SYNOPSIS ON ANALYSIS OF PORTFOLIO INVESTMENT

Dissertation submitted in partial fulfillment of the requirements for the award of the degree of

Master of Business Administration Of Bangalore University By PRASAD HM (REG NO. 11SLCMA097) UNDER THE GUIDENCE OF MS.ARPANA.D

THE OXFORD COLLEGE OF BUSINESS MANAGEMENT 4th SECTOR H.S.R LAYOUT BANGALORE - 560102. 2011-13

Title of The study:

PORTFOLIO ANALYSIS

Introduction To the study:

In financial terms, 'portfolio analysis' is a study of the performance of specifies portfolios under different circumstances. It includes the efforts made to achieve the best trade-off between risk tolerance and returns. The analysis of a portfolio can be conducted either by a professional or an individual investor who may utilizes specialized software. Portfolio analysis involves quantifying the operational and financial impact of the portfolio. It is vital to evaluate the performances of investments and timing the returns effectively. The analysis of a portfolio extends to all classes of investments such as bonds, equities, indexes, commodities, funds, options and securities. Portfolio analysis gains importance because each asset class has peculiar risk factors and returns associated with it. Hence, the composition of a portfolio affects the rate of return of the overall investment.

Statement of the problem:

The study titled ANALYSIS OF PORTFOLIO INVESTMENT is broadly carried out for each asset at two levels: Risk aversion: This method analyzes the portfolio composition while considering the risk appetite of an investor. Some investors may prefer to play safe and accept low profits rather than invest in risky assets that can generate high returns. Analyzing returns: While performing portfolio analysis, prospective returns are calculated through the average and compound return methods. An average return is simply the arithmetic average of returns from individual assets. However, compound return is the arithmetic mean that considers the cumulative effect on overall returns. The Research Study titled ANALYSIS OF PORTFOLIO INVESTMENT is

an attempt to analyze how closely the securities belonging to Banking and IT sectors move with its benchmark index. The study aims to understand the relationship between the chosen security and the benchmark index, i.e. S&P, NIFTY. Active fund managers are expected to reward risk optimized returns to their investors, selecting a security which is less volatile is preferred by most of the investors ensure consistent returns. Hence this research study would set very important criteria to the investor to choose securities to be included in his portfolio.

Objectives of the study:

This research topic has been undertaken to meet the following specific objectives:
To compare the security returns with the market returns using various

statistical tools.
To test the volatility (Beta) of each individual security.

To test the significance of market over individual companies using F-test. To suggest guidelines for the investors based on the analysis consensus.

Scope of the study:

The study covers two important sectors namely IT, and banking with The study covers a period of twelve months, i.e. from 1st March 2011 The study takes into consideration the weekly closing returns of each

three securities chosen from each sector. to 29sth Feb 2012. security for the year 2011-12 for the purpose of analysis.

Limitations of the study:

The study confines itself only to two sectors of the economy. Hence other

important sectors are excluded.

 The study covers a period of only one year which is relatively a short duration.
Small sample size since only two and three companies respectively in IT and

Banking sectors is considered for analysis. Analysis is based on one main parameter i.e returns of the securities.

Research Design: The data is collected through the primary and secondary sources. The data will be analysed with the help of relevant statistical tools.

PRIMARY DATA The primary data was collected through detailed discussions with the company officials and a few random customers who visited the office. The method adopted for data collection was mainly through clients about their portfolio decisions and the basis on which they decide to invest in various stocks. SECONDARY DATA Secondary data was collected by referring the following sources: SHAREKHANS publication: Value guide magazine Company Website NSE Website Textbooks, journals and the Company brochures

Chapter scheme: Chapter 1: Introduction The study will equip the readers, who are not well versed with the area, to understand the report. It includes different area considered under study. Chapter 2: Research design The report will provide a plan of the study that includes statements of the problem, need for study, review of previous studies, objectives, scope of the study, hypothesis, operational definition of concepts, methodology, and limitations of the study and an overview of the chapter scheme. Chapter 3: Analysis and Interpretation of Data. The chapter will include analysis and interpretation of data and information will be provided by appropriate means of table, graphs and charts wherever necessary followed by the references. Chapter 4: Summary of Findings, Conclusions and Suggestions. The study will provide a summary of findings that will be compiled from the inferences drawn through the analysis of data. Conclusions and recommendations will be provided on the basis findings. BIBLIOGRAPHY: This chapter deals with the list of various books, articles, websites that are referred and used in the research on Technical analysis.
www.wikipedia.com

 www.google.com www.finance.yahoo.com

ANNEXURE: This chapter includes the data used for the calculations supporting interpretation etc.