Shylaja.

B C16MB5260019

GITAM
UNIVERSITY
(Estd. u/s 3 of the UGC Act, 1956)

Centre for Distance Learning

Note: The candidates have to clear tuition fee dues, if any, to the CDL. Otherwise, their
Project proposal will not be processed.

MBA PROGRAMME: SYNOPSIS

I. Student Details

Name SHYLAJA.B

University Roll Number C16MB5260019

Name of program MBA

Specialization FINANCE

II. Project Synopsis Details

TITLE - “A STUDY ON INVESTER’S PERCEPTION TOWARDS

FINANCIAL DERIVATIVES”

1. PROBLEM STATEMENT:-

The emergence of the market for derivative products, most notably forwards, futures

and options, can be traced back to the willingness of risk-averse economic agents to

guard themselves against uncertainties arising out of fluctuations in asset prices. By

their very nature, the financial markets are marked by a very high degree of

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volatility. Through the use of derivative products, it is possible to partially or fully

transfer price risks by locking-in asset prices. As instruments of risk management,

these generally do not influence the fluctuations in the underlying asset prices.

However, by locking-in asset prices, derivative products minimize the impact of

fluctuations in asset prices on the profitability and cash flow situation of risk-averse

investors.

Derivative products initially emerged, as hedging devices against fluctuations in

commodity prices and commodity-linked derivatives remained the sole form of such

products for almost three hundred years. The financial derivatives came into

spotlight in post-1970 period due to growing instability in the financial markets.

However, since their emergence, these products have become very popular and by

1990s, they accounted for about two-thirds of total transactions in derivative

products. In recent years, the market for financial derivatives has grown

tremendously both in terms of variety of instruments available, their complexity and

also turnover. In the class of equity derivatives, futures and options on stock indices

have gained more popularity than on individual stocks, especially among

institutional investors, who are major users of index-linked derivatives.

Even small investors find these useful due to high correlation of the popular indices

with various portfolios and ease of use. The lower costs associated with index

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derivatives vis-vis derivative products based on individual securities is another

reason for their growing use.

1.1. Back Ground: -

The emergence of the market for derivative products, most notably forwards, futures

and options, can be traced back to the willingness of risk-averse economic agents to

guard themselves against uncertainties arising out of fluctuations in asset prices. By

their very nature, the financial markets are marked by a very high degree of

volatility. Through the use of derivative products, it is possible to partially or fully

transfer price risks by locking-in asset prices. As instruments of risk management,

these generally do not influence the fluctuations in the underlying asset prices.

However, by locking-in asset prices, derivative products minimize the impact of

fluctuations in asset prices on the profitability and cash flow situation of risk-averse

investors.

Derivative products initially emerged, as hedging devices against fluctuations

in commodity prices and commodity-linked derivatives remained the sole form of

such products for almost three hundred years. The financial derivatives came into

spotlight in post-1970 period due to growing instability in the financial markets.

However, since their emergence, these products have become very popular and by

1990s, they accounted for about two-thirds of total transactions in derivative

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products. In recent years, the market for financial derivatives has grown

tremendously both in terms of variety of instruments available, their complexity and

also turnover. In the class of equity derivatives, futures and options on stock indices

have gained more popularity than on individual stocks, especially among

institutional investors, who are major users of index-linked derivatives.

Even small investors find these useful due to high correlation of the popular indices

with various portfolios and ease of use. The lower costs associated with index

derivatives vis-vis derivative products based on individual securities is another

reason for their growing use.

The following factors have been driving the growth of financial derivatives:

1. Increased volatility in asset prices in financial markets,

2. Increased integration of national financial markets with the international

markets,

3. Marked improvement in communication facilities and sharp decline in their

costs,

4. Development of more sophisticated risk management tools, providing

economic agents a wider choice of risk management strategies, and

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5. Innovations in the derivatives markets, which optimally combine the risks and

returns over a large number of financial assets, leading to higher returns,

reduced risk as well as trans-actions costs as compared to individual financial

assets.

1.2. Motivation/Need of Study:-

Different investment avenues are available for investors. Stock market also offers

good investment opportunities to the investor alike all investments, they also carry

certain risks. The investor should compare the risk and expected yields after

adjustment off tax on various instruments while talking investment decision the

investor may seek advice from consultancy include stock brokers and analysts while

making investment decisions. The objective here is to make the investor aware of

the functioning of the derivatives.

Derivatives act as a risk hedging tool for the investors. The objective is to help the

investor in selecting the appropriate derivates instrument to attain maximum risk and

to construct the portfolio in such a manner to meet the investor should decide how

best to reach the goals from the securities available.

To identity investor objective constraints and performance, which help formulate the

investment policy.

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To develop and improve strategies in the investment policy formulated. This will

help the selection of asset classes and securities in each class depending up on their

risk return attributes.

1.3. Objectives:-

The study includes different strategies of derivatives used in present scenario.

1. To compare the risk involved in derivative instruments for customer.

2. To examine the different strategy which are used by the investors for the

purpose of risk hedging in their portfolio.

1.4. Research Hypothesis:-

1. Diversification in portfolio will reduce the risk.

1.5 Scope of Study:-

The scope of study is limited to “Derivatives” with special reference to futures,

options, swaps and forwards in the Indian context; the study is not based on the

international perspective of derivative markets.

The study is limited to the analysis made for types of instruments of derivates each

strategy is analyzed according to its risk and return characteristics and derivatives

performance against the profit and policies of the company.

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2. RESEARCH METHODOLOGY:-

Concept of Derivatives

The term ‘derivatives, refers to a broad class of financial instruments which mainly

include options and futures. These instruments derive their value from the price and

other related variables of the underlying asset. They do not have worth of their own

and derive their value from the claim they give to their owners to own some other

financial assets or security. A simple example of derivative is butter, which is

derivative of milk. The price of butter depends upon price of milk, which in turn

depends upon the demand and supply of milk. The general definition of derivatives

means to derive something from something else. Some other meanings of word

derivatives are:

 Derived function: the result of mathematical differentiation; the instantaneous

change of one quantity relative to another; df(x)/dx,

 Derivative instrument: a financial instrument whose value is based on another

security, (linguistics) a word that is derived from another word; "`electricity'

is a derivative of ‘electric’.

The asset underlying a derivative may be commodity or a financial asset. Derivatives

are those financial instruments that derive their value from the other assets. For

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example, the price of gold to be delivered after two months will depend, among so

many things, on the present and expected price of this commodity.

Definition of Financial Derivatives

Section 2(ac) of Securities Contract Regulation Act (SCRA) 1956 defines Derivative

as:

a) “a security derived from a debt instrument, share, loan whether secured or

unsecured, risk instrument or contract for differences or any other form of security;

b) “a contract which derives its value from the prices, or index of prices, of

underlying securities”.

Underlying Asset in a Derivatives Contract

As defined above, the value of a derivative instrument depends upon the underlying

asset. The underlying asset may assume many forms:

i. Commodities including grain, coffee beans, orange juice;

ii. Precious metals like gold and silver;

iii. Foreign exchange rates or currencies;

iv. Bonds of different types, including medium to long term negotiable debt

securities issued by governments, companies, etc.

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v. Shares and share warrants of companies traded on recognized stock exchanges

and Stock Index

vi. Short term securities such as T-bills; and

vii. Over- the Counter (OTC) 2 money market products such as loans or deposits.

Participants in Derivatives Market

1. Hedgers: They use derivatives markets to reduce or eliminate the risk associated

with price of an asset. Majority of the participants in derivatives market belongs to

this category.

2. Speculators: They transact futures and options contracts to get extra leverage in

betting on future movements in the price of an asset. They can increase both the

potential gains and potential losses by usage of derivatives in a speculative venture.

3. Arbitrageurs: Their behavior is guided by the desire to take advantage of a

discrepancy between prices of more or less the same assets or competing assets in

different markets. If, for example, they see the futures price of an asset getting out

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of line with the cash price, they will take offsetting positions in the two markets to

lock in a profit.

Applications of Financial Derivatives

Some of the applications of financial derivatives can be enumerated as follows:

1. Management of risk: This is most important function of derivatives. Risk

management is not about the elimination of risk rather it is about the management

of risk. Financial derivatives provide a powerful tool for limiting risks that

individuals and organizations face in the ordinary conduct of their businesses. It

requires a thorough understanding of the basic principles that regulate the pricing of

financial derivatives. Effective use of derivatives can save cost, and it can increase

returns for the organizations.

2. Efficiency in trading: Financial derivatives allow for free trading of risk

components and that leads to improving market efficiency. Traders can use a

position in one or more financial derivatives as a substitute for a position in the

underlying instruments. In many instances, traders find financial derivatives to be a

more attractive instrument than the underlying security. This is mainly because of

the greater amount of liquidity in the market offered by derivatives as well a the

lower transaction costs associated with trading a financial derivative as compared to

the costs of trading the underlying instrument in cash market.

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3. Speculation: This is not the only use, and probably not the most important use,

of financial derivatives. Financial derivatives are considered to be risky. If not used

properly, these can leads

to financial destruction in an organization like what happened in Barings Plc.

However, these instruments act as a powerful instrument for knowledgeable traders

to expose themselves to calculated and well understood risks in search of a reward,

that is, profit.

4. Price discover: Another important application of derivatives is the price

discovery which means revealing information about future cash market prices

through the futures market. Derivatives markets provide a mechanism by which

diverse and scattered opinions of future are collected into one readily discernible

number which provides a consensus of knowledgeable thinking.

5. Price stabilization function: Derivative market helps to keep a stabilizing

influence on spot prices by reducing the short-term fluctuations. In other words,

derivative reduces both peak and depths and leads to price stabilization effect in the

cash market for underlying asset.

Classification of Derivatives

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Broadly derivatives can be classified in to two categories as shown in Fig.1:

Commodity derivative and financial derivatives. In case of commodity derivatives,

underlying asset can be commodities like wheat, gold, silver etc., whereas in case of

financial derivatives underlying assets are stocks, currencies, bonds and other

interest rates bearing securities etc. Since, the scope of this case study is limited to

only financial derivatives so we will confine our discussion to financial derivatives

only.

Forward Contract: - A forward contract is an agreement between two parties to

buy or sell an asset at a specified point of time in the future. In case of a forward

contract the price which is paid/ received by the parties is decided at the time of

entering into contract. It is the simplest form of derivative contract mostly entered

by individuals in day to day’s life.

Forward contract is a cash market transaction in which delivery of the instrument is

deferred until the contract has been made. Although the delivery is made in the

future, the price is determined on the initial trade date. One of the parties to a forward

contract assumes a long position (buyer) and agrees to buy the underlying asset at a

certain future date for a certain price. The other party to the contract known as seller

assumes a short position and agrees to sell the asset on the same date for the same

price. The specified price is referred to as the delivery price. The contract terms like

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delivery price and quantity are mutually agreed upon by the parties to the contract.

No margins are generally payable by any of the parties to the other. Forwards

contracts are traded over-the- counter and are not dealt with on an exchange unlike

futures contract. Lack of liquidity and counter party default risks are the main

drawbacks of a forward contract. For instance, consider a US based company buying

textile from an exporter from England worth £ 1 million payment due in 90 days.

The Importer is short of Pounds- it owes pounds for future delivery. Suppose the

spot (cash market) price of pound is US $ 1.71 and importer fears that in next 90

days, pounds might rise against the dollar, thereby raising the dollar cost of the

textiles. The importer can guard against this risk by immediately negotiating a 90

days forward contract with City Bank at a forward rate of say, £ 1= $1.72. According

to the forward contract, in 90 days the City Bank will give the US Importer £ I

million (which it will use to pay for textile order), and importer will give the bank $

1.72 million (1million ×$1.72) which is the dollar cost of £ I million at the forward

rate of $ 1.72.

Futures Contract: - Futures is a standardized forward contact to buy (long) or sell

(short) the underlying asset at a specified price at a specified future date through a

specified exchange. Futures contracts are traded on exchanges that work as a buyer

or seller for the counterparty. Exchange sets the standardized terms in term of

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Quality, quantity, Price quotation, Date and Delivery place (in case of

commodity).The features of a futures contract may be specified as follows:

i These are traded on an organized exchange like IMM, LIFFE, NSE, BSE, CBOT

etc.

ii These involve standardized contract terms viz. the underlying asset, the time of

maturity and the manner of maturity etc.

iii These are associated with a clearing house to ensure smooth functioning of the

market.

iv There are margin requirements and daily settlement to act as further safeguard.

v These provide for supervision and monitoring of contract by a regulatory authority.

vi Almost ninety percent future contracts are settled via cash settlement instead of

actual delivery of underlying asset.

Futures contracts being traded on organized exchanges impart liquidity to the

transaction. The clearinghouse, being the counter party to both sides of a transaction,

provides a mechanism that guarantees the honoring of the contract and ensuring very

low level of default (Hirani, 2007). Following are the important types of financial

futures contract:-

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i Stock Future or equity futures,

ii Stock Index futures,

iii Currency futures, and

iv Interest Rate bearing securities like Bonds, T- Bill Futures.

To give an example of a futures contract, suppose on November 2007 Ramesh holds

1000 shares of ABC Ltd. Current (spot) price of ABC Ltd shares is Rs 115 at

National Stock Exchange (NSE). Ramesh entertains the fear that the share price of

ABC Ltd may fall in next two months resulting in a substantial loss to him. Ramesh

decides to enter into futures market to protect his position at Rs 115 per share for

delivery in January 2008. Each contract in futures market is of 100 Shares. This is

an example of equity future in which Ramesh takes short position on ABC Ltd.

Shares by selling 1000 shares at Rs 115 and locks into future price.

Options Contract:- In case of futures contact, both parties are under obligation to

perform their respective obligations out of a contract. But an options contract, as the

name suggests, is in some sense, an optional contract. An option is the right, but not

the obligation, to buy or sell something at a stated date at a stated price. A “call

option” gives one the right to buy; a “put option” gives one the right to sell. Options

are the standardized financial contract that allows the buyer (holder) of the option,

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i.e. the right at the cost of option premium, not the obligation, to buy (call options)

or sell (put options) a specified asset at a set price on or before a specified date

through exchanges. Options contracts are of two types: call options and put options.

Apart from this, options can also be classified as OTC (Over the Counter) options

and exchange traded options. In case of exchange traded options contract, contracts

are standardized and traded on recognized exchanges, whereas OTC options are

customized contracts traded privately between the parties. A call options gives the

holder (buyer/one who is long call), the right to buy specified quantity of the

underlying asset at the strike price on or before expiration date. The seller (one who

is short call) however, has the obligation to sell the underlying asset if the buyer of

the call option decides to exercise his option to buy. Suppose an investor buys One

European call options on Infosys at the strike price of Rs. 3500 at a premium of Rs.

100. Apparently, if the market price of Infosys on the day of expiry is more than Rs.

3500, the options will be exercised. In contrast, a put options gives the holder (buyer/

one who is long put), the right to sell specified quantity of the underlying asset at the

strike price on or before an expiry date. The seller of the put options (one who is

short put) however, has the obligation to buy the underlying asset at the strike price

if the buyer decides to exercise his option to sell. Right to sell is called a Put Options.

Suppose X has 100 shares of Bajaj Auto Limited. Current price (March) of Bajaj

auto shares is Rs 700 per share. X needs money to finance its requirements after two

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months which he will realize after selling 100 shares after two months. But he is of

the fear that by next two months price of share will decline. He decides to enter into

option market by buying Put Option (Right to Sell) with an expiration date in May

at a strike price of Rs 685 per share and a premium of Rs 15 per shares.

Swaps Contract:- A swap can be defined as a barter or exchange. It is a contract

whereby parties agree to exchange obligations that each of them have under their

respective underlying contracts or we can say, a swap is an agreement between two

or more parties to exchange stream of cash flows over a period of time in the future.

The parties that agree to the swap are known as counter parties.

The two commonly used swaps are:

i) Interest rate swaps which entail swapping only the interest related cash flows

between the parties in the same currency, and

ii) Currency swaps: These entail swapping both principal and interest between the

parties, with the cash flows in one direction being in a different currency than the

cash flows in the opposite direction.

2.1. Sources of Data:

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 Primary Sources: Data related to the Investors will collected through primary

sources.

 Secondary Sources: Concepts related to Derivatives and their usage will

collected through secondary sources.

2.2. Research Design:-

 Descriptive research design will be used as in this research the perception

investors in regard to derivatives will be studied.

 Methods of Data collection:-

 Interviews.

 Questionnaires.

2.3. Sampling:-

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Universe

Sampling
Population
Technique

Sampling
plan
Sample Sampling
Size unit

Sampling
frame

 Universe- All the people who are dealing in derivatives and were interested

to deal in derivatives.

 Population-

 All the people dealing in derivatives or interested in dealing, in

Dehradun.

 Sampling Unit – Every single person who is dealing in derivatives in

nearby places.

 Sampling Frame - It represents the elements of the target population.

Dehradun City is the sampling frame for this project.

 Sample size- Sample size 25 (25 investors).

 Sampling Technique - Non Probability technique i.e. convenience sampling.

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 PERIOD OF STUDY -The post-Reforms period of Five years from 2016-

2017 to 2012-2013 was taken to analyze and evaluate the performance of the
Financial Derivaties in India.

2.4. Data Analysis:-

To Study Investor’s Perception towards Derivatives, tools we will be using are:-

 Bar diagrams.

 Pie charts.

 Tables showing the responses of the investors.

2.5. Review of literature:- Before derivatives markets were truly developed, the

means for dealing with financial risks were few and financial risks were largely

outside managerial control. Few exchange- traded derivatives did exist, but they

allowed corporate users to hedge only against certain financial risks, in limited ways

and over short time horizons. Companies were often forced to resort to operational

alternatives like establishing plants abroad, in order to minimize exchange-rate risks,

or to the natural hedging by trying to match currency structures of their assets and

liabilities (Santomero, 1995). Allen and Santomero (1998) wrote that, during the

1980s and 1990s, commercial and investment banks introduced a broad selection of

new products designed to help corporate managers in handling financial risks. At the

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same time, the derivatives exchanges, which successfully introduced interest rate

and currency derivatives in the 1970s, have become vigorous innovators, continually

adding new products, refining the existing ones, and finding new ways to increase

their liquidity. Since than, markets for derivative instruments such as forwards and

futures, swaps and options, and innovative combinations of these basic financial

instruments, have been developing and growing at a breathtaking pace. The range

and quality of both exchangetraded and OTC derivatives, together with the depth of

the market for such instruments, have expanded intensively. Consequently, the

corporate use of derivatives in hedging interest rate, currency, and commodity price

risks is widespread and growing. It could be said that the derivatives revolution has

begun. The emergence of the modern and innovative derivative markets allows

corporations to insulate themselves from financial risks, or to modify them (Hu,

1995; 1996). Therefore, under these new conditions, shareholders and stakeholders

increasingly expect company’s management to be able to identify and manage

exposures to financial risks. It was long believed that corporate risk management

was irrelevant to the value of the firm and the arguments in favour of the irrelevance

were based on the Capital Asset Pricing Model (Sharpe, 1964; Lintner, 1965;

Mossin, 1966) and the Modigliani-Miller theorem (Modigliani and Miller, 1958).

One of the most important implications of CAPM is that diversified shareholders

should care only about the systematic component of total risk. On the surface this

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may imply that managers of firms who are acting in the best interests of shareholders

should be indifferent about the hedging of risks that are non-systematic.

Miller and Modigliani’s proposition supports the CAPM findings. The conditions

underlying MM propositions also imply that decisions to hedge corporate exposures

to interest rate, exchange rate and commodity price risks are completely irrelevant

because stockholders already protect themselves against such risks by holding well-

diversified portfolios. However, it is apparent that managers are constantly engaged

in hedging activities that are directed towards reduction of non-systematic risk. As

an explanation for this clash between theory and practice, imperfections in the

capital market are used to argue for the relevance of corporate risk management

function. Studies that test the relevance of derivatives as risk management

instruments generally support the expected relationships between the risks and

firm’s characteristics. Stulz (1984), Smith and Stulz (1985) and Froot, Scharfstein

and Stein (1993) constructed the models of financial risk management. These models

predicted that firms attempted to reduce the risks arising from large costs of potential

bankruptcy, or had funding needs for future investment projects in the face of

strongly asymmetric information. In many instances, such risk reduction can be

achieved by the use of derivative instruments. Campbell and Kracaw (1987),

Bessembinder (1991), Nance, Smith and Smithson (1993), Dolde (1995), Mian

(1996), as well as Getzy, Minton and Schrand (1997) and Haushalter (2000) found

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empirical evidence that firms with highly leveraged capital structures are more

inclined to hedging by using derivatives. The probability of a firm to encounter

financial distress is directly related to the size of the firm’s fixed claims relative to

the value of its assets. Hence, hedging will be more valuable the more indebted the

firm, because financial distress can lead to bankruptcy and restructuring or

liquidation – situations in which the firm faces direct costs of financial distress. By

reducing the variance of a firm’s cash flows or accounting profits, hedging decreases

the likelihood, and thus the expected costs, of financial distress (see: Mayers and

Smith, 1982; Myers, 1984; Stulz, 1984; Smith and Stulz, 1985; Shapiro and Titman,

1998). The argument of reducing theexpected costs of financial distress implies that

the benefits of risk management should be greater the larger the fraction of fixed

claims in the firm’s capital structure. The results of the empirical studies suggest that

the use of derivatives and risk management practices are broadly consistent with the

predictions from the theoretical literature, which is based upon value-maximising

behaviour. By hedging financial risks such as currency, interest rate and commodity

risk, firms can decrease cash flow volatility. By reducing the cash flow volatility,

firms can decrease the expected financial distress and agency costs, thereby

enhancing the present value of expected future cash flows. In addition, reducing cash

flow volatility can improve the probability of having sufficient internal funds for

planned investments, (e.g. see: Stulz, 1984; Smith and Stulz, 1985; Froot,

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Scharfstein and Stein, 1993; 1994) eliminating the need to either cut profitable

projects or bear the transaction costs of external funding. The main hypothesis is

that, if access to external financing (debt and/or equity) is costly, firms with

investment projects requiring funding will hedge their cash flows to avoid a shortfall

in own funds, which could precipitate a costly visit to the capital markets. An

interesting empirical insight based on this rationale is that firms with substantial

investment opportunities that are faced with high costs of raising funds under

financial distress will be more motivated to hedge against risk exposure than average

firms. This rationale has been explored by numerous scholars, among others by

Hoshi, Kashyap and Scharfstein (1991), Bessembinder (1991), Dobson and Soenen

(1993), Froot, Scharfstein and Stein (1993), Getzy, Minton and Schrand (1997), Gay

and Nam (1998), Minton and Schrand (1999), Haushalter (2000), Mello and Parsons

(2000), Allayannis and Ofek (2001) and Haushalter, Randall and Lie (2002). The

results of the studies mentioned above confirm that companies using derivative

instruments to manage financial risks are more likely to have larger investment

opportunities.

The results of empirical studies have also proven that the benefits of risk

management programs depend on the company size. Nance, Smith and Smithson

(1993), Dolde (1995), Mian (1996), Getzy, Minton and Schrand (1997) and

Hushalter (2000) argue that larger firms are more likely to hedge and use derivatives.

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One of the key factors in the corporate risk management rationale pertains to the

costs of engaging in risk-management activities. The hedging costs include the direct

transaction costs and the agency costs of ensuring that managers transact

appropriately.3 the assumption underlying this rationale is that there are substantial

economies of scale or economically significant costs related to derivatives use.

Indeed, for many firms (particularly smaller ones), the marginal benefits of hedging

programs may be exceeded by marginal costs. This fact suggests that there may be

sizable set-up costs related to operating a corporate risk-management program. Thus,

numerous firms may not hedge at all, even though they are exposed to financial risks,

simply because it is not an economically worthwhile activity. On the basis of

empirical results, it can be argued that only large firms with sufficiently large risk

exposures are likely to benefit from formal hedging programs.

2.6. Expected findings:-

 What are the main factors that led to growth of derivatives?

 Derivatives carry high risk factor and amongst that commodity derivatives are

the most risky to trade.

 How many people use derivative as Hedging tool.

 Profit is the main reason for motivating the people to invest in derivatives.

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 Do people prefer to invest their money through derivatives if they are provided

with knowledge.

2.7. Limitations:-

Limitations are the limiting lines that restrict the work in some way or other. In this

research study also there will be some limiting factors, some of them are as under:

1. Data Collection: The most important constraint in this study will going to be data

collection as both Primary and Secondary data was selected for study. Secondary

data means data that are already available i.e. they refer to the data which have

already been collected and analysed by someone else.

2. Time Period: Time period will one of the main factor as only one month is

allotted and the topic covered in research has a wide scope. So, it was not possible

to cover it in a short span of time.

3. Reliability: The data collected in research work will be secondary data, so, this

puts a question mark on the reliability of this data.

4. Accuracy: The facts and findings of the data cannot be accepted as accurate to

some extent as firstly, secondary data will be collected. Secondly, for doing

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descriptive research time needed to be more, because in short period you cannot

cover each point accurately.

2.8. References:-

 The Derivatives as Financial Risk Management Instruments: The Case of

Croatian and Slovenian Non-financial Companies Financial Theory and

Practice 31 (4) 395-420 (2007)

 Modigliani, M. and Miler, M., 1958. “The Cost of Capital, Corporate Finance

and Theory of Investment.” The American Economic Review, 48 (3), 261-

297.

 ‘Indian Securities Market, A Review’ (ISMR)-2008 available at:

http://www.nseindia.com.

 Growth of Derivatives Market In India, available at:

http://www.valuenotes.com/njain/nj_derivatives_15sep03.asp?ArtCd=33178

&Cat=T&Id=10.

 Gambhir, Neeraj and Manoj Goel, 2003, Foreign Exchange Derivatives

Market in India---Status and Prospects, Susan Thomas (ed.), Derivatives

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Markets in India, Tata McGraw-Hill Publishing Company Limited, New

Delhi, India.

Websites

 www.derivativesindia.com

 www.nse-india.com

 www.sebi.gov.in

 www.rediff/money/derivatives.htm

 www.iinvestor.com

 www.appliederivatives.com

 www.economictimes.com

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