Derivative Equity (1)

8/6/2019 Derivative Equity (1)

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A

PROJECT REPORT

ON

AWARENESS, PREFERENCE AND POTENTIAL

GROWTH OF DERIVATIVE WITH SPECIAL

REFERENCE TO EQUITY ONLY.

UNDERTAKEN AT

India Infoline Securities Pvt. Ltd., Surat.

Submitted By:

Miss Krishna Dhamecha

06MBA10

Guided By:

Mr. Govind Dhinaiya

MBA Programme

(Year 2006-08)

SHRIMAD RAJCHANDRA INSTITUTE OF

MANAGEMENT AND COMPUTER APPLICATION


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DECLARATION

I here by declare that the summer project report titledAWARENESS, PREFERENCE AND POTENTIAL GROWTH OF

DERIVATIVE WITH SPECIAL REFERENCE TO EQUITY ONLYis based

on original piece of work done by me for the fulfillment of degree of

Master of Business Administration and whatever information has been

taken from any sources had been duly acknowledge.

I further declare that the personal data & information

received from any respondent during survey has not been shared with

any one and is used for academic purpose only.

Date: Krishna K. Dhamecha

Place: (06MBA10)


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ACKNOWLEDGEMENT

It is a fact that none of the human being in this world is 100%

perfect and in order to gain some perfect ness in itself an individual surely

needs a helping hand. The same was with me with respect to the project

that I was undergoing during this session of 2 months. As I too was

illiterate with this research topic that I selected for my research at the

initial stages, I got acquainted with it slowly and steadily through efforts

and surely from various intelligent and helpful personalities. I would like

to extend my heartily thanks to all of them through this

acknowledgement.

To start with, I would like to thanks to Mr. Mayur Bhagat, branch

head of India Infoline Pvt. Ltd., Surat, who have been source of constant

inspiration and encouragement to me who have from time to time offered

valuable suggestion and ideas.

I would also like to thanks to Mr. Manish Bhatia, Mr. Kalpesh

Chopra and Mr. Dharmesh Chaudhary for giving me necessary

guidelines.

I personally would like to thanks our director Dr. Bankim Patel

and my training coordinator Mr. Govind Dhinaiya, our Faculty for

assisting me throughout the project period, guiding me and assisting at

various stages and thus sharing his valuable knowledge with me to

enhance my knowledge and helping me in preparing a project.

I would also like to thanks all the Faculty members, who directly or

indirectly help me to successfully complete my project.

I would also like to extend my thanks to all the respondents who

spared their valuable time and helped me in filling up the questionnaire


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by providing the needed information. Lastly, I would like to thanks all of

those who have helped to furnish this project successfully.

EXECUTIVE SUMMARY

Days were gone when people only invest their money in post office

or in banks. Today people have several choices for the investment. One of

the most emerging choices is to invest in shares (equities). To get good

return on investment, people are ready to take risks. Law always says

that investors get higher return if they take high risk. For high risk there is

one avenue to invest and that is derivatives.

This Project Focused On AWARENESS, PREFERENCE AND

POTENTIAL GROWTH OF DERIVATIVE WITH SPECIAL REFERENCE TO

EQUITY ONLY. Objectives behind this project are to know awareness level

among investors, to know their preference of investment in derivative and

to know whether potential growth of derivative is there or not.

I have used descriptive research design because it only describes

the situation and used non-probability convenience sampling method.

Questionnaire is used for survey purpose and before going to actual

survey pilot testing was also done. Sample size is of 100 and respondent

were from India Infoline Securities Pvt. Ltd. I have used SPSS software for

analysis purpose and in that I have used T-test because data are interval

in nature.

Most of the customers are aware about derivative market. There are

certain customers who are not aware about derivative market but they

are investing only and again on the contrary investors have all knowledge


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about derivative market, they are aware about derivative market but they

are not investing in derivatives. Reasons for not investing in derivative

market are high return and margin money. Investors are investing in

derivatives only due to earn high return and hedge the risk.

Most of the investors are preferred to invest in Index Future and

Index Option in proportion of 20% - 50% of their portfolio. Mostly service

men are investing in derivative market. When we talk about potential

growth, it can be known from past data only. It says that currently a

derivative is in booming stage but analysts says that it will decline in

2007-2008. We can see from graph given at last.

Hence it can be concluded that investors are aware about derivative

market as well as they are preferred to invest in derivative market also,

even currently growth of derivative market is booming but technical

analysts says that derivative market will turn in to decline stage in 2007-

2008.

It is recommended to company that firstly convert all non users into

users as there are many people who are aware about derivative market

but not at all investing in it so company should give more attention

towards those people. Another that is from survey we came to know that

only service people are investing in derivatives so company can focus on

students also because derivatives are risky and younger generation likes

to take risk so there is potential in students.


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TABLE OF CONTENTS

Sr. No. TOPIC Page No.1.0 INTRODUCTION

1.1Share Broking Service Sector Profile

1.2Theory Profile

1.3Company profile

2.0 RESEARCH METHODOLOGY3.0 DATA ANALYSIS & INTERPRETATION4.0 FINDINGS5.0 RECOMMANDATIONS

BIBLIOGRAPHYAPPENDIX


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SHARE BROKING SERVICE SECTOR PROFILE:

There are several national as well as local players in stock trading

services which are providing various services to their customers like

online trading, portfolio management system, stock them several national

level players.

KEY PLAYERS:

5Paisa.com - Online trading, live stock quotes and market research

Advani Share Brokers - Share broking and market research services

Anand Rathi Securities - Portfolio management, corporate finance,

equity & fixed income brokerage services

Brescon Group - Advisory and broking services

CIL Securities - Stock broking & merchant banking services

CRN India - Trends of stock market, trading tips, chat etc

Churiwala Securities - Stock trading, quotes and market analysis

DSP Merrill Lynch - Investment banking and brokerage services

Dalmia Securities - Stock broking & depository services

EquityTrade - Stock trading, company news & market research

Gandhi Securities - Stock broking and investment services

Gogia Capital Services - Stock broking and market analysis

Hasmukh Lalbhai - Stock trading services Idafa Investments - Stock broking services

India Market Access - Offers stock broking, portfolio management

and investment banking services

Investsmart India - Personal finance advisory & online brokerage

services
http://www.searchindia.com/cgi-bin/search/index.cgi?ID=966377344http://www.searchindia.com/cgi-bin/search/index.cgi?ID=1016666638http://www.searchindia.com/cgi-bin/search/index.cgi?ID=955747502http://www.searchindia.com/cgi-bin/search/index.cgi?ID=973785596http://www.searchindia.com/cgi-bin/search/index.cgi?ID=947985327http://www.searchindia.com/cgi-bin/search/index.cgi?ID=956950423http://www.searchindia.com/cgi-bin/search/index.cgi?ID=987687249http://www.searchindia.com/cgi-bin/search/index.cgi?ID=947365968http://www.searchindia.com/cgi-bin/search/index.cgi?ID=955888141http://www.searchindia.com/cgi-bin/search/index.cgi?ID=964445292http://www.searchindia.com/cgi-bin/search/index.cgi?ID=987687084http://www.searchindia.com/cgi-bin/search/index.cgi?ID=930095925http://www.searchindia.com/cgi-bin/search/index.cgi?ID=993560917http://www.searchindia.com/cgi-bin/search/index.cgi?ID=978734958http://www.searchindia.com/cgi-bin/search/index.cgi?ID=930088159http://www.searchindia.com/cgi-bin/search/index.cgi?ID=952057582http://www.searchindia.com/cgi-bin/search/index.cgi?ID=966377344http://www.searchindia.com/cgi-bin/search/index.cgi?ID=1016666638http://www.searchindia.com/cgi-bin/search/index.cgi?ID=955747502http://www.searchindia.com/cgi-bin/search/index.cgi?ID=973785596http://www.searchindia.com/cgi-bin/search/index.cgi?ID=947985327http://www.searchindia.com/cgi-bin/search/index.cgi?ID=956950423http://www.searchindia.com/cgi-bin/search/index.cgi?ID=987687249http://www.searchindia.com/cgi-bin/search/index.cgi?ID=947365968http://www.searchindia.com/cgi-bin/search/index.cgi?ID=955888141http://www.searchindia.com/cgi-bin/search/index.cgi?ID=964445292http://www.searchindia.com/cgi-bin/search/index.cgi?ID=987687084http://www.searchindia.com/cgi-bin/search/index.cgi?ID=930095925http://www.searchindia.com/cgi-bin/search/index.cgi?ID=993560917http://www.searchindia.com/cgi-bin/search/index.cgi?ID=978734958http://www.searchindia.com/cgi-bin/search/index.cgi?ID=930088159http://www.searchindia.com/cgi-bin/search/index.cgi?ID=952057582


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Kisan Ratilal Choksey Shares - Stock broking and e-trading services

Kotak Securities - Brokerage services & retail distributor of financial

securities

Manubhai Mangaldas Securities - Stock broking and market analysis

Moneypore - Investment and broking services

Motilal Oswal - Online trading, live BSE and NSE quotes

Navia Markets - Stock broking, IPO and mutual funds services

Parag Parikh - Stock broking and portfolio management

Parsoli Corporation - Investment management & stock trading

services

Pratibhuti Viniyog - Stock broking services

Prudential - Investment management services

Quantum Securities - Offers broking and portfolio management

services.

Sivan Securities - offers services related investment banking &

stock broking with a focus on South India.

Skindia Finance - Brokerage firm focusing on GDR arbitrage,

equities & debt

Stock Holding Corporation of India - Custody management,safekeeping & stock broking services

StockMarkit.com - Stock quotes, news, market indicators etc

Sunidhi Consultancy - Stock broking, portfolio management & equity

research

Techno Shares - Stock broking and portfolio management

Valia Consultancy- Stock investment and trading consultancy
http://www.searchindia.com/cgi-bin/search/index.cgi?ID=979347867http://www.searchindia.com/cgi-bin/search/index.cgi?ID=947365119http://www.searchindia.com/cgi-bin/search/index.cgi?ID=987687737http://www.searchindia.com/cgi-bin/search/index.cgi?ID=1000747099http://www.searchindia.com/cgi-bin/search/index.cgi?ID=930089255http://www.searchindia.com/cgi-bin/search/index.cgi?ID=968327356http://www.searchindia.com/cgi-bin/search/index.cgi?ID=956269124http://www.searchindia.com/cgi-bin/search/index.cgi?ID=959008817http://www.searchindia.com/cgi-bin/search/index.cgi?ID=956269269http://www.searchindia.com/cgi-bin/search/index.cgi?ID=930089345http://www.searchindia.com/cgi-bin/search/index.cgi?ID=930089426http://www.searchindia.com/cgi-bin/search/index.cgi?ID=930089783http://www.searchindia.com/cgi-bin/search/index.cgi?ID=956269857http://www.searchindia.com/cgi-bin/search/index.cgi?ID=956308138http://www.searchindia.com/cgi-bin/search/index.cgi?ID=963498864http://www.searchindia.com/cgi-bin/search/index.cgi?ID=963935171http://www.searchindia.com/cgi-bin/search/index.cgi?ID=995123111http://www.searchindia.com/cgi-bin/search/index.cgi?ID=987686896http://www.searchindia.com/cgi-bin/search/index.cgi?ID=987686896http://www.searchindia.com/cgi-bin/search/index.cgi?ID=979347867http://www.searchindia.com/cgi-bin/search/index.cgi?ID=947365119http://www.searchindia.com/cgi-bin/search/index.cgi?ID=987687737http://www.searchindia.com/cgi-bin/search/index.cgi?ID=1000747099http://www.searchindia.com/cgi-bin/search/index.cgi?ID=930089255http://www.searchindia.com/cgi-bin/search/index.cgi?ID=968327356http://www.searchindia.com/cgi-bin/search/index.cgi?ID=956269124http://www.searchindia.com/cgi-bin/search/index.cgi?ID=959008817http://www.searchindia.com/cgi-bin/search/index.cgi?ID=956269269http://www.searchindia.com/cgi-bin/search/index.cgi?ID=930089345http://www.searchindia.com/cgi-bin/search/index.cgi?ID=930089426http://www.searchindia.com/cgi-bin/search/index.cgi?ID=930089783http://www.searchindia.com/cgi-bin/search/index.cgi?ID=956269857http://www.searchindia.com/cgi-bin/search/index.cgi?ID=956308138http://www.searchindia.com/cgi-bin/search/index.cgi?ID=963498864http://www.searchindia.com/cgi-bin/search/index.cgi?ID=963935171http://www.searchindia.com/cgi-bin/search/index.cgi?ID=995123111http://www.searchindia.com/cgi-bin/search/index.cgi?ID=987686896


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INTRODUCTION OF TOPIC

History of derivative:

The origin of derivatives can be traced back to the need of farmers

to protect themselves against fluctuations in the price of their crop. From

the time it was sown to the time it was ready for harvest, farmers would

face price uncertainty. Through the use of simple derivative products, it

was possible for the farmer to partially or fully transfer price risks by

locking-in asset prices. These were simple contracts developed to meet

the needs of farmers and were basically a means of reducing risk.

A farmer who sowed his crop in June faced uncertainty over the

price he would receive for his harvest in September. In years of scarcity,

he would probably obtain attractive prices. However, during times ofoversupply, he would have to dispose off his harvest at a very low price.

Clearly this meant that the farmer and his family were exposed to a high

risk of price uncertainty.

On the other hand, a merchant with an ongoing requirement of

grains too would face a price risk - that of having to pay exorbitant prices

during dearth, although favorable prices could be obtained during periods

of oversupply. Under such circumstances, it clearly made sense for the

farmer and the merchant to come together and enter into a contract

whereby the price of the grain to be delivered in September could be

decided earlier. What they would then negotiate happened to be a


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commodity forward/ futures contracts. However when derivatives trading

in securities were introduced in 2001, the term security in the Securities

Contracts (Regulation) Act, 1956 (SCRA), was amended to include

derivative contracts in securities. Consequently, regulation of derivatives

came under the purview of Securities Exchange Board of India (SEBI). We

thus have separate regulatory authorities for securities and commodity

derivative markets.

Derivatives are securities under the SCRA and hence the regulatory

framework under the SCRA governs the trading of derivatives. The

Securities Contracts (Regulation) Act, 1956 (SC(R) A) defines derivative

to include

1. 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.

2. A contract, which derives its value from the prices, or index of

prices, of underlying securities.

Derivative is a financial instrument, which derives its value from an

underlying asset. The underlying assets can be stock, bonds, currency,

commodities, metals even intangible, and pseudo assets like stock

indices.

Derivatives can be of different types like future, option, swap, caps,

floor, collars etc. The most popular derivative instruments are futures and

options.


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There are newer derivatives that are becoming popular like weather

derivatives and natural calamity derivatives. These are used as a hedge

against any untoward harpings because of natural causes.

What exactly is meant by, Derives its value from an assets?

What the phrase means is that the derivative on its own doesnt

have any value. It is considered important because of importance of

underlying. When we say an Infosys future or Infosys option, these carry a

value only because of the value of Infosys.

What are financial derivatives?

Financial derivatives are instruments that derive their value from

financial assets. These assets can be stock, bonds, currency etc. Thederivatives can be forward rate agreements, futures, options, swaps etc.

As stated earlier, the most traded instruments are futures and options.

What kind of people will use derivatives?

Derivative will find use for the following set of people.

Speculators: People who buy or sell in the market to make profit. If

you will the stock price of reliance is expected to go up to Rs. 400 in 1

month, one can buy 1-month future of reliance at Rs. 350 and make

profit.


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Hedgers: People who buy or sell to minimize their losses. For

example, an importer has to pay US $ to buy goods and rupee is expected

to fall by Rs. 50/$ from Rs. 48/$, then the importer can minimize his

losses by buying a currency future at Rs. 49/$.

Arbitrageurs: People who buy or sell to make money on price

differential in different market. For example futures price is simply the

current price plus interest cost. If there is any change in interest, it

presents an arbitrage opportunity.

Basically, every investor assumes one or more of the above roles

and derivatives are a very good option for him.

Derivative markets perform a number of economic functions.

Prices in an organized derivatives market reflect the perception of

market participants about the future and lead the prices of

underlying to the perceived future level. The prices of derivativesconverge with the prices of the underlying at the expiration of the

derivative contract. Thus derivatives help in discovery of future as

well as current prices.

The derivatives market helps to transfer risks from those who have

them but may not like them to those who have an appetite for them.

Derivatives, due to their inherent nature, are linked to the underlying

cash markets. With the introduction of derivatives, the underlying

market witnesses higher trading volumes because of participation by

more players who would not otherwise participate for lack of an

arrangement to transfer risk.


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Speculative traders shift to a more controlled environment of the

derivatives market. In the absence of an organized derivatives

market, speculators trade in the underlying cash markets. Margining,

monitoring and surveillance of the activities of various participants

become extremely difficult in these kinds of mixed markets.

An important incidental benefit that flows from derivatives trading is

that it acts as a catalyst for new entrepreneurial activity. Derivatives

have a history of attracting many bright, creative, well-educated

people with an entrepreneurial attitude. They often energize others

to create new businesses, new products and new employment

opportunities, the benefit of which are immense.

Derivatives markets help increase savings and investment in the

long run. The transfer of risk enables market participants to expand

their volume of activity.

How has this market developed over time?

Derivatives have been a recent development in the Indian financial

markets. But there have been derivatives in commodities market also.

There is a cotton and oilseed future in Mumbai, Soya future in Bhopal,

pepper futures in Cochin, coffee futures in Bangalore etc. But the players

in this market are restricted to farmers and industries, which need these

as an input to protect themselves from the vagaries of agriculture sector.

Globally too, the first derivatives started with the commodities, way

back in 1984. Financial derivatives are relatively late development,


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coming into existence only in the 1970s. The first exchange where

derivatives were traded is the Chicago Board of Trade (CBOT).

In India, National Stock Exchange (NSE) introduced the first

derivatives in June 2000. The first derivatives were Index Future. The

index used was Nifty. Option trading was started in June 2001, for index

as well as stock. In November 2001, futures on stock were allowed.

Currently, there are 30 stocks on which derivative trading are allowed.

The trading is done on the exchange in the F&O (Future & Option)

segment. Index F&O is also traded in the market. The indices traded are

the Nifty and the Sensex.

Forward Contracts

A forward contract is an agreement to buy or sell an asset on a

specified date for a specified price. One of the parties to the contract

assumes a long position and agrees to buy the underlying asset on acertain specified future date for a certain specified price. The other party

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

for the same price. Other contract details like delivery date, the parties to

the contract negotiate price and quantity bilaterally. The forward

contracts are normally traded outside the exchanges.

The salient features of forward contracts are:

They are bilateral contracts and hence exposed to counter party risk.

Each contract is custom designed, and hence is unique in terms of

contract size, expiration date and the asset type and quality.

The contract price is generally not available in public domain.


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On the expiration date, the contract has to be settled by delivery of

the asset.

If the party wishes to reverse the contract, it has to compulsorily go

to the same counter-party, which often results in high prices being

charged.

However forward contracts in certain markets have become very

standardized, as in the case of foreign exchange, thereby reducing

transaction costs and increasing transactions volume. This process of

standardization reaches its limit in the organized futures market.

Limitations of forward markets

Forward markets world-wide are affected by several problems:

Lack of centralization of trading

Iliquidity

Counterpart risk

Futures Contracts

Futures markets were designed to solve the problems that exist in

forward markets. A futures contract is an agreement between two parties

to buy or sell an asset at a certain time in the future at a certain price. But

unlike forward contracts, the futures contracts are standardized and

exchange traded. To facilitate liquidity in the futures contracts, the

exchange specifies certain standard features of the contract. It is a

standardized contract with standard underlying instrument, a standard

quantity and quality of the underlying instrument that can be delivered,

(or which can be used for reference purposes in settlement) and a

standard timing of such settlement. A futures contract may be offset prior


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to maturity by entering into an equal and opposite transaction. More than

99% of futures transactions are offset this way.

The standardized items in a futures contract are:

Quality of the underlying

Quantity of the underlying

The date and the month of delivery

The units of price quotation and minimum price change

Location of settlement

Distinction between futures and forwards contracts

Forward contracts are often confused with futures contracts. The

confusion is primarily because both serve essentially the same economic

functions of allocating risk in the presence of future price uncertainty.

However futures are a significant improvement over the forward contracts

as they eliminate counter party risk and offer more liquidity

Distinction between futures and forwardsFutures Forwards Trade on an organized

exchange

OTC in nature

Standardized contract terms Customized contract termsMore liquid Less liquidRequires margin payments No margin paymentFollows daily settlement Settlement happens at end of

period.


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What are index futures?

Futures contracts started as a way farmers could sell their crops in

advance of harvest to lock in a good price or to raise funds a few months

before the crop was ready for market. The index futures we trade are

traded on the same exchanges where agricultural commodity futures are

still traded. The Chicago Mercantile exchange defines index futures as

"legally binding agreements to buy or sell the cash value of the

underlying Index at a specific future date." That's a big help, right? Let me

see if I can do any better with some bulleted facts which should answer

most questions:

Index futures are a financial instrument called a "futures contract"

with a value based on whatever stock index they represent. Today

there is no paper contract, just a book keeping entry, but the term

contract is still used.

The cash value of an index futures contract is based on the

underlying stock index multiplied by a fixed number plus a

premium, which represents the income that the same money would

have earned if invested elsewhere.

The value of the index futures contract fluctuates continuously

throughout the day as the underlying stock index changes. The

values of the stock indexes are recalculated every second.

Index futures are traded on an exchange. Today this often means

an electronic exchange with no actual trading floor.

The steps in a futures index transaction normally include

transmitting an order to a broker, from the broker to the exchange,matching each buy order with a sell order, transmitting confirmation

of trade time and price back from the exchange to the broker and

from the broker to the trader.


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Index futures orders can be placed by phone or fax, but most orders

today are placed from a PC connected to the Internet.

A transaction in the more heavily traded index futures on an

electronic exchange typically takes 2-10 seconds, including all the

steps from origination to confirmation.

Unlike commodity futures, there is no physical product, so never a

phone call like, "Where do you want this 5,000 bushels of beans?"

The only thing that changes hands are bookkeeping entries on an

account statement.

Index futures can be bought or sold (or sold short) by anyone who

has an account with a futures broker.

The trader doesn't know the other party involved in the transaction,

only that the transaction was completed.

What is Stock Index Future?

Stock index futures have some special institutional features. First,

settlement, even on the delivery date, is in cash. The seller simply

delivers to the buyer the cash difference between the closing level of the

underlying index and the futures price. This cash settlement feature is

adopted because it is impractical to deliver all the stocks in the index in

their correct proportions. Indeed, for some contracts, cash delivery is not

just an alternative, but a necessity; for example, when the underlying

variable is not an asset at all but just a number, such as the CPI-W

(Consumer Price Index-Wage Earners, on which a now discontinued

contract was created in 1985 by the Coffee, Sugar and Cocoa Exchange)

or the Property Claims Services National Catastrophe Index.


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Second, determination of its futures price depends on an estimate

of the remaining cash dividends on the underlying index through

delivery. Estimating cash dividends is not difficult over a one-year horizon

since cash dividends for individual stocks are largely predictable from a

firms past behavior, and because the law of large numbers tends to

cause errors in individual predictions to wash out. Examined over shorter

intervals, for US stocks, dividend payments are remarkably lumpy. In

particular, the ex-dividend dates of stocks tend to be concentrated in the

first two weeks of the mid-month of each calendar quarter (February,

May, August, November) a fact that is worth careful consideration for

accurate futures price evaluation.

What is Index Option?

The S&P 500 Index traded on the Chicago Board Options Exchange(CBOE) is an important example of index options. These are similar to

S&P 500 Index futures, except that the buyer has the right, but not the

obligation, to pay for and take delivery of 100 times the cash amount of

the future level of the Index on a preset future expiration date. The

option buyer will then choose not to take delivery, and no cash flow

would occur. However, the option buyer would net a loss (and the option

seller a corresponding profit) since the buyer would not recover the initial

price he paid the seller for the option.

Exchange-traded options often have special features, which make

them more complex. For example, S&P 100 Index options listed on the

CBOE can be used to buy the underlying asset by paying the strike price


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at the market closing on any business day prior to and including the

expiration date. S&P 500 Index options, which can only be exercised on

the expiration date, are termed European options, while S&P 100 Index

options (like options on individual common stocks), which can be

exercised on any business day through and including the expiration date,

are termed American options.

Exercise of most options and futures results in delivery of the

underlying asset. Exercise of S&P Index options (on the 100 or the 500),

however, is settled in cash because it is impractical to deliver all the

stocks in the S&P 100 or 500 Index in their exact proportions. Cash

settlement upon exercise means that the call buyer receives in dollars

100 times the difference between the closing level of the S&P 100 or 500

Index and the strike price.

COMPANY PROFILE

INDIA INFOLINE Pvt.Ltd:

The India Infoline Group is committed in placing the Investor First,

by continuously striving to increase the efficiency of the operations as

well as the systems and processes for use of corporate resources in such

a way so as to maximize the value to the stakeholders. The Group aims at

achieving not only the highest possible standards of legal and regulatory

compliances, but also of efficient effective management.

PROFILE OF INDIA INFOLINE:

In 1995, Nirmal Jain founded his own independent financial research

company, now known as India Infoline Ltd. India Infoline Ltd Launched on


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11 May 1999; www.indiainfoline.com is Indias leading and most

comprehensive business and financial information website.

www.5paisa.com is subsidiary company of India Infoline Ltd. Launched for

online trading in mid-2000. The 5paisa trading interface is one of the most

advanced platforms available to retail investor in India. The site made

available quality information and analysis - earlier restricted to a few

people - to the common man absolutely free.

The India Infoline group, comprising the holding company, India

Infoline Ltd and its wholly owned subsidiaries offers the entire gamut of

investment products ranging from Equities and derivatives trading,

Commodities trading, Portfolio Management Services, Mutual Funds, Life

Insurance, Fixed deposits, Government bonds and other small savings

instruments. India Infoline also owns and manages the websites,

www.indiainfoline.com and www.5paisa.com. India Infoline Ltd is a

company listed on both the leading stock exchanges in India namely the

Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE).

The India Infoline group has a significant presence across the country

owing to its 125 offices across 45 cities across India. All these offices arenetworked and are connected with the corporate office in Mumbai.

Post deregulation of the insurance sector, India Infoline Ltd became

one of the first corporate agents to be licensed by IRDA and have tied up

with ICICI Prudential Life Insurance Company. ICICI Prudential Life

Insurance Company Ltd. is the leading private sector insurance player and

India Infoline ltd. is their leading corporate agent.

KEY MILESTONES

Incorporated on October 18, 1995 as Probity Research & Services


23/101

Launched Internet portal www.indiainfoline.com in May 1999

Commenced distribution of personal financial products like Mutual

Funds and RBI Bonds in April 2000

Launched online trading in shares and securities branded aswww.5paisa.com in July 2000

Started life insurance agency business in December 2000 as a

Corporate Agent

Launched stock messaging service in May 2003

Acquired commodities broking license in March 2004

Launched portfolio management services in August 2004

Listed on NSE and BSE on May 17, 2005

Acquired 75% stake holding in Money tree Consultancy services in

October 2005

Acquired 100% equity of Marchmont Capital Advisors Pvt. Ltd in

December 2005

DSP Merrill Lynch Capital subscribed to convertible bonds

aggregating Rs.80 crores in December 2005. Their current stake in

India Infoline is a little over 14% as on 31

st

March 2007. Bennett Coleman & Co Ltd (BCCL) invested Rs.20 crores in India

Infoline by way of preferential allotment in December 2005.

Became a depository participant of CDSL in June 2006.

Merger of India Infoline Securities Private Limited with India Infoline

Limited in January 2007.

Entered into an alliance with Bank of Baroda for Baroda for Baroda e-

trading in February 2007. IRDA license for insurance Broking in April 2007.

VISION:

Company vision is:
http://www.indiainfoline.com/http://www.indiainfoline.com/http://www.indiainfoline.com/http://www.indiainfoline.com/http://www.indiainfoline.com/http://www.5paisa.com/http://www.5paisa.com/http://www.5paisa.com/http://www.5paisa.com/http://www.5paisa.com/http://www.indiainfoline.com/http://www.5paisa.com/


24/101

To be the premier provider of investment advisory and financial

planning services in India.

To be a leading investment intermediary for transactions through

both online and offline medium.

PUNCH LINE: ITS ALL ABOUT MONEY, HONEY!

Corporate Office:

India Infoline Ltd

Building No 75, Nirlon Complex,

Off Western Express Highway,

Goregaon (East), Mumbai - 400063

Tel : +91-22-56489000

Fax : +91-22-26850451

E Mail : [email protected]

Website : www.indiainfoline.com

India Infoline Group Corporate Structure

India Infoline Securities Pvt.Ltd

Equities & Derivatives Broking

Depository services

Portfolio Management Services

India Infoline .com Distribution co. Ltd.

Mutual Funds

RBI Bonds

Fixed Deposits Etc.

India Infoline Insurance Services ltd.
mailto:[email protected]://www.indiainfoline.com/index_1024_main.shtmlmailto:[email protected]://www.indiainfoline.com/index_1024_main.shtml


25/101

Corporate agents for ICICI Prudential Life Insurance

Company Ltd.

India Infoline Commodities Pvt. Ltd

Commodities Broking

India Infoline Investment Services Pvt, Ltd.

Margin Funding & Financing

ABOUT INDIA INFOLINE LTD,

The India Infoline Group, comprising the holding company, India

Infoline Ltd. And its wholly all subsidiaries offer the entire gamut of

investment products ranging from Equities and Derivatives trading,

Commodities trading, Portfolio management services, Mutual Funds, Life

Insurance, Fixed Deposit, GOI bonds and other small savings instruments.

It also owns & manages websites, www.indiainfoline.com &

www.5paisa.com

India Infoline Ltd. is a company listed on both the leading stock

exchanges in India Stock Exchange Mumbai (BSE) and National Stock

Exchange (NSE) Delhi.
http://www.indiainfoline.com/http://www.5paisa.com/http://www.indiainfoline.com/http://www.5paisa.com/


26/101

India Infoline is forerunner in the field of equity research. India

Infolines research is acknowledged by none other than Forbes as Best of

the Web a read for investors in ASIA. India Infolines research is available

not just over the internet but also on Inter National wire services like

Bloomberg.

India Infoline group has significant presence across the country

owing to its 77 offices across 36 cities across India. All these offices are

networked and connected with the corporate office in Mumbai. The group

has invested significantly in technology and research, the result of which

are there for everyone to see the 5paisa trading interface is one of the

most advanced platform available to retail investor in India.

The group has membership on BSE and NSE for equities trading and on MCX and

NCDEX for commodities trading. It has a SEBI license for Portfolio Management under

which various schemes are offered which has been consistently beating the benchmark

indices since inception.

Various software of India Infoline Ltd:

The Trader Terminal (Advance):

The TT(Advance) is the amazing software, which offers you all that

you could possibly want to trade in the Indian stock markets. With the TT

(Advance), you can trade in both, the stock Exchange, Mumbai (BSE) and

the National stock Exchange (NSE) on the same screen and also in the

segment, cash as well as Derivatives. It offers real-time streaming quotes

and Intra-day charts.


27/101

You can keep a watch on as many scripts as you want to with the

Market watch feature. You have online access to your DP account, your

ledger and there is also the facility to transfer funds online owing to our

tie-up with the leading Internet - enabled banks in the country. Our world

class research powers your trading with money making intra-day ideas

which are based on research which has been acknowledged by none other

than forbs as Best of the web and Must read for investors

The brokerages for online trading

Intraday trading 0.05%

Delivery 0.25%

F & O 0.05%

Odin Diet:

The Odin Diet terminal provides you with the facility to trade not

just in the Stock Exchange, Mumbai (BSE) and the National Stock

Exchange (NSE) and in the cash as well as the Derivatives segment but

also in the commodities segment in the Multi Commodity Exchange

(MCX) and the National Commodity & Derivatives Exchange (NCDEX); allon the same screen. Though it doesnt provide charting features, it

provides a cleaner interface for faster order execution, a facer well

appreciated by the true blue trader of today.


28/101

Strengths That Set Us Apart:

We have been in information services for the last seven

years and have assiduously built the data and skill sets necessaryfor the business.

We have leveraged our content to create the India Infoline brand,

which is synonymous with high quality and credible information on

business and finance.

Our top management team represents a skill set, which is mutually

exclusive but collectively exhaustive.

The strength of the organization has been to continuously

innovate and reinvent itself.

RESEARCH METHODOLOGY

Research Problem:

Awareness, preference and potential growth of derivative market

with special reference to equity only. This statement focuses on the

awareness of derivatives, whether people prefer to invest in derivatives or

not and along with that it also focuses on potential growth of derivatives

in future.

Objectives:


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The sole effort behind carrying out this study was to find out what is

the growth of derivatives, awareness among people, and preference of

investors who are investing in derivatives.

1. To know awareness of derivatives among the investors.

2. To know preference of investors for investment in derivative

market.

3. To know potential growth of derivative market.

Research Design:

(A) Research Type:

I have used descriptive research design for my project.

As we are trying to study awareness, preference and potential growth of

derivative market, it shows how many people are aware about derivatives

and from them how many do actual investment in them and from them

we came to know the potential growth of derivatives market.

(B) Research Plan:

Primary data is collected through survey model. The survey is done

through questionnaire. With the help of this model we can come to know

actually what customers known and how they invest in derivatives.

(C) Sample Design:

Universe is entire group of items that researcher wishes to study

and about which help to plan to generalize. For my study the universe is


30/101

people who came to Bank of Baroda for opening demat a/c and investors

of India Infoline. I have used non probability convenience descriptive

sampling design.

(D) Sample Type:

The type of sampling is Non Probability convenience sampling

because the population surveyed is according to the convenience and

looking to the time and cost factors.

Data Analysis:

Data Analysis was be done using SPSS software (Stastical

Package for Social Science). This will be used because it gives us

accurate and fast result. Also multiple features of SPSS will help in

applying various tests to reach to accurate conclusions.

STATISTICAL TESTS TO BE USED

Measurement of Central Tendency:

Mean is used when data the types of data are interval, median is

used when data are ordinal and mode is used when data are Nominal

type.

One Sample T-test:


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The One-Sample T Test is used to test whether the mean of a single

variable differs from a specified constant. The average difference

between each data value and the hypothesized test value, at test that

tests that this difference is 0, and a confidence level for this test may

either 95% or 90%. One sample T-test is used when the type of data are

INTERVAL in nature.

DATA ANALYSIS AND INTERPRETATION

Q-1 Are you aware of derivative market?

( ) Yes ( ) no


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PARTICULAR FREQUENCY PERCENTAGEYES 75 75.00NO 25 25.00TOTAL 100 100.0

AWARENESS

YES

NO

Inference: From the graph it can be infer that out of 100 investors 75%

are aware about derivative and 25% are not aware about derivative.

Q-2 Reason for non-awareness of derivative market?

1.) Lack of Knowledge:

Particular Frequency PercentageUnmarked 96 96.0Marked 4 4.0Total 100 100.0


33/101

lack of knowledge

unmarked

marked

Inference: from the graph it can be inferred that most of

respondent denied that lack of knowledge is not a reason of non-

awareness.

2.) High Risk:


high risk

unmarked

marked

Inference: from the above graph it can be inferred that high risk is

one of the reason for not investing in derivative market.

3.) Huge Investment:



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huge investment

unmarked

marked

Inference: From the graph it can be inferred that are also take

huge investment as their reason for non-awareness.

Q-3 Have you invested in derivative market?

( ) Yes ( ) No

PARTICULAR FREQUENCY PERCENTAGE


35/101

YES 77 77.00NO 23 23.00TOTAL 100 100.0

investment

YES

NO

Inference: from the graph it can be inferred that out of 100, 77%

are investing in derivative.

Q-4 Reason for not investing in derivative.1. High risk

Particular Frequency Percentage

Agree 3 3.0


36/101

Strongly agree 20 20.0

high risk

Agree

Strongly agree

Inference: from the graph, you can see that 20% people are sayingthat reason for non-investment in derivative is high risk.

T Test

One-Sample Statistics

Particular N MeanStd.

Deviation

Std.ErrorMean

4.HIGHRISK

100 1.12 2.066 .207

Null Hypothesis (HO): There is no significant difference between

calculated mean and hypothesized mean (1). In other words, wehypothesize that reason for not investing in derivative market is

high risk.

i.e. Ho : x = = 1

Alternative Hypothesis (H1): There is significant difference

between calculated mean and hypothesized mean. In other words

we hypothesize that reason for not investing in derivative market is

not high risk.

i.e. H1: x , i.e. H1: x 1


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Statistical Test: one sample t-test is chosen because the

measurement of data is interval in nature.

Significance level: 0.05

Test Value = 1

Particular t df Sig. (2-tailed)

MeanDifference

95% ConfidenceInterval of the

DifferenceLower Upper Lower Upper Lower Upper

4.HIGHRISK

.581 99 .563 .120 -.29 .53

Inference:Here the test is performed at 95% significance level and the t-

value comes out as .563 which is grater than 0.05, it means that

the null hypothesis H0 is accepted and it can be said that there is

no significant difference between calculated mean and

hypothesized mean. It means that high risk is the reason for not

investing in derivative market.

2. Margin Money:

Particular Frequency PercentageNeutral 5 5.0

Agree 5 5.0

Strongly agree 12 12.0


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margin money

Neutral

Agree

Strongly agree

Inference: from the graph, you can see that 12% people are saying

that reason for non-investment in derivative is margin money.

T Test


N MeanStd.

Deviation

Std.ErrorMean

4.MARGINMONEY

100 .88 1.707 .171


calculated mean and hypothesized mean (1). In other words, we

hypothesize that reason for not investing in derivative market is

Margin money.

i.e. Ho : x = = 1




not margin money..i.e. H1: x , i.e. H1: x 1




39/101


Test Value = 1


MeanDifference



4.MARGINMONEY

-.703 99 .484 -.120 -.46 .22

Inference:

Here the test is performed at 95% significance level and the t-

value comes out as .484 which is grater than 0.05, it means thatthe null hypothesis H0 is accepted and it can be said that there is


hypothesized mean. It means that margin money is the reason for

not investing in derivative market.

3. Tax:

Particular Frequency PercentageStrongly

disagree

9 9.0

Disagree 3 3.0Neutral 11 11.0


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tax

Strongly disagree

Disagree

Neutral

Inference: from the graph, you can see that 11% people are saying

that they are neutral stage.

T Test


Particular N Mean

Std.Deviatio

nStd. Error

Mean4.TAX 100 .48 .990 .099

One-Sample Test



hypothesize that reason for not investing in derivative market is tax.

i.e. Ho : x = = 1




not margin money.

i.e. H1: x , i.e. H1: x 1


41/101




Test Value = 1

Particular t df

Sig. (2-tailed)

MeanDifference



4.TAX -5.254

99 .000 -.520 -.72 -.32

Inference:


value comes out as .000 that is less than 0.05, it means that the

null hypothesis H0 is rejected and alternative hypothesis is

accepted.

4. Lot Size:

Particular Frequency

Percentage

Stronglydisagree

7 7.0

Disagree 3 3.0


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Neutral 5 5.0Agree 2 2.0Stronglyagree

6 6.0

lot size

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

Inference: from the graph, you can see that most of the people are

saying that reason for non-investment in derivative is not lot size.

T Test


Particular N Mean

Std.Deviatio

n

Std.ErrorMean

4.LOTSIZE 100 .66 1.430 .143

One-Sample Test



hypothesize that reason for not investing in derivative market is Lot

size.

i.e. Ho : x = = 1




not Lot size.


43/101

i.e. H1: x , i.e. H1: x 1




Test Value = 1


MeanDifference



4.LOTSIZE -2.378

99 .019 -.340 -.62 -.06

Inference:





hypothesized mean. It means that lot size is the reason for not

investing in derivative market.

Q-5 What are the objectives of investment in derivativemarket?

1. High return


44/101

Particular Frequenc

y

Percent

Some what not

preferred

2 2.0

Neutral 11 11.0Some what preferred 23 23.0Most preferred 64 64.0Total 100 100.0

high return

Some w hat not

preferred

Neutral

Some w hatpreferred

Most preferred

Inference: From the graph it can be inferred that 64%people

consider high return as their objective of investing in derivative.

Measurement of Central tendency

Particular ValueMean 4.49Median 5.00Mode 5

Inference:

Mean value is 4.49 that mean most of investors take high return as

their objective of investing in derivative.

Median is 5.00 that mean investors consider high return as their

objective of investing in derivative.


45/101

Mode is 5.00 that mean investors take high return as their

objective of investing in derivative.

T Test


Particular N Mean

Std.

Deviation

Std.

Error

Mean5.HIGH

RETURN100 4.49 .772 .077



hypothesize that high return is one of the objective of investing in

derivatives.

i.e. Ho : x = = 5



high return is not one of the objectives of investing in derivatives.

i.e. H1: x , i.e. H1: x 5




Test Value = 5


46/101

Particular t df

Sig. (2-

tailed)

Mean

Differen

ce

95% Confidence

Interval of the

Difference

Lowe

r Upper Lower Upper Lower Upper5.HIGH

RETURN

-

6.60799 .000 -.510 -.66 -.36

Inference:



null hypothesis H0 is rejected.

2. Hedge the risk:

Particulars

Frequenc

y

Percent

Some what not

preferred

4 4.0


HEDGE THE RISK

some w hat not

preferred

neutral

most preferred

some what

preferred


47/101

Inference:

From the graph it can be inferred that they are investing in

derivative because it hedge the risk.



Inference:

Mean value is 4.15 that mean investors investing in derivative

because it hedges the risk.

Median is 4.00 that mean investors investing in derivative because

it hedges the risk.

Mode is 4.00 that mean investors investing in derivative because

it hedges the risk.

T Test


Particular N Mean

Std.

Deviatio

n

Std.

Error

Mean

5. HEDGE

RISK100 4.15 .947 .095

One-Sample Test



48/101


hypothesize that hedge the risk is one of the objective of investing

in derivative.

i.e. Ho : x = = 4



hedge the risk is not one of the objectives of investing in derivative.

i.e. H1: x , i.e. H1: x 4




Test Value = 4

Particular T df

Sig. (2-

tailed)

Mean

Differenc

e

95%

Confidence

Interval of the

Difference

Lowe

r Upper Lower Upper Lower Upper5. HEDGE

RISK1.584 99 .116 .150 -.04 .34

Inference:


49/101





hypothesized mean. It means that investors investing in derivative

because it hedge the risk.

3. More reliable:

Particular

Frequency Percentage

Least Preferred 4 4.00Some what not preferred 6 6.00Neutral 43 43.00Some what preferred 35 35.00Most preferred 12 12.00Total 100 100.0

MORE RELIABLE

Least Preferred

Some w hat not

preferred

Neutral

Some w hat

preferred

Most preferred

Inference:

From the graph it can be inferred that investors are at neutral

stage when we say that more reliable is one of the objective for

investing in derivative.


50/101


Particular Value

Mean 3.45Median 3.00Mode 3

Inference:

Mean value is 3.45 that mean investors are at neutral when we say

that investing in derivative is more reliable.

Median is 3.00 that mean investors are at neutral when we saythat investing in derivative is more reliable.

Mode is 3.00 that mean investors are at neutral when we say that

investing in derivative is more reliable.

T Test


Particular N Mean

Std.

Deviation

Std.Error

Mean5.MORE

RELIABLE100 3.45 .925 .093

One-Sample Test

Null Hypothesis (HO): There is no significant difference betweencalculated mean and hypothesized mean (3). In other words, we

hypothesize that investors are agree that they are investing

because derivative are more reliable.

i.e. Ho : x = = 3


51/101


between calculated mean and hypothesized mean. In other words,

we hypothesize that investors are not agree that they are investing


i.e. H1: x , i.e. H1: x 3




Test Value = 3

Particular T df

Sig. (2-

tailed)

Mean

Differen

ce

95% Confidence

Interval of the

Difference

Lowe

r Upper Lower Upper Lower Upper5.MORE

RELIABLE4.864 99 .000 .450 .27 .63

Inference:

Here the test is performed at 95% significance level and

the t-value comes out as .000 that is less than 0.05, it means that

the null hypothesis H0 is rejected.

T Test


Particular N Mean Std.

Deviation

Std.

Error


52/101

Mean5.MORE

RELIABLE100 3.45 .925 .093

One-Sample Test



hypothesize that investors are agree that they are investing


i.e. Ho : x = = 4



we hypothesize that investors are not agree that they are investing


i.e. H1: x , i.e. H1: x 4




Test Value = 4

Particular T df Sig. (2-tailed)

MeanDifferen

ce


Difference

Lower Upper Lower Upper Lower Upper5.MORERELIABLE

-5.944 99 .000 -.550 -.73 -.37


53/101

Inference:

Here the test is performed at 95% significance level and

the t-value comes out as .000 that is less than 0.05, it means that

the null hypothesis H0 is rejected.

4. Safe to invest:

Particular


Least Preferred 8 8.00Some what not preferred 27 27.00Neutral 38 38.00

Some what preferred 15 15.00Most preferred 12 12.00Total 100 100.0

SAFE TO INVEST

Least Preferred

Some w hat not

preferred

Neutral

Some w hatpreferred

Most preferred

Inference:


54/101


stage when we say that derivative are safe to invest.



Inference:

Mean value is 2.96 that mean investors are at neutral stage whenwe say that derivatives are safe to invest.

Median is 3.00 that mean investors are at neutral stage when we

say that derivatives are safe to invest.

Mode is 3.00 that mean investors are at neutral stage when we say

that derivatives are safe to invest.

T TestOne-Sample Statistics

Particular N Mean

Std.

Deviation

Std.

Error

Mean5.SAFE INV. 100 2.96 1.109 .111

One-Sample Test




55/101

hypothesize that investors are investing because derivatives are

safe to invest.

i.e. Ho : x = = 3



they are not believe that derivative are safe to invest.

i.e. H1: x , i.e. H1: x 3




Test Value = 3

Particular t df

Sig. (2-

tailed)

Mean

Differen

ce

95% Confidence

Interval of the

Difference

Lower Upper5.SAFE

INV.-.361 99 .719 -.040 -.26 .18

Inference:





hypothesized mean. It means that investors are at neutral stage

when we say that derivative is safe to invest.


56/101

5. More liquid:

Particular



MORE LIQUID

Particular

Least Preferred

Some what notpreferred

Neutral

Some what preferred

Most preferred

Inference:


stage in considering more liquid as an objective of investing in

derivatives.



57/101


Inference:

Mean value is 2.94 that mean investors are at neutral stage when

we say that derivatives are more liquid.

Median is 3.00 that mean investors are at neutral stage when we

say that derivatives are more liquid.

Mode is 3.00 that mean investors are at neutral stage when we say

that derivatives are more liquid.

T Test


Particular N Mean

Std.

Deviation

Std.

Error

Mean5.MORE

LIQUID100 2.94 1.317 .132

One-Sample Test


calculated mean and hypothesized mean (3). In other words, wehypothesize that investors are investing in derivative due to its

liquidity.

i.e. Ho : x = = 3


58/101



we hypothesize that investors are investing in derivative are not

liquid.

i.e. H1: x , i.e. H1: x 3




Test Value = 3

Particular t df

Sig. (2-

tailed)

Mean

Differen

ce

95% Confidence

Interval of the

Difference

Lower Upper5.MORE

LIQUID-.456 99 .650 -.060 -.32 .20

Inference:





hypothesized mean. It means that investors are at neutral stage

when we say that derivative is more liquid.


59/101

Q 6 give your preference of investment in derivative

instrument.

1.) Index future:

Particular


Some what not preferred 3 3.00Neutral 14 14.00Some what preferred 21 21.00Most preferred 62 62.00

Total 100 100.0

INDEX FUTURE

Some w hat not

preferred

Neutral

Some w hat

preferred

Most preferred

Inference:

From the graph it can be inferred that most of the investors

are prefer to invest in Index future.



Inference:


60/101

Mean value is 4.42 that mean investors are most preferred to

invest in Index future.

Median is 5.00 that mean investors are most preferred to invest in

Index future.

Mode is 5.00 that mean investors are most preferred to invest in

Index future.

T Test


Particular N Mean

Std.

Deviation

Std.

Error

Mean6.INDEX

FUTURE100 4.42 .843 .084

One-Sample Test



hypothesize that investors prefer to invest in Index future.

i.e. Ho : x = = 5



investors will not prefer to invest in Index future.

i.e. H1: x , i.e. H1: x 5


61/101




Test Value = 5

Particular T df

Sig. (2-

tailed)

Mean

Differen

ce

95% Confidence

Interval of the

Difference

Lowe

r Upper Lower Upper Lower Upper6.INDEX

FUTURE

-

6.88099 .000 -.580 -.75 -.41

Inference:



null hypothesis H0 is rejected. It can be said that there is significant

difference between calculated mean and hypothesized mean.

T Test


Particular N Mean

Std.

Deviation

Std.

Error

Mean6.INDEX

FUTURE 100 4.42 .843 .084

One-Sample Test



62/101


hypothesize that investors prefer to invest in Index future.

i.e. Ho : x = = 4



investors will not prefer to invest in Index future.

i.e. H1: x , i.e. H1: x 4




Test Value = 4


MeanDifferen

ce


Difference

Lowe


FUTURE 4.982 99 .000 .420 .25 .59

Inference:





1. Stock future:


63/101

Particular



STOCK FUTURELeast Preferred

Some w hat not

preferred

Neutral

Some what

preferred

Most preferred

Inference:

From the above graph it can be inferred that Stock future is

some what preferred by the investors.



Inference:

Mean value is 3.48 that mean investors are somewhat preferred to

invest in stock future.

Median is 4.00 that mean investors are somewhat preferred to



64/101

Mode is 4.00 that mean investors are somewhat preferred to


T Test


Particular N Mean

Std.

Deviation

Std.

Error

Mean6.STOCK

FUTURE100 3.48 1.049 .105

One-Sample Test



hypothesize that investors prefer to invest in stock future.

i.e. Ho : x = = 4



investors will not prefer to invest in stock future.

i.e. H1: x , i.e. H1: x 4




Test Value = 4


65/101

Particular t df

Sig. (2-

tailed)

Mean

Differen

ce

95% Confidence

Interval of the

Difference

Lower Upper6.STOCK

FUTURE

-

4.95799 .000 -.520 -.73 -.31

Inference:





T Test


Particular N Mean

Std.

Deviation

Std.

Error

Mean6.STOCK

FUTURE100 3.48 1.049 .105

One-Sample Test



hypothesize that investors prefer to invest in stock future.

i.e. Ho : x = = 4



investors will not prefer to invest in stock future.


66/101

i.e. H1: x , i.e. H1: x 4




Test Value = 4

Particular T df

Sig.(2-

tailed)

MeanDifferen

ce


Difference

Lower Upper Lower Upper Lower Upper6.STOCK

FUTURE-4.957 99 .000 -.520 -.73 -.31

Inference:





2. Index option:

Particular


Least Preferred 1 1.00Some what not preferred 3 1.00



67/101

INDEX OPTION

Least Preferred

Some w hat not

preferred

Neutral

Some w hat

preferred

Most preferred

Inference:

From the above graph it can be inferred that most of the

investors some what preferredto invest in Index option.


Particular ValueMean 4.17Median 4.00

Inference:





T Test


Particular N Mean

Std.

Deviation

Std.

Error

Mean6.INDEX 100 4.17 .943 .094


68/101

OPTION

One-Sample Test



hypothesize that investors are somewhat preferred to invest in

Index option.

i.e. Ho : x = = 4

Alternative Hypothesis (H1): There is significant differencebetween calculated mean and hypothesized mean. In other words

we hypothesize that investors are not somewhat preferred to invest

in Index option.

i.e. H1: x , i.e. H1: x 4




Test Value = 4

Particular T df

Sig. (2-

tailed)

Mean

Differen

ce

95% Confidence

Interval of the

Difference

Lowe


OPTION1.802 99 .075 .170 -.02 .36

Inference:


69/101





hypothesized mean. It means that investors are some what

preferred to invest in Index option.

3. Stock option:

Particular




70/101

STOCK OPTION

Least Preferred

Some w hat not

preferred

Neutral

Some w hat

preferred

Most preferred

Inference:

From the graph it can be inferred that investors are somewhat

preferred to invest in stock option.



Inference:


invest in stock option.



Mode is 4.00 that mean investors are somewhat preferred to


T Test


Particular N Mean Std. Std.


71/101

Deviation

Error

Mean6.STOCK

OPTION100 3.49 1.219 .122

One-Sample Test



hypothesize those investors prefer to invest in Stock option.

I.e. Ho : x = = 4



we hypothesize that investors are not prefer to invest in Stock

option.

i.e. H1: x , i.e. H1: x 4




Test Value = 4

Particular T df

Sig. (2-

tailed)

Mean

Differen

ce

95% Confidence

Interval of the

Difference

Lowe

r Upper Lower Upper Lower Upper6.STOCK

OPTION

-

4.18599 .000 -.510 -.75 -.27


72/101

Inference:





T Test


Particular N Mean

Std.

Deviation

Std.

Error

Mean6.STOCK

OPTION100 3.49 1.219 .122

One-Sample Test



hypothesize that investors prefer to invest in Stock option.

I.e. Ho : x = = 3



we hypothesize that investors are not prefer to invest in Stock

option.

i.e. H1: x , i.e. H1: x 3


73/101




Test Value = 3


MeanDifference


Difference

Lower Upper LowerUppe

r Lower Upper6.STOCKOPTION

4.021 99 .000 .490 .25 .73

Inference:





Q 7 Give your preference in terms of investment inderivative market.

1. Short term:

Particular Frequency

Percentage

Least preferred 6 6.0Some what notpreferred

5 5.0



74/101

short term

Least preferred

Some w hat not

preferred

Neutral

Some w hat preferred

Most preferred

Inference:

From the graph it can be inferred that people prefer to invest

for short period of time.



Inference:


invest for short time.

Median is 5.00 that mean investors are most preferred to invest

for short time.

Mode is 5.00 that mean investors are most preferred to invest for

short time.

T Test



75/101

Particular N Mean

Std.

Deviation

Std.

Error

Mean7.SHORT

TERM 100 4.13 1.228 .123

One-Sample Test



hypothesize that investors are somewhat preferred to invest for

short time.

I.e. Ho : x = = 4



we hypothesize that investors are not somewhat preferred to invest

for short time.

i.e. H1: x , i.e. H1: x 4




Test Value = 4

Particular T df

Sig. (2-

tailed)

Mean

Differe

nce

95% Confidence

Interval of the

Difference


76/101

Lowe

r Upper Lower Upper Lower Upper7.SHORT

TERM1.059 99 .292 .130 -.11 .37

Inference:





hypothesized mean. It means that investors are somewhat

preferred to invest for short time.

2. Medium term:

Particular




77/101

MEDIUM TERM

Least Preferred

Some w hat not

preferred

Neutral

Some w hat

preferred

Most preferred

Inference:

From the above graph it can be inferred that most of the investors

are neutral stage to invest for short time.

Measurement of Central tendency:


Inference:

Mean value is 3.27 that mean investors are at neutral stage to

invest for medium term.

Median is 3.00 that mean investors are at neutral stage to invest

for medium term.

Mode is 3.00 that mean investors are at neutral stage to invest for

medium term.

T Test



78/101

Particular N Mean

Std.

Deviatio

n

Std.

Error

Mean7.MEDIUM

TERM 100 3.27 .863 .086

One-Sample Test



hypothesize that investors are at neutral stage to invest for medium

term.

I.e. Ho : x = = 3



we hypothesize that investors are not at neutral stage to invest for

medium term.

i.e. H1: x , i.e. H1: x 3




Test Value = 3

Particular T df

Sig. (2-

tailed)

Mean

Differ

ence

95% Confidence

Interval of the

Difference

Lowe

r Upper Lower

Uppe

r Lower Upper


79/101

7.MEDIUM

TERM3.129 99 .002 .270 .10 .44

Inference:

Here the test is performed at 95% significance level and the

p-value comes out as .002 that is less than 0.05, it means that the


difference between calculated mean and hypothesized mean. It

means that investors are not at neutral stage to invest for medium

term.

3. Long Term:

Particular Frequency Percentageleast preferred 11 11.0some what not preferred 4 4.0Neutral 29 29.0some what preferred 23 23.0most preferred 33 33.0Total 100 100.0


80/101

long term

least preferred

some w hat not

preferred

neutral

some w hat

preferred

most preferred

Inference:

From the graph it can be inferred that investors prefer to

invest for long period of time.

Measurement of Central tendency:

Particular ValueMean 3.63Median 4.00

Inference:

Mean value is 3.63 that mean investors are at neutral stage to

invest for long term.

Median is 4.00 that mean investors are at some what not prefer

stage to invest for medium term.

T Test


Particular N MeanStd.

Deviation

Std.ErrorMean

7.LONG 100 3.63 1.284 .128


81/101

TERM

One-Sample Test



hypothesize that

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