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ASSIGNMENT - 1

OF

MARKETING RESEARCH

Topic: Develop a Research Proposal on the Narang Fiscal &


Investment Services Company

Submitted To: Submitted By:

Dr. Neha Kalra Isha

181114

MBA-3rd sem.
INTRODUCTION

Stock Exchange

The stock exchange in India, under the overall supervision of the regulatory authority,
the Securities and Exchanges Board of India (SEBI), provide a trading platform, where
buyers and sellers can meet to transact in securities. The trading platform provided by
NSE is an electronic one and there is no need for buyers sellers to meet at a physical
location to trade. They can trade through the computerized trading screens available
with the NSE trading members or the internet based trading facility provided by the
trading members of NSE. The market for long term securities like bonds, equity stock
and preferred stocks are divided in two primary and secondary markets. The primary
market deals with the new issues of securities. Outstanding securities are traded in the
secondary market which is commonly known as stock market or stock exchange. In the
secondary market the investors can sell and buy securities. Stock markets
predominantly deal in the equity share. Debt instruments like bonds and debentures are
also traded in the stock market. Well regulated and active stock market promotes
capital formation. Growth of the primary market depends on the stock market.

Investor Behaviour :

Investors are the backbone of capital market. A developing economy, like India,
needs a growing amount of savings to flow to corporate enterprises. The level of
equity market participation of the retail investors has been increasing over the past
few years. Investment is the flow of capital which is used for productive purposes.
There is a great emphasis on investment for being the primary instrument of economic
growth and development for a country. There are a large number of investment
instruments available today. Some of them are marketable and liquid while others are
non-marketable and illiquid. There are instruments which are highly risky while
others are almost riskless.
The investors choose avenues, depending upon their specific need, risk appetite, and
return expected. Investment avenues can broadly be categorized into two spheres,
namely, economic investment and financial investment. Purchasing of a physical asset
such as a building or equipment is an economic investment. Economic investments
contribute to the net additions to the capital stock of a society. Financial investments,
on the other hand, refer to investment in financial instruments like shares, debentures,
insurance policies, mutual fund units etc. Financial investments help in creating the
capital stock of the country. In the long term, investment is important for improving
productivity and increasing the competitiveness of an economy.

REVIEW OF LITERATURE

The review of literature helps to understand the background and present situation
related to the subject selected for the research work. The attempt is made to take the
review of available literature published in the form of books, journals, thesis and
newspapers. The brief study on review of literature revealed the fact that number of
studies have been carried out in the area of stock market but in Indian context, still a
wide gap exist in the research field with particular stress on the same aspect. In order
to fill the research gap of focus only on the investment securities and schemes and the
need aroused to study the behaviour of stock exchange.

It can be seen that volatility has its long term impact in the market so an investor is
required to take all possible measures to design his portfolio. Stock returns bear a
good relationship with volatility as with increase in financial volatility stock prices
fluctuates. So, It is required to understand the behaviour and fluctuations in the
bourses of stock exchange. The scope of present study was limited to investors who
have invested in stock market.
OBJECTIVES

The main objective of the study is to assess the behaviour of investors in stock market.
To be more precise, following objectives are conceptualized in the study :

1. To understand the behaviour of individual investors in Indian stock market,


specifically their attitude and perception with respect to the stock market.

2. To identify the preferred source of information influencing investment decision and


to access the psychology of investors in different market situations.

3. To categorize the investors in different criteria on the basis of their psychology


like conservative, opportunistic, speculative.

4. To study the pattern of investment of retail investors based at Hoshiarpur.

5. To develop risk appetite scores for retail investors of different background and
cluster them in accordance with risk appetite scores.

6. To find out whether risk appetite scores of investors are dependent on their
demographic profiles.

RESEARCH METHODOLOGY

Research is the systematized efforts to gain new knowledge. A Research


Methodology defines the purpose of the research, how it proceeds, how to measure
progress and what constitute success with respect to the objectives determined for
carrying out the research study. The appropriate research design formulated is detailed
below. A scientifically carried out research project has a definite framework for data
collection. This framework constitute the research design. It determines the data
collection method, sampling method, the fieldwork and so on. Stock Market volatility
is unavoidable. It is the nature of the stock markets to fluctuate and turn red and green
within short span of time. Volatility is an essential part of the stock market because it
checks the nerve of the market. As a coin has two sides, the same way market has two
aspects the positive and the negative. Any information in the market will result into
changes in prices of any stock which is the cause of fluctuations in the market and
hence volatility. At present, stock market is much volatile because of the impact of
weak rupee against dollar.
RESEARCH DESIGN
Research design is the conceptual structure within which research was conducted. It
constitutes the blueprint for collection, measurement and analysis of data. The
research design for the present study was descriptive as it matches well with the
objectives of study. This research was an attempt to know the factors which highly
influenced the people regarding stock exchange.

SAMPLING DESIGN

Sampling can be defined as the section of some part of an aggregate on the basis of
which judgement or an inference about aggregate was made. The steps involved in
sampling design as follows:

Universe

Universe refers to the total of the units in fields of enquiry. The study was limited to
investors of Hoshiarpur city that used to invest in various securities like bank deposits,
debentures/bonds, equity, insurance and real estate etc.

Sampling Frame

The sampling frame contains all the units of the population. It is to be defined clearly
as to which units were to be included in the frame. The frame provides a base for the
selection of the sample. It included all business and working class people of
Hoshiarpur within age from 20 to above 60.

Sampling Unit

A sampling unit is typically thought of an object that has been sampled from a
statistical population. It refers to the individual, state, village, industry, institution to
be survey. The sample unit of the present study was those who invest in various
avenues like mutual funds, bank deposits, shares and debentures etc.

Sample Size

It refers to the number of items to be selected from the universe to constitute a sample.
The survey was conducted on sample size of 30.
Sampling Technique

Initially a rough draft was prepared keeping in mind the objective of the research. A
pilot study was done in order to know the accuracy in the questionnaire was prepared
only after certain important changes. Thus the sampling came out to be judgemental
and convenient.

Data Collection And Analysis

Data Collection

There are two sources from which data can be collected. For the purpose of study,
both primary and secondary data were required.

 Secondary Data

Secondary data is data which is collected already for some other purposes. This
indirect information of all the data from sources containing past and present
information is collected from internet, publications, research papers & journals,
various websites including official website of various stock exchange companies, the
published research report and market studies to solve the problem.

 Primary Data

Primary data is that type of data which is collected first time for some specific
purpose. There are various means of the primary data collection. Here the mean of
the collection of the primary data is questionnaire method which was devised to be
brief an simple.
RESEARCH IMPLICATIONS

The behavioral finance has been recognized as an important area in the study of recent
finance literature. Its implicit objective is to discover and remedy the deviations from
the rational decision making in the investment process. The purpose of this study is to
examine the role of various socioeconomic, demographic and attitudinal factors
affecting the investment decision of investors in the market.

A psychological based investment model has been developed which describes the
impact of past investment experience of investors, variations in regulatory policies
and asymmetric information, their marital status, gender, sensation seeking, on
reinvestment intentions of investors and their return expectations through mediating
role of risk propensity and risk perception. Demographic factors such as income level,
occupation, no. of family members and age-group of the respondents significantly
impact their risk appetite scores but demographic Factors such as educational
qualification and gender of the respondents do not significantly impact their risk
tolerance scores. On the basis of degree of influencing preference of non-investors not
to invest on equity, the priority list of variables is as follows, fear of being cheated,
stock market volatility, lack of knowledge, lack of risk taking capacity, misleading
data, lack of investible surplus, negative word of mouth and lack of time to be vigilant
every now and then.