOMA IN MANAGEMENT

PREPARED BY:-

UNDER THE GUIDANCE OF :-

VIJAY MANNEWAR

1) Dr. SHALINI SINGH

Roll Number: - 14002

I.T.S-IM

Batch :- 2012-14

2) MR. AMIT SHARMA

BRANCH HEAD
(SHAREKHAN LTD.)

ITS-INSTITUTE OF MANAGEMENT
46, KNOWLEDGE PARK-III, GREATER NOIDA
PH.:- 0120-2331073, 2331000, E-mail: itsim@edu.in

CERTIFICATE:-

This is to certify that Vijay Mannewar a student of Post graduate diploma in management,
Batch (2012-14) of ITS-INSTITUTE OF MANAGEMENT, Roll No. 14002 has undertaken
the Summer Internship Project under my guideance for the Project Title Investment Pattern on
the basis of Risk Profile of Investors. This Project Report is prepared in partial fulfillment for
the Post graduate diploma in management.
To the best of my knowledge, this research work is original and no part of this report has been
submitted by the student earlier to any other institution / university.

Date:-

Faculty Mentors Name:

(Signature)

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ACKNOWLEDGEMENT
The satisfaction of the successful completion of any task wouldnt be complete without the
expression of gratitude to the people who made it possible.
I express my gratitude to Mr. Amit Sharma (Branch head) SHAREKHAN LTD, for his support
and guidance during the survey.
I am very thankful to Dr. Shalini Singh, Faculty, ITS- INSTITUTE OF MANAGEMENT, for
the guidance and interest evinced throughout the preparation of this project.
I also extend my heartfelt gratitude and thanks to Prof. Shekhar Ghosh, General Director, ITSINSTITUTE OF MANAGEMENT.
I take this opportunity, also to express my love and sincere thanks to my family members and
friends for their support and advice during various stage of work.
I also extend my gratitude to the respondents of my survey for their kind co-operation.
But last not the least I thank God almighty for giving me the support for the completion of the
task.

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DECLARATION
I Vijay Mannewar Student of ITS- Institute of Management Greater Noida Batch 2012-14
declare that every part of the project report on Investment Pattern on the basis of Risk profile
of Investors (A Research report of Sharekhan ltd) that I have submitted is original . The
information has been collected from genuine & authentic sources.
The project work is done under the supervision of Dr.Shalini Singh. The work has been
submitted in the partial fulfillment of the required degree PGDM.

Date of Submission of Project: _____________

Place of Submission of Project: _____________

Vijay Mannewar

Facultys Comments:

4 | Page

TABLE OF CONTENT
CHAPTERS

CONTENTS

PAGE NUMBERS

Executive summary

6-7

Introduction of topic

8-12

Introduction of Company

13-33

Objectives of the study

34-35

Research methodology

36-39

Data analysis & interpretation

40-72

Findings & conclusions

73-74

References

75

Appendix

76-77

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6 | Page

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
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pattern and risk bearing capacity of investors while doing investment. For analyzing the data we
used chi- square and phi-Cramer V test in SPSS V 19.0 and use MS Excel 2007 for making
graphs.

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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?
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?

Just started investing in the last year

You understand the basics of investing

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?
Which of the following is important to you:
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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

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)

Sell a portion of the remaining investment (Conservative to Balanced)

Hold the investment and sell nothing (Balanced or Aggressive)

Buy more of the investment (Aggressive)

INVESTMENT GOALS AND OBJECTIVES

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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When do you expect to need to access all or part of your investments:

Less than 1 year (immediate access)

Less than 2 years (short term)

2 to 5 years (short to mid-term)

6 to 10 Years (mid to long term)

Over 10 Years (long term)

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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Age and Income

Your age and your income - particularly the stability of your income - are important factors to
Risk Profile

Investment Style

Conservative

Your primary investment goal is capital protection. You require

stable growth and/or a high level of income, and access to your
investment within 3 years.

Cautious

Your primary investment goal is capital protection. Investors in

this risk profile require fairly stable growth and/or a moderate
level of income. Your investment term is 3 years or more.

Moderate

Your primary investment goal is capital growth. You can tolerate

some fluctuations in the value of your investment in the
anticipation of a higher return. You don't require an income and
you are prepared to invest for 5 years or more.

Moderatley

Your primary investment goal is capital growth. Investors in this

aggressive

risk profile can tolerate a fair level of fluctuations in the value of

you investment in anticipation of possible higher returns. You
don't require an income and you are prepared to invest for 5 to 10
years.

Aggressive

Your primary investment goal is long-term capital growth. You

can tolerate substantial fluctuations in the value of your
investment in the short-term in anticipation of the highest possible
return over a period of 10 years or more.

consider when determining your investment profile. If you are young you can afford to take a
longer term view and any short-term losses may have minimal effect. If your income or
employment is unstable you will need to take this in to account when setting your investment
goals.

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SHAREKHAN LIMITED
INTRODUCTION
Sharekhan is one of the leading retail broking House of SSKI Group which was running
successfully since 1922 in the country. It is the retail broking arm of the Mumbai-based SSKI
Group, which has over eight decades of experience in the stock broking business. Sharekhan
offers its customers a wide range of equity related services including trade execution on BSE,
NSE, Derivatives, depository services, online trading, investment advisory, Mutual Fund
Advisory etc.
The firms online trading and investment site - www.sharekhan.com - was launched on
Feb 8, 2000. The site gives access to superior content and transaction facility to retail customers
across the country. Known for its jargon-free, investor friendly language and high quality
research, the site has a registered base of over two lakh customers. The number of trading
members currently stands More than 8 Lacs. While online trading currently accounts for just
over 8 per cent of the daily trading in stocks in India, Sharekhan alone accounts for 32 per cent
of the volumes traded online.
The content-rich and research oriented portal has stood out among its contemporaries
because of its steadfast dedication to offering customers best-of-breed technology and superior
market information. The objective has been to let customers make informed decisions and to
simplify the process of investing in stocks.
On April 17, 2002 Sharekhan launched Speed Trade, a net-based executable application
that emulates the broker terminals along with host of other information relevant to the Day
Traders. This was for the first time that a net-based trading station of this caliber was offered to
the traders. In the last six months Speed Trade has become a de facto standard for the Day
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Trading community over the net.

On October 01, 2007 Sharekhan again launched his another integrated Software based
product Trade Tiger, a net-based executable application that emulates the broker terminals along
with host of other information relevant to the Day Traders. It has another quality which differs it
from other that it has the combined terminal for EQUITY and COMMODITIES both.
Share khans ground network includes over 1005 centers in 410 cities in India, of which
210 are fully-owned branches. Sharekhan has always believed in investing in technology to build
its business. The company has used some of the best-known names in the IT industry, like Sun
Microsystems, Oracle, Microsoft, Cambridge Technologies, Nexgenix, Vignette, Verisign
Financial Technologies India Ltd, Spider Software Pvt Ltd. to build its trading engine and
content. Previously the Morakiya family holds a majority stake in the company but now a world
famous brand CITI GROUP has taken a majority stake in the company. HSBC, Intel & Carlyle
are the other investors.
With a legacy of more than 80 years in the stock markets, the SSKI group ventured into
institutional broking and corporate finance 18 years ago. Presently SSKI is one of the leading
players in institutional broking and corporate finance activities. SSKI holds a sizeable portion of
the market in each of these segments. SSKIs institutional broking arm accounts for 7% of the
market for Foreign Institutional portfolio investment and 5% of all Domestic Institutional
portfolio investment in the country. It has 60 institutional clients spread over India, Far East, UK
and US. Foreign Institutional Investors generate about 65% of the organizations revenue, with a
daily turnover of over US$ 4 million. The Corporate Finance section has a list of very prestigious
clients and has many firsts to its credit, in terms of the size of deal, sector tapped etc. The group
has placed over US$ 1 billion in private equity deals. Some of the clients include BPL Cellular
Holding, Gujarat Pipavav, Essar, Hutchison, Planetasia, and Shoppers Stop.

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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.

Stock exchange Mumbai

Share khan is the retail broking arm of SSKI, an organization with more then eight
decade of trust and credibility in the stock market.

Amongst pioneers of investment research in the Indian market.

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In 1984 venture into institutional broking and the corporate finance.

Leading domestic player in the Indian institutional business.

Over US$5 billion of private equity deal.

SSKI group companies

SSKI investor services ltd (Sharekhan)

S.S. Kantilal Isharlal securities

SSKI corporate finance.

SSKI - Corporate Structure

80 years of taming Bulls & Bears

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SHAREKHAN PROFILE
SHAREKHAN RETAIL BROKING

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
Clients

MANAGEMENT TEAM

Tarun P. Shah

Mr. Jaideep Arora

BOARD OF DIRECTORS

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Shankar Vailaya

BENEFITS

Free Depository A/c

Secure Order by Voice Tool Dial-n-Trade.

Automated Portfolio to keep track of the value of your actual purchases.

24x7 Voice Tool access to your trading account.

Personalized Price and Account Alerts delivered instantly to your Cell Phone & E-mail
address.

Special Personal Inbox for order and trade confirmations.

On-line Customer Service via Web Chat.

Anytime Ordering.

NSDL Account

Instant Cash Tranferation.

Multiple Bank Option.

Enjoy Automated Portfolio.

Buy or sell even single share.

Branch - Head Office

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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KEY OFFICIALS

DESIGNATION

1. Mr. Shripal Morakhia

Chairman

2. Mr. Tarun Shah

CEO

3. Mr. Kaliyan Raman

Online Sales Head

4. Mr. Jason Pandey and

DP Head

Mr. Pradeep
5. Mr. Hemendra Aggarwal

Cluster Head

6. Mr Amit pal Singh and

Regional Sales Manager

Mr. Maneet Rastogi

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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).

Integration of On-line trading, Saving Bank and De-mat Accounts.

Instant cash transfer facility against purchase & sale of shares.

Competative transaction charges.

Instant order and trade confirmation by E-mail.

Streaming Quotes (Cash & Derivatives).

Personlized market watch.

Single screen interface for Cash and derivatives and more.

Provision to enter price trigger and view the same online in market watch.

TRADE TIGER
TRADE TIGER is an internet-based software application which is the combination of
EQUITY & COMMODITIES, that enables you to buy and sell share and well as commodities
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item instantly. It is ideal for every client of SHAREKHAN LTD.

FEATURES

Integration of EQUITY & COMMODITIES MARKET.

Instant order Execution and Confirmation.

Single screen trading terminal for NSE Cash, NSE F&O & BSE & Commodities.

Technical Studies.

Multiple Charting.

Real-time streaming quotes, tic-by-tic charts.

Market summary (Cost traded scrip, highest value etc.)

Hot keys similar to brokers terminal.

Alerts and reminders.

Back-up facility to place trades on Direct Phone lines.

Live market debts.

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.
PORTFOLIO MANAGEMENT SERVICES
Sharekhan is also having Portfolio Management Services for Exclusive clients.
1. PROPRIME 25 | P a g e

Research & Fundamental Analysis.

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.
2. PROTECH

- Technical Analysis.

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
BETA PORTFOLIO: Positional trading opportunities are identified in the futures
segment based on technical analysis. Inflection points in the momentum cycles are
identified to go long/short on stock/index futures with 1-2 month time horizon. The idea
is to generate the best possible returns in the medium term irrespective of the direction of
the market without really leveraging beyond the portfolio value. Risk protection is done
based on stop losses on daily closing prices.
STAR NIFTY: Trailing Stops Momentum trading techniques are used to spot short term
momentum of 5-10 days in stocks and stocks/index futures. Trailing stop loss method of
risk management or profit protection is used to lower the portfolio volatility and
maximize returns. Trading opportunities are explored both on the long and the short side
as the market demands to get the best of both upwards & downward trends.
3. PROARBITRAGE -

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Exploit price analysis

ONLINE IPO'S AND MUTUAL FUNDS ADVISORY IS AVAILABLE.

PROCESS OF ACCOUNT OPPENING

LEAD MANAGEMENT SYSTEM (LMS) / REFERENCES
CONTACT

TELEPHONE AND PRESONAL VISIT

APPOINTMENT

DEMONSTRATION

AGREE

DISAGREE (CLOSE)

DOCUMANTATION

FILLING THE FORM

SUBMISSION THE FORM

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LOGIN OF THE FORM

SENDING THE ACCOUNT OPENING KIT TO THE CUSTOMER FOR TRADING

CHARGE STRUCTURE

1)- PRE PAID OR AMC A/C: Advance Amount which will be fully adjsted against your brokerage you paid in One
year.
Following Schemes Are Available: -

Brokerage will be chagred -

1) -

750/- Scheme:-

0.05 / 0.50 %

2) -

1000/- Scheme

3)

2,000/- Scheme: -

0.035 / 0.40 %

4)

6,000/- Scheme: -

0.025 / 0.25 %

5)

18,000/- Scheme: -

0.020 / 0.20 %

6)

30,000/- Scheme: -

0.015 / 0.18 %

7)

60,000/- Scheme: -

0.010 / 0.15 %

8) 1,00,000/- Scheme: -

0.0075 / 0.10 %

0.045 / 0.45 %

Minimum Margine of Rs. 25000/- is Required for Account Opening.

Annual Maintanance Charges will NIL for 1st year and Rs. 400/- from 2nd year.
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- EXPOSURE : 4 TIMES (ON MARGINE MONEY)

- EXPOSURE : 10 TIMES (ON MAX TRADING)
- ONLINE IPO'S AND MUTUAL FUNDS ADVISORY IS AVAILABLE.
We are having tie-up with Eleven banks for online fund transfering i.e. HDFC, ICICI, IDBI,
CITI, Union Bank of India,
Bank of Punjab,

Oriental Bank of Commerce, INDUSIND, AXIS, Centurian

Bank of India and Yes Bank.

Company Provide 4-6 E-mail to there customers per day.

Online Trade in Share
Sharekhan customers can online trade through there computers, through internet during the
market timings.
Online Fund Transfer
We have tie up with Eleven Banks for online fund transferring i.e. HDFC, IDBI, CITI, UBI,
OBC, INDSLANDAND and UTI BANK, Yes bank, Bank of India for Online Money Transfer.

Research based investment advice

Investment and trading services

Trading and seminars

Technology based investment tools

Integrated demat facility

CUSTOMER CAN TRADE IN

o Equities

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o Derivatives
o Commodities

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SWOT ANALYSIS OF SHAREKHAN

(My observation)
STRENGTHS
1. Big client base
2. In-house research house
3. online as well as offline trading
4. Online IPO/ MF services
5. Share shops
6. Transparent
7. User friendly tie ups with 10 banks
8. Excellent order execution speed and reliability

WEAKNESS
1. Lack of awareness among customer
2. Less focus on customer retention
3. Less Exposure

OPPORTUNITIES
1. Diversification
2. Product modification
3. Improve Web based trading
4. Provide competitive brokerage
5. Concentrate on PMS
6. Focus on Institutional investors
7. Concentrate on HNIs (high net worth investor)
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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.
3. Stock market is very volatile, risk involves is very high.

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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.
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
33 | P a g e

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.

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.

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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.
When advising clients about investment decisions, financial advisors have to consider both their
financial goals and financial risk tolerance. In many cases these two could conflict, leading
advisors to recommend that individuals take on more risk than they are comfortable with to meet
their financial goals. Bemasek and Shwiff (2001) report that individuals generally tend to
increase the level of risk of their retirement savings after they have consulted a financial advisor.
Furthermore, this increase was found to be statistically significant for both the respondent and
the spouse or partner consulting a financial advisor, possibly suggesting the existence of a
relationship between gender and marital status as well.
In contrast to the earlier finding. Van de Venter and Michayluk (2007) find no statistically
significant effect on financial risk tolerance when a financial advisor is consulted. When
examining whether a financial advisor has any impact on investment behavior. Hung and Yoong
(2009) conclude that unless financial guidance is actively sought by the individual, consulting a
financial advisor has no impact on investment behavior. This finding highlights the difficulty
when interpreting survey questions that encompass financial advisors, and whether their advice
is undertaken.

Finally, Grable (2000) reports that individuals with positive economic expectations have higher
financial risk tolerance scores than those with less positive expectations, with Van de Venter and
Michayluk (2007) also finding evidence that financial risk tolerance is positively related to both
future expectations and previous investment performance. These previous findings identify many
factors that might influence risk tolerance on their own or in combination with others.

35 | P a g e

36 | P a g e

37 | P a g e

OBJECTIVES OF THE STUDY

1. To understand the risk profile of investors.
2. To study risk bearing capacity on the basis of gender, education, occupation, age, family
income and number of dependents.

38 | P a g e

39 | P a g e

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
Survey method was adopted for this 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.

40 | P a g e

SAMPLING DESIGN:
Definition of population: All the customers of share khan.
Sampling procedure: A non probability sampling technique i.e. convenient sampling procedure
was adopted.
Sampling size: A sample of 96 customers was selected from the target population for the study.

RESEARCH METHODOLOGY:
Research design

: descriptive in nature.

Data source

: data collected from primary and secondary sources.

Primary data

: primary data is collected from the respondent through

these structured questionnaires.

SAMPLING DESIGN:
Sample size

: 96

Sampling procedure

: Convenience sampling

Statistical tool

: Percentage method, mean, chi-square test.

STATISCAL TOOLS:
For the purpose of analysis, Mean and percentage methods are used for the calculation
and the result was interpreted. This test was used to minimize the error of the data collected.

41 | P a g e

STATISTICAL TOOLS USED:

Sample tools are used for analyze purpose, they are follows:
1. Cross tab method
2. Chi square test
3. Phi and Cramer V test

Null hypothesis (HO) states: the two attributes are independent of each other.
Alternative hypothesis (HI) states: the two attributes are dependent of each other.

42 | P a g e

43 | P a g e

1. To understand the risk profile of investors

Q9.

What do you expect when you invest ?

CHART-1

RISK
45
40
35
30
25
20
15
Axis Title 10
5
0

44 | P a g e

Interpretation:- This chart-1 shows, out of 96 respondents 40 people are ready to bear nominal
risk and 36 people dont 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.

Q10

. How long do you normally hold investment?

CHART -2

TIME PERIOD
35
30
25
20
15
Axis Title 10
5
0

45 | P a g e

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.

46 | P a g e

Q11.
If your investments were to fall in value by 15 per cent over a one-year period,
you will
Chart -3

INVESTMENT FALL BY 15%

30
25
20
Axis Title

15
10
5
0
WITHDRAW ALL MONEY FROM SHARE MARKET

.
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.

47 | P a g e

Q12.

You are ready for limited losses in expectation of higher long-term returns?

Chart-4

LIMITED LOSSES IN EXPECTATION OF HIGHER RETURNS

40
35
30
25
20
15
10
5
0
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.

48 | P a g e

Q.13. I am willing to experience the ups and downs of the market for the potential of
greater returns.
Chart-5

EXPERIENCE UPS AND DOWNS OF MARKET

45
40
35
30
25
20
15
10
5
0
Axis Title

Interpretation:- Chart-5 is about that whether investors are ready to experience ups and downs
of market we find that only around 16% investors are not agree for this but around 84% are
considering the idea i.e. most of the respondents are aware about the ups & downs of stock
market & want to experience that.

49 | P a g e

Q14. My main concern is security; keeping money safe is more important than earning
high returns.
Chart-6

MAIN CONCERN IS SAFETY

40
35
30
25
20
15
10
5
0
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.

50 | P a g e

Q15.
Chart-7

I am fairly experienced in investment.

FAIRLY EXPERIENCED IN INVESTMENT

50
45
40
35
30
25
20
15
10
5
0
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 & dont bear losses.

51 | P a g e

Q16. I am very secure related to my future income (such as from salary, pension or other
investments)?
Chart-8

SECURE RELATED TO FUTURE INCOME

60
50
40
30
20
10
0
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.

52 | P a g e

2. To study risk bearing capacity on the basis of gender, education, occupation,

age, family income and number of dependents
To fulfill this objective I used cross tabs & chi-square test
The results are compiled in a sheet which shows the significance value & chi- square values of
all the cross tabs. Here I am providing 2 null hypothesis & 2 alternative hypothesis conditions as
sample.

Sample- Null Hypothesis

Gender in respect of expectation from an investment
X1 * X9 Crosstabulation
Count
X9
NO RISK

NOMINAL RISK

Total
MODERATE

HIGHER RISK

RISK
X1

MALE
FEMALE

Total

27

29

13

71

11

25

36

40

18

96

Chi-Square Tests
Value

Df

Asymp. Sig. (2-sided)

Pearson Chi-Square

.797a

.850

Likelihood Ratio

1.299

.729

.011

.917

Linear-by-Linear Association
N of Valid Cases

96

a. 3 cells (37.5%) have expected count less than 5. The minimum expected count is .52.

Interpretation: - As the chi-square shows the value of P is higher than .05, we will accept null
hypothesis i.e. there is no significant relationship in between the expectation from investment
with change in gender. Males and females are equally risk averse & conservative related to
taking risk in stock market.
53 | P a g e

Gender in respect of holding time of investment

X1 * X10 Crosstabulation
Count
X10
DAY
X1

MALE
FEMALE

Total

WEEK

Total
MONTH

YEAR

15

19

13

24

71

25

22

25

18

31

96

Chi-Square Tests
Value

Df

Asymp. Sig. (2-sided)

.656a

.883

Likelihood Ratio

.647

.886

Linear-by-Linear Association

.384

.536

Pearson Chi-Square

N of Valid Cases

96

a. 1 cells (12.5%) have expected count less than 5. The minimum expected count is 4.69.

Interpretation :- As the chi-square shows the value of P is higher than .05, we will accept null
hypothesis i.e. there is no significant relationship in between the investment holding with change
in gender. Males and females are equally risk averse & conservative in holding the investment.

54 | P a g e

Sample- Alternate Hypothesis

Family income in respect of risk bearing capacity
X7 * X9 Crosstabulation
Count
X9

X7

Total

NO

NOMINAL

MODERATE

HIGHER

RISK

RISK

RISK

RISK

< 5LAKH

21

17

43

5-15 LAKH

15

23

10

49

36

40

18

96

15-25
LAKH
Total

Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear Association
N of Valid Cases

df

Asymp. Sig. (2-sided)

21.932a

.001

18.359

.005

9.013

.003

96

a. 6 cells (50.0%) have expected count less than 5. The minimum expected count is .08.

Interpretation :-As the chi-square shows the value of P is higher than .05, we will accept
alternative hypothesis i.e. there is a significant relationship in between the expectation from
investment with change in family income. Investors are balanced & aggressive related to taking
risk in stock market.

55 | P a g e

X4 * X10 Crosstabulation
Count
X10
DAY
X4

UNDER GRADUATE

WEEK

Total
MONTH

YEAR

10

15

14

15

17

51

POST GRADUATE

26

PH.D.

22

25

18

31

96

GRADUATE

Total

Education in respect of holding time period for investment

Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear Association
N of Valid Cases

Df

Asymp. Sig. (2-sided)

20.330a

.016

22.004

.009

6.992

.008

96

a. 9 cells (56.3%) have expected count less than 5. The minimum expected count is .75.

Interpretation :- As the chi-square shows the value of P is higher than .05, we will accept null
hypothesis i.e. there is a significant relationship in between the investment holding with change
in education. Investors are risk averse & conservative related to holding the investment.
As from the above crosstabs the table- 1 is drawn in reference with the chi- square values and the
significance values on different parameters and fills the box with yellow color who gives the best
alternative hypothesis value. Then after interpret that value which is come under that yellow box
and show their cross tabs.

56 | P a g e

TABLE-1
S.No
.

QUESTIONS

GENDER

OCCUPATION

AGE

EDUCATION

Pearson
chi-square

Significa
nce

Pearson
chisquare

Signific
ance

Pearson
chisquare

signifi
cance

Pearson
chisquare

Significance

What do you expect

when you invest?

0.797

0.85

9.131

0.425

8.871

0.44
9

8.854

0.451

How long do you

normally hold
investments?

0.656

0.883

5.669

0.773

4.203

0.89
8

20.33
0

0.016

If your investments
were to fall in value by
15 per cent over a oneyear period, you will

6.934

0.139

13.70
7

0.32

16.94
3

0.15
2

11.25
3

0.507

You are ready

for limited losses in
expectation of higher
long-term returns?

6.266

0.18

17.36
1

0.137

9.682

0.64
4

28.13
3

0.005

I am willing to
experience the ups and
downs of the market
for the potential of
greater returns.

3.639

0.457

7.389

0.831

14.93
4

0.24
5

10.85
5

0.541

My main concern is
security; keeping
money safe is more
important than earning
high returns.

2.453

0.653

13.08
3

0.363

9.164

0.68
9

9.537

0.657

I am fairly experienced
in investment.

0.570

0.966

7.997

0.785

16.54
7

0.16
7

11.66
5

0.473

I am very secure
related to my
future income (such as
from salary, pension or
other investments)?

2.561

0.634

9.092

0.695

5.942

0.91
9

3.830

0.986

57 | P a g e

S.No
.

QUESTIONS

INCOME

No. of
dependents in
Family

FAMILY
INCOME

PERCENTAGE OF
TOTAL
INVESTMENT

Pearson
chi-square

Significa
nce

Pearson
chisquare

Signific
ance

Pearson
chisquare

signifi
cance

Pearson
chisquare

Significance

12.718

0.176

10.88
0

0.539

21.93
2

0.00
1

11.36
0

0.078

7.112

0.625

10.01
5

0.615

5.675

0.46
1

10.96
6

0.089

What do you expect

when you invest?

How long do you

normally hold
investments?

If your investments
were to fall in value by
15 per cent over a oneyear period, you will

11.086

0.522

12.44
8

0.713

7.197

0.51
6

7.471

0.487

You are ready

for limited losses in
expectation of higher
long-term returns?

21.667

0.041

26.94
8

0.04
2

21.37
1

0.00
6

15.92
0

0.044

I am willing to
experience the ups and
downs of the market
for the potential of
greater returns.

9.029

0.7

16.91
5

0.391

5.955

0.65
2

2.999

0.934

My main concern is
security; keeping
money safe is more
important than earning
high returns.

10.156

0.602

23.01
3

0.113

4.279

0.83
1

10.89
9

0.207

I am fairly experienced
in investment.

9.603

0.651

22.60
5

0.125

5.714

0.67
9

7.066

0.529

I am very secure
related to my
future income (such as
from salary, pension or
other investments)?

7.621

0.814

22.07
3

0.141

6.356

0.60
7

3.412

0.906

58 | P a g e

59 | P a g e

Expectation of risk from an investment

From the Table-1 we can see that the all respondents views are indifferent in terms of
expectation of risk from investment irrespective of their gender, occupation, age, education,
income, No. of dependent in the family and the percentage of total income they invest as most of
the respondents wish to tale either no risk or nominal risk. This defines the conservatism related
to risk profile of the respondents. But on the basis of Family income it shows a significant
relationship as p-value is less than .05, which suggests accepting alternate hypothesis. The
relationship is defined as follows:
Table-2
Family income in respect of expectation of risk from an investment
X7 * X9 Crosstabulation
Count
X9

X7

Total

NO

NOMINAL

MODERATE

HIGHER

RISK

RISK

RISK

RISK

< 5LAKH

21

17

43

5-15 LAKH

15

23

10

49

36

40

18

96

15-25
LAKH
Total

Family income in respect of expectation of risk

NO RISK

NOMINAL RISK

MODERATE RISK

HIGHER RISK
100%

49%

47%

40%

31%
9%

< 5LAKH

60 | P a g e

20%

2%

2%
5-15 LAKH

0%15-25
0% LAKH0%

Chi-Square Tests
Value

Df

Asymp. Sig.
(2-sided)

.001

Likelihood Ratio

18.359

.005

Linear-by-Linear

9.013

.003

Pearson Chi-Square

21.932

Association
N of Valid Cases

96

a. 6 cells (50.0%) have expected count less than 5. The minimum

expected count is .08.

Symmetric Measures
Value

Approx.
Sig.

Nominal by Nominal

N of Valid Cases

Phi

.478

.001

Cramer's V

.338

.001

96

Here from Table -2, it is clear that all the respondents belong to the family income group of < 5
Lakh and 5-15 Lakh are willing to take only nominal or no risk. In this situation as the income
level increases the risk taking ability is shifted towards the bearing the more risk.
This chart shows that most of the respondents lie in the income level group of <5 lakh want to go
for no risk situation but as the income level increases to 5-15 lakh people get shifted from no risk
to nominal risk situation. In the chart it is shown that out of 43 respondents who lies between the
income level group of<5lakh around 50% respondents do not want any risk in their investments.
are go for no risk and only 2% are going for high risk investments. Out of 49 respondents who
lies in between income group of 5-15 lakh 46% are go for moderate risk ,30% are for no risk . So
it defines that there is direct relationship between income and risk bearing capacity of persons.

61 | P a g e

People belong to the income group of 15-25 Lakh as are more towards taking moderate risk. But
the strength of relationship is very low as the value of Cramers V is .338.

Investment holding
From the Table-1 we can see that the all respondents views are indifferent in terms of
expectation of risk from investment irrespective of their gender, occupation, age, education,
income, No. of dependent in the family and the percentage of total income they invest as most of
the respondents wish to hold investments either for a week or for a year. This defines the
conservatism related to risk profile of the respondents. But on the basis of Education it shows a
significant relationship as p-value is less than .05, which suggests accepting alternate hypothesis.
The relationship is defined as follows:
Table-3
Education in respect of their investment holding
X4 * X10 Crosstabulation
Count
X10
DAY
X4

UNDER GRADUATE

WEEK

Total
MONTH

YEAR

10

15

14

15

17

51

POST GRADUATE

26

PH.D.

22

25

18

31

96

GRADUATE

Total

62 | P a g e

Education in respect of investment holdings

80%
67%

70%
60%
50%
40%

27%29%

30%

7% 7%

MONTH

27%
23%

25%

YEAR

25%

15%

10%

0%
UNDER GRADUATE

WEEK

35%

33%

20%

20%
10%

DAY

50%

GRADUATE

PH.D. 0%

POST GRADUATE

Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear Association
N of Valid Cases

Df

Asymp. Sig. (2-sided)

20.330a

.016

22.004

.009

6.992

.008

96

a. 9 cells (56.3%) have expected count less than 5. The minimum expected count is .75.

Symmetric Measures
Value
Nominal by Nominal

N of Valid Cases

Approx. Sig.

Phi

.460

.016

Cramer's V

.266

.016

96

Here from Table -3, it is clear that all the respondents belong to the education group of graduates
are willing to hold investments for a week or for a year.
This chart shows that most of the respondents lie in the education level group of graduate wants
to go for week or a year trading but as the education level increases to post graduates people get
diversify their investment holding period. In the chart it is shown that out of 51 respondents who
lies between the education level group of graduates around 33% respondents go for a year based
63 | P a g e

investment holding. And only 7% are going for a day investment holding. Out of 26 respondents
who lies in between education group of post graduates 35% are go for month investment holding,
15% are for year investment holding. So it defines that there is direct relationship between
education and investment holding tenure.
People belong to the education group of graduates are more towards the holding investment for a
week or a year . But the strength of relationship is very low as the value of Cramers V is .266.

64 | P a g e

Limited losses in expectation of higher long term returns

From the Table-1 we can see that the all respondents views are indifferent in terms of bearing
limited losses in the expectation of higher long term returns irrespective of their gender,
occupation, age, education, income, No. of dependent in the family and the percentage of total
income they invest as most of the respondents wish to tale either agree or neither agree or
disagree in respect of bearing losses in expectation of higher long term returns. This defines the
balanced approach related to risk profile of the respondents. But on the basis of Education it
shows a significant relationship as p-value is less than .05, which suggests accepting alternate
hypothesis. The relationship is defined as follows:
Table-4 ( Education in respect of bearing limited losses in expectation of higher long term
returns)
X4 * X12 Crosstabulation
Count
X12

Total

STRONGLY

DISAGRE

NEITHER

AGREE

DISAGREE

AGREE NOR

STRONGLY
AGREE

DISAGREE
X4

UNDER

15

GRADUATE

17

17

51

POST GRADUATE

15

26

PH.D.

14

16

24

36

96

GRADUATE

Total

65 | P a g e

80%

75%

70%
58%

60%
47%

50%

40%
33%33% AGREE NOR DISAGREE
STRONGLY DISAGREE
DISAGREE
NEITHER
AGREE
30%
20%
16%16%
15%
20%
13% 13%
12%
12%
7%
10%
4%
2%
0%
UNDER GRADUATE

GRADUATE

POST GRADUATE

STRONGLY AGREE
25%

0% 0%PH.D.

0%

Chi-Square Tests
Value

df

Asymp. Sig.
(2-sided)

12

.005

Likelihood Ratio

29.565

12

.003

Linear-by-Linear

10.020

.002

Pearson Chi-Square

28.133

Association
N of Valid Cases

96

a. 13 cells (65.0%) have expected count less than 5. The minimum

expected count is .25.

Symmetric Measures
Value

Approx.
Sig.

Nominal by Nominal

N of Valid Cases

Phi

.541

.005

Cramer's V

.313

.005

96

Here from Table -4, it is clear that all the respondents belong to the education group of
graduate are willing to take limited losses in expectation of higher returns.

66 | P a g e

This chart shows that most of the respondents lie in the education level group of graduate and
under graduates wants to bear limited losses in expectation of higher returns but as the education
level decreases to under graduates people is more concern about bearing limited losses in
expectation of higher returns. In the chart it is shown that out of 51 respondents who lies between
the education level group of graduates around 33% respondents are agree with bearing limited
losses in expectation of higher returns . And only 13% are not agree with it. Out of 26
respondents who lies in between education group of post graduates 58% are agree, 12% are
strongly agree with it. So it defines that there is direct relationship between education and
bearing limited losses in expectation of higher returns.
People belong to the education group of graduates as are more towards in taking the limited
losses in expectation of higher returns. But the strength of relationship is very low as the value of
Cramers V is .313.

67 | P a g e

Income in respect of limited losses in expectation of higher long term

returns
From the Table-1 we can see that the all respondents views are indifferent in terms of bearing
limited losses in the expectation of higher long term returns irrespective of their gender,
occupation, age, education, income, No. of dependent in the family and the percentage of total
income they invest as most of the respondents wish to tale either agree or neither agree or
disagree in respect of bearing losses in expectation of higher long term returns. This defines the
balanced approach related to risk profile of the respondents. But on the basis of income it shows
a significant relationship as p-value is less than .05, which suggests accepting alternate
hypothesis. The relationship is defined as follows:
Table -5

Income in respect of limited losses in expectation of higher long term returns

X5 * X12 Crosstabulation

Count
X12

Total

STRONGLY

DISAGRE

NEITHER

AGREE

DISAGREE

AGREE NOR

STRONGLY
AGREE

DISAGREE
X5

< 3 LAKH

10

13

36

3-5 LAKH

10

13

41

5-10 LAKH

10

18

10-20

14

16

24

36

96

LAKH
Total

68 | P a g e

120%
100%

100%
80%
60%
STRONGLY DISAGREE
40%
20%

56%
NEITHER AGREE NOR DISAGREE

DISAGREE

36%
28%
19%
11%
6%

32%
24%
22%
17%

17%

STRONGLY AGREE

22%
6%

5%

0%
< 3 LAKH

AGREE

0% LAKH
5-10

3-5 LAKH

0%10-20
0% 0%
0%
LAKH

Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear Association

Df

Asymp. Sig. (2-sided)

21.667a

12

.041

14.983

12

.242

.978

.323

N of Valid Cases

96

a. 11 cells (55.0%) have expected count less than 5. The minimum expected count is .06.

Symmetric Measures
Value

Approx.
Sig.

Nominal by Nominal

N of Valid Cases

Phi

.475

.041

Cramer's V

.274

.041

96

Here from Table -5, it is clear that all the respondents belong to the income group of <3 lakh
and 3-5 lakh are willing to take limited losses in expectation of higher returns.

69 | P a g e

This chart shows that most of the respondents lie in the income level group of <3 lakh are agree
for taking limited losses in expectation of higher returns but as the income level increases to 1020 lakh more people get shifted towards agree for taking limited losses in expectation of higher
returns. In the chart it is shown that out of 41 respondents who lies between the income level
group of 3-5lakh around 32% respondents are agree in taking limited losses in expectation of
higher returns. and only 2% are strongly agree with it.But if the income increases to 10-20 lakh
most of the persons are move towards strongly agree situation. So it defines that there is direct
relationship between income and limited losses in expectation of higher returns.
People belong to the income group of <3 lakh and 3-5 lakh as are more towards in taking the
limited losses in expectation of higher returns. But the strength of relationship is very low as the
value of Cramers V is .274.
TABLE-6
(No. of dependents in family in respectof limited losses in expectation of
higher long term returns)
X6 * X12 Crosstabulation
Count
X12

Total

STRONGLY

DISAGRE

NEITHER

AGREE

DISAGREE

AGREE NOR

STRONGLY
AGREE

DISAGREE
X6

NO

1-2

13

3-4

18

19

51

5-7

11

24

>7

14

16

24

36

96

DEPENDENT

Total

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80%
70%

67%
60%

60%
50%

46%

40%
STRONGLY DISAGREE

38%
37%
35%NOR DISAGREE
DISAGREE NEITHER AGREE

AGREE STRONGLY33%
AGREE

30%
20%

20%

20%

8%

10%
0%

23% 23%

8%

21%
17%
13%

14%
10%

4%

4%
0%0%
NO DEPENDENT

1 to2

3 to4

0%

5 to7

0%
>70%

Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear Association
N of Valid Cases

Df

Asymp. Sig. (2-sided)

26.948a

16

.042

25.934

16

.055

.233

.629

96

a. 19 cells (76.0%) have expected count less than 5. The minimum expected count is .19.

Symmetric Measures
Value
Nominal by Nominal

N of Valid Cases

Approx. Sig.

Phi

.530

.042

Cramer's V

.265

.042

96

Here from Table -6, it is clear that all the respondents belong to the no. of dependents group of
3-4 and 5-7 members are willing to take limited losses in expectation of higher returns.
71 | P a g e

This chart shows that most of the respondents lie in the No. of dependents level group of 3-4 are
agree for taking limited losses in expectation of higher returns but as the No. of dependents
level increases to >7 more people get shifted towards disagree for taking limited losses in
expectation of higher returns. In the chart it is shown that out of 51 respondents who lies between
the No. of dependents level group of 3-4 around 37% respondents are agree in taking limited
losses in expectation of higher returns. and only 4% are strongly agree with it. But if the No. of
dependents increases to >7 most of the persons are move towards disagree situation. So it defines
that there is direct relationship between income and limited losses in expectation of higher
returns.
People belong to the income group of 3 -4 and 5-7 members as are more towards in taking the
limited losses in expectation of higher returns. But the strength of relationship is very low as the
value of Cramers V is .265.

72 | P a g e

Family income in respect of limited losses in expectation of higher

long term returns
From the Table-1 we can see that the all respondents views are indifferent in terms of bearing
limited losses in the expectation of higher long term returns irrespective of their gender,
occupation, age, education, income, No. of dependent in the family and the percentage of total
income they invest as most of the respondents wish to tale either agree or neither agree or
disagree in respect of bearing losses in expectation of higher long term returns. This defines the
balanced approach related to risk profile of the respondents. But on the basis of family income it
shows a significant relationship as p-value is less than .05, which suggests accepting alternate
hypothesis. The relationship is defined as follows:
TABLE-7

( Family income in respect of limited losses in expectation of higher long term

returns)
X7 * X12 Crosstabulation
Count
X12

Total

STRONGLY

DISAGRE

NEITHER

AGREE

DISAGREE

AGREE NOR

STRONGLY
AGREE

DISAGREE
X7

< 5LAKH

11

12

12

43

5-15 LAKH

12

23

49

15-25

14

16

24

36

96

LAKH
Total

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Family income in respect of limited losses in expectation of higher long term returns
60%
50%

50%

47%

40%
STRONGLY DISAGREE DISAGREE
28% 28%
30%
26%
20%

NEITHER AGREE NOR DISAGREE

AGREE

STRONGLY AGREE

25%

24%

25%

16%

14%

10%

8%

5%

4%

0%
< 5LAKH

0% 15-25
0%LAKH

5-15 LAKH

Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear Association
N of Valid Cases

Df

Asymp. Sig. (2-sided)

21.371a

.006

15.805

.045

3.687

.055

96

a. 7 cells (46.7%) have expected count less than 5. The minimum expected count is .25.

Symmetric Measures
Value
Nominal by Nominal

N of Valid Cases

74 | P a g e

Approx. Sig.

Phi

.472

.006

Cramer's V

.334

.006

96

Here from Table -7, it is clear that all the respondents belong to the family income group of < 5
Lakh and 5-15 Lakh are willing to take limited losses in expectation of higher returns.
This chart shows that most of the respondents lie in the family income group of 5-15 lakh are
agree for taking limited losses in expectation of higher returns but as the family income level
increases to 15-25 lakh no. of people are decreases towards disagree for taking limited losses in
expectation of higher returns. In the chart it is shown that out of 49 respondents who lies between
the family income level group of 5-15 lakh around 47% respondents are agree in taking limited
losses in expectation of higher returns. and only 16% are strongly disagree with it. But if the
family income increases to 15-25 lakh no. of the persons are decreased in disagree situation. So it
defines that there is direct relationship between income and limited losses in expectation of
higher returns.
People belong to the income group of <5 lakh and 5-15 lakh as are more towards in taking the
limited losses in expectation of higher returns. But the strength of relationship is very low as the
value of Cramers V is .334.

75 | P a g e

Percentage of total investment in respect of limited losses in

expectation of long term returns
From the Table-1 we can see that the all respondents views are indifferent in terms of bearing
limited losses in the expectation of higher long term returns irrespective of their gender,
occupation, age, education, income, No. of dependent in the family and the percentage of total
income they invest as most of the respondents wish to take either agree or neither agree or
disagree in respect of bearing losses in expectation of higher long term returns. This defines the
balanced approach related to risk profile of the respondents. But on the basis of percentage of
total investment it shows a significant relationship as p-value is less than .05, which suggests
accepting alternate hypothesis. The relationship is defined as follows:
TABLE -8
(Percentage of total investment in respect of limited losses in expectation of
long term returns)
X8 * X12 Crosstabulation
Count
X12

Total

STRONGLY

DISAGRE

NEITHER

AGREE

DISAGREE

AGREE NOR

STRONGLY
AGREE

DISAGREE
X8

BELOW

11

20

14

53

20%-40%

21

42

40%-60%

14

16

24

36

96

20%

Total

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Percentage of total investment in respect of limited losses in expectation of long term returns
120%
100%

100%

80%
STRONGLY DISAGREE DISAGREE NEITHER AGREE NOR DISAGREE AGREE STRONGLY AGREE
60%
50%
40%
20%

38%
26%
21%
11%

19%
12%10%

4%

10%

0%
BELOW 20%

0% 0%
0%
0%
40%-60%

20%-40%

Chi-Square Tests
Value
Pearson Chi-Square
Likelihood Ratio
Linear-by-Linear Association
N of Valid Cases

df

Asymp. Sig. (2-sided)

15.920a

.044

17.029

.030

1.860

.173

96

a. 7 cells (46.7%) have expected count less than 5. The minimum expected count is .06.

Symmetric Measures
Value
Nominal by Nominal

N of Valid Cases

Approx. Sig.

Phi

.407

.044

Cramer's V

.288

.044

96

Here from Table -8, it is clear that all the respondents belong to the percentage of total income in
investment group of < 20% and 20%-40% are willing to take limited losses in expectation of
higher returns.
This chart shows that most of the respondents lie in the percentage of total investment group of
below 20% are neither agree or disagree for taking limited losses in expectation of higher returns
but as the percentage of total investment level increases to 40%-60% no. of people are increases
77 | P a g e

towards agree for taking limited losses in expectation of higher returns. In the chart it is shown
that out of 52 respondents who lies between percentage of total investment level group of below
20% around 38%respondents are neither agree or disagree in taking limited losses in expectation
of higher returns and only 26% are agree with it. But if the percentage of total investment
increases to 40%-60% no. of the persons is increased in agree situation. So it defines that there is
direct relationship between income and limited losses in expectation of higher returns.
People belong to the income group of <20% and 20%-40% as are more towards in taking the
limited losses in expectation of higher returns. But the strength of relationship is very low as the
value of Cramers V is .288.
.

78 | P a g e

79 | P a g e

FINDINGS AND CONCLUSIONS: Most of the respondents are ready to take either no risk or nominal risk while doing the
investment.
Most of the respondents are generally go for longer time horizon.
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 helps in describing the risk profile of investors.
This study describes the strong relationship between demographic data in respect of
different parameters.

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BIBLOGRAPHY: www.google.com
www.wikipedia.com
www.ebscohost.com
www.sharekhan.com
Financial derivatives and risk management by L.C.GUPTA

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QUETIONAIRE
Investment Pattern on the basis of Risk profile of Investors
I am a final year student currently pursuing my Post Graduate Diploma in Management (PGDM)
at I.T.S-Institute of Management, Greater Noida. I am conducting a research study on An
analysis on investor behavior on various investment avenues. This research (project) is taken as
a partial requirement for the completion of my PGDM. I seek your kind assistance in completing
the attached questionnaire which would take few minutes from your valuable time. Your
responses will be treated as Strictly Confidential.

Personal Information
1. Gender
a) Male
b) Female
2. Occupation
i) Businessii) Service
iii) Students
iv) House wife
3. Age
i) 20-30
ii) 30-40
iii) 40-50
iv) Above 50
4. Education
i) Under Graduate
ii) Graduate
iii) Post Graduate
iv) Ph. D.
5. Income
a) < 3 Lakh
b) 3-5 Lakh c) 5-10 lakh d) 10-20 Lakh e) > 20 Lakh
6. No. of dependents in Family
a) No dependent
b) 1-2
c) 3-4
d) 5-7
e) >7
7. Family Income
a) <5 Lakh
b) 5-15 lakh
c) 15-25 Lakh
d) > 25 Lakh
8.
How much percentage of total income he/she invests?
a) Below 20% b) 20 % - 40 %
c) 40 % - 60%
d) > 60 %
The risk-profile questionnaire
1.
What do you expect when you invest?
a) no risk
b) nominal risk
c) moderate risk
d) higher risk
2.
How long do you normally hold investments?
a) For a day
b) For a week
c) For a month
d) For a year
82 | P a g e

3.

4.

5.

6.

7.

8.

If your investments were to fall in value by 15 per cent over a one-year period, you
will
a) withdraw all money from share market
b) Take out some money and move it to a safer investment.
c) Wait until market recovers the loss and then consider other investments.
d) Stick to the investment.
e) Invest more money in the same investment as it is 15 per cent cheaper
You are ready for limited losses in expectation of higher long-term returns?
a) Strongly disagree
b) Disagree
c) Neither agree nor disagree
d) Agree
e) strongly agree
I am willing to experience the ups and downs of the market for the potential of
greater returns.
a) Strongly disagree
b) Disagree
c) Neither agree nor disagree
d) Agree
e) Strongly agree
My main concern is security; keeping money safe is more important than earning
high returns.
a) Strongly disagree.
b) Disagree.
c) Neither agree nor disagree.
d) Agree.
e) Strongly agree.
I am fairly experienced in investment.
a) Strongly disagree.
b) Disagree.
c) Neither agree nor disagree.
d) Agree.
e) Strongly agree.
I am very secure related to my future income (such as from salary, pension or other
investments)?
a) Strongly disagree.
b) Disagree.
c) Neither agree nor disagree.
d) Agree.
e) Strongly agree.

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