Table of content

1. Executive Summary……………………………………………...………………..2

2. Introduction to Portfolio Management……………………………………….3

 Meaning of Portfolio Management…………………………………..……4

 Phases of Portfolio Management…………………………………..………5

 Need for Portfolio Management………………………………….………..11

 Types of Portfolio Management………………………………….………..12

 Factors Affecting Investment Decision Making…………….………….13

 Factors Affecting Portfolio Management…………………….………….14

 Reasons for Invest in a Portfolio………………………………………….16

3. Introduction to Risk……………………………………………………………...17

 Meaning of Risk………………………………………………………….…..18

 Sources of Risk………………………………………………………………19

 Portfolio Helps in Diversification of Risk……………………………….22

 Types of Risk…………………………………………………………….……23

 Reason for Invest in A Portfolio……………………………………..……25

4. Review of Literature……………………………………………………….………27

5. Research Methodology………………………………………………….………..33

6. Data Analysis…………………………………………………………….………….37

7. Findings………………………………………………………………………………48

8. Suggestion……………………………………………………………….…………..50

9. Conclusion…………………………………………………………………………..52

10. References and Bibliography……………………………………..…………..53.

1
 EXECUTIVE SUMMARY

This study is based on mainly risk factor, which affects investors to invest in a
portfolio. Investment management, also referred to as portfolio management, is a
complex process or activity that may be divided into different phases. Investment
objective are expressed in terms of risk & return. Two broad choices are available
with respect to portfolio strategy known as an active strategy or a passive
strategy. An active strategy is followed by most investment professionals and
aggressive investors who strive to earn superior returns, after adjustment for
risk. The four principle vectors of an active strategy are: market timing, sector
rotation, security selection, and use of a specialized concept. A passive portfolio
strategy calls for creating a well diversified portfolio investor at a predetermined
level of risk and holding it relatively unchanged over time, unless it becomes
inadequately diversified or inconsistence with the investor’s risk-returns
preferences.

Investors have to periodically monitor and revise their portfolio. This usually
entails two things namely portfolio rebalancing and portfolio upgrading. The key
dimensions of portfolio performance evaluation are rate of return and risk.

Investment decisions are influenced by various motives. Most investors are

largely guided by the pecuniary motive of earning a return on their investment.
For earning returns investors have to almost invariably bear some risk.
Investment decision, therefore, involve a tradeoff between risk and return.

So this study mainly concentrates upon risk affect on investment decision. This
study mainly comprises portfolio management and how risk affects construction
of portfolio or investment decision in a portfolio. Portfolio management is mainly
requires to reduce the risk and increase performance of portfolio by better return

2
 Chapter – 1

Introduction

To

Portfolio Management

3
 Portfolio Management .

MEANING OF PORTFOLIO MANAGEMENT

A portfolio refers to a collection of investment tools such as stocks, shares,

mutual funds, bonds, and cash and so on depending on the investor’s
income, budget and convenient time frame.

Management in all business and organizational activities is the act of

coordinating the efforts of people to accomplish desired goals and
objectives using available resources efficiently and effectively.

The art of selecting the right investment policy for the individual in terms
of minimum risk and maximum return is called as portfolio management.
Portfolio management refers to managing an individual’s investment in the
form of bonds, shares, cash, mutual funds etc so that he earns the
maximum profits within the stipulated time frame.

Portfolio management refers to managing money of an individual under

the expert guidance of portfolio managers.

In a layman’s language, the art of managing an individual’s investment is

called as portfolio management.

Investing in securities such as shares, debentures and bonds is profitable

as well as exciting. It is rare to find investors investing their entire savings
in a single security. Instead, they tend to invest in a group of securities.
Such a group of securities is called portfolio.

Portfolio management deals with the analysis of individual securities as

well as with the theory and practice of optimally combining securities into
portfolio. As the economic and financial environment keeps changing, the
risk-return characteristics of individual securities as well as portfolios also
changes. This calls for periodic review and revision of investment portfolio
of investors. It is evident that rational investment activity involves creation
of an investment portfolio.

4
 Portfolio Management.

PHASES OF PORTFOLIO MANAGEMENT`

Portfolio management is a process encompassing many activities aimed at

optimizing the investment of one's funds. Phases of portfolio management
can be identified in this process.

Specification of investment objective & constraints

Choice of asset mix

Formulation of portfolio strategy

Security analysis

Portfolio analysis

Selection of securities

Portfolio execution

Portfolio revision

Portfolio evaluation

Figure no. – 1 – Phases of Portfolio Management

5
 Portfolio Management
.

1. Specification of investment objective & constraints: The first

step in the portfolio management process is to specify the
investment policy which summarizes the objectives, constraints, and
preferences of the investor. The investment policy may be expressed
as follows:

Objectives The commonly stated investment goals are:

 Income: To provide a steady stream of income through regular

interest/dividend payment.
 Growth: To increase the value the principal amount through capital
appreciation.
 Stability: To protect the principal amount invested from the risk of
loss.

Constraints & preferences In pursuing your investment objective,

which is specified in terms of return requirement and risk tolerance,
you should bear in mind the constraints arising out of or relating to the
following factors:

 Liquidity: Liquidity refers to the speed with which an asset can be

sold, without suffering any significant discount to its fair market
price.
 Investment horizon: The investment horizon is the time till the
investment or part thereof is planned to be liquidated to meet a
specific need.
 Taxes: Tax consideration has an important bearing on investment
decision because investor considers post tax return from an
investment.
 Regulations: While individual investors are generally not constrained
much by law, institutional investors have to conform to various
regulations.

6
 Portfolio Management
.

2. Selection of asset mix: Based on your objective and constraints,

you have to specify your asset allocation, that is, you have to decide
how much your portfolio has to be invested in each of the following
asset categories:
 Cash
 Bonds
 Stocks
 Real estate
 Precious metals
 Others

The risk-return relationship for various types of bonds & stocks can be
understood by following:

Figure no. – 2

Risk-Return Relation of Assets

7
 . Portfolio Management

3. Formulation of portfolio strategy: Two broad choices are available

in this respect, an active portfolio strategy or a passive portfolio
strategy. These strategies are described as follows:

Active portfolio strategy It is followed by most investment professionals

and aggressive investors who strive to earn superior returns, after
adjustment for risk. The four principal vectors of an active strategy as
follows:

 Market timing: Market timing is based on an explicit forecast of

general market movements. This involves departing from the normal
asset mix to reflect one’s assessment of the prospects of various
assets in the near future.
 Sector rotation: It is, however, used more commonly with respect to
the stock component of portfolio where it essentially involves shifting
the weightings for various sectors based on their assessed outlook.
 Security selection: Perhaps the most commonly used vector by
those who follows an active portfolio strategy, security selection
involves a search for under priced securities.
 Use of a specialized investment concept: It will help you to focus
your efforts on a certain kind of investment that reflects your
abilities & talent avoid the distractions of pursuing other
alternatives.

Passive Strategy: Basically it involves adhering to the following two

guidelines:

 Create a well diversified portfolio at a predetermined level of risk.

 Hold the portfolio relatively unchanged over time, unless it becomes
inadequately diversified or inconsistent with the investor’s risk
return preferences.

8
 . Portfolio Management

4. Securities analysis: There are two alternative approaches to

security analysis, namely fundamental analysis and technical
analysis. Fundamental analysis, the older of the two approaches,
concentrates on the fundamental factors affecting the company such
as the EPS of the company, the dividend pay-out ratio, the
competition faced by the company, the market share, quality of
management, etc. according to this approach, the share price of a
company is determined by these fundamental factors.
A technical analyst believes that share price movements are
systematic and exhibit certain consistent patterns. A more recent
approach to security analysis is the efficient market hypothesis.
According to this school of thought, the financial market is efficient
in pricing securities. The efficient market analysis holds that market
price instantaneously and fully reflects all relevant available
information.

5. Portfolio analysis: a portfolio is a group of securities held together

as investment. Portfolio analysis phase of portfolio management
consists of identifying the range of possible portfolios that can be
constituted from a given set of securities and calculating their return
and risk for further analysis. The return and risk of each portfolio
has to be calculated mathematically and expressed quantitatively.

6. Portfolio selection: portfolio analysis provides the input for the

next phases in portfolio management which is portfolio selection.
The goal of portfolio construction is to generate a portfolio that
provides the highest returns at a given level of risk. A portfolio
having these characteristics is known as an efficient portfolio.

9
 . Portfolio Management

7. Portfolio revision: -Having constructed the optimal portfolio

investor has to constantly monitor the portfolio to ensure that it
continues to be optimal. Portfolio revision may also be necessitated
by some investor-related changes such as availability of additional
funds, changes in risk attitude, need of cash for other alternative
use, etc. Whatever be the reason for portfolio revision, it has to be
done scientifically and objectively so as to ensure the optimally of
the revised portfolio.

8. Portfolio evaluation: the objective of constructing a portfolio and

revising it periodically is to earn maximum returns with minimum
risk. Portfolio evaluation is the process which is concerned with
assessing the performance of the portfolio over a selected period of
time in terms of return and risk. This involves quantitative
measurement of actual return realized and the risk born by the
portfolio over the period of investment. It provides a mechanism for
identifying weakness in the investment process and for improving
these deficient areas. It provides a feedback mechanism for
improving the entire portfolio management process.

10
 . Portfolio Management

NEED FOR PORTFOLIO MANAGEMENT

1. Portfolio management presents the best investment plan to the

individuals as per their income, budget, age and ability to undertake
risks.

2. Portfolio management minimizes the risks involved in investing and

also increases the chance of making profits.

3. Portfolio managers understand the client’s financial needs and

suggest the best and unique investment policy for them with
minimum risks involved.

4. Portfolio management enables the portfolio managers to provide

customized investment solutions to clients as per their needs and
requirements.

5. Portfolio management is needed for the proper asset allocation of the

investors according to their risk tolerance level.

6. Portfolio management process is needed to the diversification of risk

of investment for the better return.

7. Portfolio management is needed to attract investors for more

investment in diversify portfolio.

8. Portfolio management is needed to reduce market risk incorporated

with different equity funds.

9. Portfolio management is needed to provide a better investment plan

for risk averse, risk neutral and risk seeker type of investors.

10. Portfolio management is needed to provide a better choice of asset

mix for better return in long term scenario.

11
 11. . Portfolio Management

TYPES OF PORTFOLIO MANAGEMENT

Portfolio Management is further of the following types:

 Active Portfolio Management: As the name suggests, in an

active portfolio management service, the portfolio managers are
actively involved in buying and selling of securities to ensure
maximum profits to individuals.

 Passive Portfolio Management: In a passive portfolio

management, the portfolio manager deals with a fixed portfolio
designed to match the current market scenario.

 Discretionary Portfolio management services: In this type of

services, the client parts with his money in favor of manager, who
in return, handles all the paper work, makes all the decisions
and gives a good return on the investment and for this he
charges a certain fees. In Discretionary portfolio management
services, an individual authorizes a portfolio manager to take
care of his financial needs on his behalf. The individual issues
money to the portfolio manager who in turn takes care of all his
investment needs, paper work, documentation, filing and so on.
In discretionary portfolio management, the portfolio manager has
full rights to take decisions on his client’s behalf.

 The Non-discretionary portfolio management services:

The manager function as a counselor, but the investor is free to
accept or reject the manager’s advice; the manager for a services
charge also undertakes the paper work. The manager
concentrates on stock market instruments with a portfolio tailor
made to the risk taking ability of the investor. In non
discretionary portfolio management services, the portfolio
manager can merely advise the client what is good and bad for
him but the client reserves full right to take his own decisions.

12
 .. Portfolio
PortfolioManagement
Management

FACTORS AFFECTING INVESTMENT DECISION MAKING

There are seven personality traits identified based on the Big Five
personality model.

Emotional stability Based on this, the investor is classified either as

‘rational investor’—the investor takes decisions on investment based on
facts and not on emotions—or ‘emotional investor’—the investor takes
decisions based on emotions. ‘Extraversion’ describes the social
boldness of an individual.
Extrovert & Introvert The investors is classified either as an ‘extrovert’-
the investor is assertive and likes to move with people- or an ‘introvert’ –
the investor is shy, quiet and prefers to be alone.
Risk This trait defines the risk taking ability of an individual. Based on
this trait, the investor is classified as either ‘risk lover’—the investor
likes to take risky decisions—or ‘risk averter’—the investor is against
taking risks.
Return It defines the expectations of an individual on returns through
his investment decisions. Here the investor is classified either as ‘more
economic investor’—the investor expects more returns to less risk taken-
or ‘economic investor’ – the investor expects moderate risk.
Agreeability This trait describes as to how a person responds to the
information he receives on investments. The investor is classified as
‘skeptical investor’—the investor suspects the information he gets.
Conscientiousness It describes the cognitive ability of the individual
while taking decisions. Based on this, the investor is classified either as
‘moral investor’—the investor takes the decisions based on his
conscientious and analyzes whether it is right or wrong
Reasoning The last trait is ‘Reasoning’. This trait analyzes the basis of
decision making by an individual. Here, the investor is classified either
as ‘abstract investor’—the investor takes decisions based on ideas—or
‘concrete investor’—the investor takes decisions based on facts.

13
 . Portfolio Management

FACTORS AFFECTING PORTFOLIO CONSTRUCTION PROCESS:

Mostly financial planners seek to preserve capital through diversification.

They believe that asset allocation and security selection are the most
important determinants of investment performance. By allocating
investors money among a carefully chosen mix of asset classes, financial
planner aim to help you maximize your return potential while managing
your exposure to investment risk. The following issues are factored into
determining an appropriate asset allocation:

1. Investment time horizon: The investment is the time till the

investment or part thereof is planned to be liquidated to meet a
specific need. For example, the investment horizon may be ten years
to a fund a child’s college education or thirty years to meet
retirement needs. The investment time horizon has an important
bearing on the choice of assets.
2. Taxes: For an investor matters finally the post-tax return from an
investment. Tax considerations thereof have an important bearing
on investment decisions. So, carefully review the tax shelters
available to you an incorporate the same in your investment
decisions.
3. Regulations: While individual investors are generally not
constrained much by law, institutional investors have to conform to
various regulations. For example, mutual funds in India are not
allowed to hold more than 10 percent of the equity shares of a public
company.
4. Risk assessment: Financial advisors mutual funds, and brokerage
firms have developed risk questionnaires to help investors determine
whether they are conservative, moderate, or aggressive. Typically,
such risk questionnaires have 7 to 10 questions to guage a person’s
tendency to make a risky or conservative choice in certain
hypothesis situations.

14
 . Portfolio Management

5. Unique Circumstances: Almost every investor faces unique

circumstances. For example, an individual may have the
responsibility of looking after ageing parents. Or, an endowment
fund may be precluded from investing in the securities of companies
making alcoholic products and tobacco products. In building a
portfolio, financial planner may utilize an array of investment
vehicles, including:
1. Individual stocks: Stocks include equity shares (which in turn may
be classified into income shares, growth shares, blue-chip shares,
speculative shares, and so on).
2. Bonds: Bonds are defined very broadly, consist of non-convertible
debentures of private sector companies, public sector bonds,
3. Mutual funds: If investors find it difficult to invest directly in equity
shares and instruments, investors can invest in these financial
assets indirectly through mutual fund. A mutual fund represents a
vehicle for collective investment.
4. Separately managed accounts.

Before selecting investments for portfolio financial planner gathers

extensive quantitative and qualitative data in order to select only those
investments that meet their standards of quality and suit investor
needs. Whether investor's portfolio utilizes mutual funds, individual
equity and fixed income securities, financial planner due diligence
process seeks to identify mangers and investments with integrity and
successful track records. They evaluate key markers such as:

1. Historical performance
2. Investment style
3. Manager incentives
4. Company information
5. Historical taxability
6. Fixed-income creditworthiness

15
 Chapter – 2

Introduction

To

Risk Management

16
 . Risk Management

MEANING OF RISK
Risk can be defined in terms of variability of returns. "Risk is the potential
for variability in returns." An investment whose returns are fairly stable is
considered to be a low-risk investment, whereas an investment whose
returns fluctuated significantly is considered to be a high-risk investment.
Equity shares whose returns are likely to fluctuate widely are considered
risky investments. Government securities whose returns are fairly stable
are considered to possess low risk.

Risk refers to the possibility that the actual outcome of an investment will
differ from its expected outcome. More specifically, most investors are
concerned about the actual outcome being less the expected outcome. The
wider range of possible outcomes, the greater the risk. Risk analysis refers
to the uncertainty of forecasted future cash flows streams, variance of
portfolio/stock returns, statistical analysis to determine the probability of
a project's success or failure, and possible future economic states. Risk
analysts often work in tandem with forecasting professionals to minimize
future negative unforeseen effects.

Almost all sorts of large businesses require a minimum sort of risk

analysis. For example, commercial banks need to properly hedge foreign
exchange exposure of oversees loans while large department stores must
factor in the possibility of reduced revenues due to a global recession. Risk
analysis allows professionals to identify and mitigate risks, but not avoid
them completely. Proper risk analysis often includes mathematical and
statistical software programs.

17
 . Risk Management

SOURCES OF RISK:
Traditionally, investors have talked about several sources of total risk,
such as interest rate risk and market risk, which are explained below,
because these terms are used so widely, following this discussion,
researcher will define the modern portfolio resources of risk.

Interest Rate rRisk

Market Risk

Inflation Risk

Business Risk

Financial Risk

Liquidity Risk

Exachange Rate Risk

Country Risk

Figure No. – 3. – Sources of Risk

18
 Risk Management
.

1. Interest Rate Risk: The variability in a security's return resulting

from changes in the level of interest rate is referred to as interest
rate risk. Such changes generally affect securities inversely; that is,
other things being equal, security prices move inversely to interest
rates. Interest rate risk affects bonds more directly than common
stocks, but it affects both and is a very important consideration for
most investors.

2. Market Risk: The variability in return resulting from fluctuations

in the overall market that is, the aggregate stock market is referred
to as market risk. All securities are exposed to market risk, although
it affects primarily common stocks. Market risk includes a wide
range of factors exogenous to securities themselves, including
recessions, wars, structural changes in the economy, and changes
in consumer preferences.

3. Inflation Risk: A factor affecting all securities is purchasing power

risk, or the chance that the purchasing power of invested money will
decline with uncertain inflation, the real return involves risk even if
the nominal return is safe. The risk is related to interest rate risk,
since interest rates generally rise as inflation increase, because
lenders demand additional inflation premiums to compensate for the
loss of purchasing power.
4. Business Risk: the risk of doing business in a particular industry or
environment is called business risk. For example, AT & T, the
traditional telephone powerhouses, faces major changes today in
rapidly changing telecommunication industry.
5. Financial Risk: Financial risk is associated with the use of debt
financing by companies. The larger the proportion of assets financed
by debt financing by companies. The larger the proportion of assets
financed by debt, the larger the variability in the returns, other
things being equal. Financial risk involves the concept of financial
leverage, which is explained in managerial finance courses.

19
 . Risk Management

6. Liquidity Risk: Liquidity risk is the risk associated with the

particular secondary market in which a security trades. An
investment that can be bought or sold quickly and without
significant price concession is considered to be liquid. The more
uncertainty about the time element arid the price concession, the
greater the liquidity risk.

7. Exchange Rate Risk: All investors who invest internationally in

today’s increasingly global investment arena face the prospect of
uncertainty in the returns after they convert the foreign gains back
to their own currency unlike the past when most U.S. investors
ignored international investing alternatives, investors today must
recognize and understand exchange rate risk, which can be defined
as the variability in returns on securities caused by currency
fluctuations. Exchange rate risk is sometimes called currency risk.

8. Country Risk: Country risk, also referred to as political risk, is an

important risk for investors today probably more important now
than in the past. With mote investors investing internationally, both
directly and indirectly, the political, and therefore economic, stability
and viability of a country’s economy need to be considered. The
United States arguably has the lowest country, risk, and other
countries can be judged on a relative basis using the United States
as a benchmark.

20
 . Risk Management

PORTFOLIO HELPS IN DIVERSIFICATION OF RISK

Diversification is a fundamental investment concept that most investors

have no trouble understanding. If, for example, an investor owns equal
dollar amounts of only two stocks, and one suffers a 50% loss, his or her
portfolio has gone down in value by 25%. But if the investor owns ten
stocks, and one drops by 50%, his or her portfolio has suffered only a 5%
loss.

With a diversified stock portfolio, risk is reduced because different stocks

rise and fall independently of each other. On a broader scale,
combinations of different investment assets may well cancel out each
other’s fluctuations in price, reducing the overall risk. The ultimate goal in
a diversification strategy is to improve investment performance while
reducing risk.

One way to categorize risk is to distinguish between unsystematic risk and

systematic risk. Diversification is essential to the creation of an efficient
investment, because it can reduce the variability of returns around the
expected return. A single asset or portfolio of assets is considered to be
efficient if no other asset or portfolio of assets offers higher expected return
with the same risk, or lower risk with the same expected return.

It reduces risk to an undiversifiable level. It eliminates only company-

specific risk. Simple diversification- randomly selected stocks, equally
weighted investments. Diversification across industries- investing in stock
across different industries such transportation, utilities, energy, consumer
electronics, airlines, computer hardware, computer software, etc.

21
 . Risk Management

[[

TYPES OF RISK: - The essence of risk in an investment in its returns.

This variation in risk is caused by a number of factors. These factors
which produce variation in the returns from an investment constitute the
elements of risk. The total variability in returns of a security represents
the total risk of that security. Systematic risk and unsystematic risk are
the two components of total risk. Thus,

Total Risk = Systematic Risk + Unsystematic Risk

Figure no. – 4 – Types of Risk

 Systematic Risk: - As the society is dynamic, changes occur in the

economic, political and social systems constantly. These changes
have an influence on the performance of companies and thereby on
their stock prices. But these changes affect all companies and all
securities in varying degrees. Thus the impact of economic, political
and social changes is system-wide and that portion of total
variability in security returns caused by such system-wide factors is
referred to as systematic risk. Systematic risk is further divided into
interest rate risk, market risk, and purchasing power risk.

22
 . Risk Management

 Unsystematic risk: - The returns from a security may sometimes

vary because of certain factors affecting only the company issuing
such security. Examples are raw material scarcity, labor strike, and
management inefficiency. When variability of returns occurs because
of such firms- specific factors, it is known as unsystematic risk. This
risk is unique or peculiar to a company or industry and affects it in
addition to the systematic risk affecting all securities. The
unsystematic or unique risk affecting specific securities arises from
two sources: (a) the operating environment of the company, and (b)
the financing pattern adopted by the company. These two types of
unsystematic risk are referred to as business risk and financial risk
respectively.

Figure no. – 5 – Risk Relation with Portfolio Return

23
 . Risk Management

REASONS FOR INVEST IN PORTFOLIO

By saving money (instead of spending it), individuals forego consumption

today in return for a larger consumption tomorrow. There are following
reasons to invest in a portfolio:

1. To earn a predictable stream of income: While there are

exceptions, bonds pay a fixed rate of interest, at regular intervals,
and on pre determined dates. The income stream that you earn
when buying a bond is predictable. Come rain or shine, as long as
the issuer of your bond doesn’t go bankrupt, you get your interest
payment. Generally interest is paid every 6 months but there are
variations depending on the type of bond you buy.
2. To diversify their portfolio: Bond prices and stock prices tend to
move in opposite directions. When bond prices are rising, often the
stock market is performing poorly, and vice versa. Because of this
“lack of correlation” many investors who hold a lot of stocks in their
portfolio, will add some bonds into the mix to cushion the blow if the
stock market does poorly.
3. Tax Savings: As we discuss in greater detail in our article on bonds
and taxes, certain bonds, such as Treasury and Municipals, offer
some unique tax benefits which include not having to pay federal,
state, and or local government taxes.
4. Interest Rate Speculation: As we discuss in greater detail in
our lesson on interest rates, one of the largest factors that affects
the price of a bond is movement in interest rates. As many types of
bonds are very sensitive to changes in interest rates, often time’s
individuals find them a good instrument to speculate on the future
direction of interest rates.

24
 . Risk Management

5. Risk Reduction: When your assets are widely diversified, your

portfolio tends to perform in a similar way to the market as a whole.
If you own stocks in 20 different areas and one of them takes a dive,
it's unlikely that your portfolio will suffer terribly. Diversification is
the best way to increase the stability of your investments and
decrease your risk of losing money in the event that a single area
decreases in value. Although diversification won't protect you from
general market slowdowns, it will maintain your portfolio's stability
over time.
6. Asset Choices: When your holdings are widely diversified, you can
spread them out over widely divergent forms of assets, including
securities such as stocks and bonds, commodities such as oil and
minerals, real estate and cash. Each of these assets exhibits
different strengths and weaknesses in terms of risk and profitability.
Maintaining holdings in all of these areas helps to create a stable
portfolio that will increase in value over the long term.
7. Lower Maintenance: Investments require a certain amount of care
and attention to keep them performing well. If you are playing high-
stakes games with your assets and moving them around through
risky ventures, you will probably be spending a fair amount of time
watching the markets and dodging financial bullets. A diversified
portfolio is less exciting and more stable. Once you have your
investments settled into a wide variety of stocks and securities, they
can remain there for extended periods without requiring a lot of
maintenance. This frees up your time to pursue other matters and
reduces the market stress that may lead to burnout.

25
Chapter – 3

Review

Of

Literature

26
 . Review of Literature

1. Claudio Dicembrino (2012): This paper tests the hypothesis that

portfolio diversification can increase the threat of systemic financial
risk. The paper first provides a theoretical rationale for the
possibility that systemic risk may be increased by the proliferation of
financial instruments that lead operators to hold increasingly
similar portfolios. Secondly, the paper tests the hypothesis that
diversification may result in increasing the systemic risk by
analyzing the portfolio dynamics of some of the major world open
funds.

2. Lalit Mohan Kathuria (2012): The fast growing Indian economy has
led to higher income level and availability of new investment
avenues. Government savings departments, banks, financial
institutions and mutual fund houses are vying for a share in the
savings of investors. Investors now have many options for making
investments like debt instruments, stocks, mutual funds, gold, etc.
With the role of women becoming increasingly important in the
family as well as society, it becomes important to examine the
investment behavior of women investors.

The present study analyzes the level of knowledge regarding various

investment avenues, select investment practices, and factors
influencing investment decision making among male and female
employees of private sector banks in a city of India. The study
reveals that both male and female respondents were using
magazines, Internet and TV channels as the three most important
sources of awareness for collecting information about various
investment alternatives. Also, male and female respondents were
investing a larger portion of their savings into safe and risk-free
investment avenues, like employee provident fund, public provident
fund and life insurance policy.

27
 . Review of Literature

3. K Chitra & Sri Ramkrishna (2011): An investor’s investment in

stock market is influenced by a large number of factors. Stock
market’s performance is not only the result of intelligible
characteristics or herd behavior, but is also due to the influence of
psychological and personality characteristics that are still baffling
the analysts. The study focuses on analyzing the influence of seven
personality traits—emotional stability, extraversion, risk, return,
agreeability, conscientiousness and reasoning—on the choice of the
investment pattern. The results of the study show that these
personality traits of the investors have an impact on the individuals
while taking decisions and also have a strong influence on
determining the method of investment. The study found that the
influence of personality traits on the investment decision is more
compared to that of demographic variables.

4. Everton Anger Cavalheiro & Everton Anger Cavalheiro (2011):

Recently, there has been an increased interest in risk tolerance. The
level of risk tolerance of an individual has a direct influence on
consumption and on the way he/she will assign his/her assets; it is
understood that less tolerant individuals look for safer options for
their investments. In order to test a possible influence of emotion on
risk tolerance, a 1,016-individual survey was carried out in Brazil.
Also, to define the emotional factor for risk tolerance, we have
mainly used confirmatory factor analysis and two tests: KMO and
Bartlett’s sphericity test. Afterwards, a regression analysis was made
to test the influence of emotion on the tolerance level of the tested
individuals. The results indicate a misattribution bias for the case of
the decision process in individuals with positive humor who have
shown to be more tolerant to risk.

28
 . Review of Literature

5. Manish Mittal & R K Vyas (2011): Men and women differ in their
attitudes towards and preferences for risk while investing.
Psychologists suggest that women lack confidence and are more
methodical in their information processing and accumulation style.
These factors contribute to the increased perception of risk in them
as compared to men. The paper investigates whether women are
more risk-averse than men and the reasons suggested by
psychologists for the same. The study indicates that men engage in
more risk taking and are more overconfident than women. Women
tend to put in a major portion of their funds in low risk – low return
investments. However, the study suggests that men and women do
not differ in their information processing and accumulation styles.

6. Manish Mittal (2010): It has been established in the recent studies

that investor behavior and asset price deviate from the prediction of
simple rational models. The investment decisions of the investors
are influenced by their biases and prejudices. Demographic factors
like gender, age, income, education, wealth and marital status also
influence investment decision-making. This paper investigates how
salaried and business class investors differ in their investment
decisions and their tendency to fall prey to some commonly
exhibited behavioral biases.

A sample survey of 428 investors from the city of Indore was

conducted during July-October 2006 with the help of a structured
questionnaire. The study indicates that business class investors are
more prone to cognitive biases while salaried class investors are
more prone to biases which are outgrowth of framing effect and
prospects theory.

29
 Review of Literature
.

7. Sushant Nagpal & B S Bodla (2009): In the financial services industry,

an acceptance of demographics as the total basis of marketing strategy
means an acceptance of the fact that affluent individuals each earning
the same income and living in similar homes in the same area have the
same financial needs. The individuals may be equal in all aspects, may
even be living next door, but their financial planning needs are very
different. In this context, demographics alone no longer suffice as the
basis of segmentation of individual investors. It is by using lifestyles or
psychographics along with demographics that synergism between
investors can be generated. In fact, an investor-driven marketing strategy
necessitates an understanding of the demographic, socioeconomic and
lifestyle characteristics of the investors. The present study is an attempt
to bring out lifestyle characteristics of the respondents and their
influence on investment preferences. The study concludes that investors'
lifestyle predominantly decides the risk taking capacity of investors.

8. Manish Mittal & R K Vyas (2009): It has been well established that
investor behavior and asset price deviate from the predictions of simple
rational models. The proponents of behavioral finance believe that
investment decision making is not a completely rational process.
Individuals' investment decisions are guided by their desires, goals,
prejudices and emotions. Gender, age, income, education, wealth and
marital status of individuals also influence their investment decisions.
This paper investigates how income of individual investors affects their
investment decisions and their tendency to be influenced by some
commonly exhibited behavioral biases. The results indicate that Indian
investors are prone to behavioral biases during their investment decision
making process. Income was found to be a significant factor impacting
the overconfidence level, tendency to overreact and loss/regret
avoidance, but has no significant effect on self-attribution bias, framing
effect, and tendency to use purchase price as reference point.

30
 . Review of Literature

9. M R Shollapur & A B Kuchanur (2008): Investors hold different

perceptions on liquidity, profitability, collateral quality, statutory
protection, etc., for various investment avenues. In addition, they fix
their own priorities for these perceptions. The formation of
perceptions triggers the investment process in its own way, often
leading to unrealistic apprehensions especially among individual
investors. This study attempts to measure the degree of investors'
agreeableness with the selected perceptions as well as to trace the
gaps between their perceptions and the underlying realities. Failure
to deal with these gaps tends to lead the investment clientele to a
wrong direction. Hence, there is a need to help investors develop a
realistic perspective of the investment avenues and their attributes.

10. Roberto Frota Decourt & José Madeira Neto (2007): The study
indicates that the process of making investment decisions is based
on the `Behavioral Economics' theory which uses the fundamental
aspects of the `Prospect Theory' developed by Kahneman and
Tversky (1979). The following effects have been tested and identified
using an investment simulator over the Internet: (1) the endowment
effect, which prevents the participants from selling the received
assets, even if better investment options are available; (2) the
disposition effect, which refers to the pattern that people avoid
realizing paper losses and seek to realize gains; (3) fear of regret,
which makes the participant invest in previously rejected assets that
had good valorization; and (4) framing, which modifies the
investment decision depending on the perspective given to the
problem. The conclusions of this study are: (1) the endowment effect
was effective for physicians; (2) the disposition effect did not affect
the participants; (3) the fear of regret influenced the decisions of
MBA students; and (4) the framing modified the investment decision
of the physicians and MBA students.

31
Chapter – 4

Research

Methodology

32
[
. Research Methodology

Introduction to the problem: Investor appears to be prone to the

following errors in managing their investment.

 Inadequate comprehension of return & risk.

 Naïve extrapolation of the past.
 Cursory decision making.
 Untimely entries and exists.
 High costs.
 Over-diversification and under-diversification.
 Wrong attitude toward losses and profits.

This study only focuses upon the risk effect on investor decision to invest
in a portfolio. In this study we analyze that how a portfolio diversify the
risk in an investment. The ultimate goal in a diversification strategy is to
improve investment performance while reducing risk. One way to
categorize risk is to distinguish between unsystematic risk and systematic
risk. Risk can be reduced by investment in portfolio. There are following
reasons to invest in a portfolio:

 To diversify portfolio
 Tax saving
 Interest rate speculation
 Risk reduction
 Assets choices
 Lower maintenance

So this study is all about the portfolio management which helps an

investor to reduce their risk. Investing in securities such as shares,
debentures and bonds is profitable as well as exciting. It is rare to find
investors investing their entire savings in a single security. Instead, they
tend to invest in a group of securities. Such a group of securities is called
portfolio.

33
 . Research Methodology

OBJECTIVES:
1. To understand about portfolio management.
2. To find out the impact of risk on investment decision.
3. To analyze how portfolio reduce risk.

Research design:

Research design is the arrangement of conditions for collection and

analysis of data in a manner that aims to combine relevance to the
research purpose with economy in procedure.

Research:

Research is a process in which the researcher wishes to find out the end
result for a given problem and thus the solution helps in future course of
action. The research has been defined as “A careful investigation or
enquiry especially through search for new fact in any branch of
knowledge”.

Type of research:

This is a descriptive type of research. Descriptive research includes

surveys and fact-finding enquiries of different kinds. The major purpose of
descriptive research is description of the state of affairs as it’s at present.
The main characteristics of this method are that the researcher has no
control over the variables.

Sources of data

The two sources of data collection are namely primary & secondary.

Primary Data:

Primary Data are those data which are collected at first time through
observation, direct communication or personal interview. The Primary
Data required for this project work was collected through Questionnaires.
The format of the Questionnaire is attached to this report.

34
 . Research Methodology

Secondary Data

Secondary data is the data which is already available i.e., they refer to
data, which has already been collected and analyzed by someone else.
Secondary data are collected from books and internet.

Data collection method:

Data was collected using Questionnaire. This method is quite popular in
case of big enquires. Private individuals, research workers, private and
public organizations and even government are adopting it. A questionnaire
consists of a number of question involves both specific and general
question related to risk analysis.

Sample Design

Type of universe : Finite

Sample Unit : Jaipur city

Source list : Investors, who invest in portfolio.
Size of Sample : 50 samples

Sample Media : Questionnaire

Sampling Method : Simple Random Sampling Method

Limitations of the study

1. The study is limited to specific group of participants.

2. One of the possible limitation of this study is the sample itself

35
Chapter – 5

Data

Analysis

36
 . Data Analysis

Graph No. – 1. Willingness of investor to take risk.

Willingness To Take Risk

25 22
20
no. of investors

15
15
11
10

0
Low risk taker Average risk taker High risk taker
Degree of risk

Interpretation: The above graph shows that maximum no. of investors

willing to take average risk, and there are less people to take high risk.
There are 22 investors out of 50 who are average risk taker, 15 investors
are low risk taker and 11 investors are high risk taker.

Graph No. -2. Investment probability in downturn market.

Investment In Down Market

30 28
25
No. of investors

20
20
15
10
5 2
0
No Yes, rarely Yes, frequently
Investment pattern

Interpretation: The above graph shows that maximum no. of investors

does not invest their money in downturn market willing to take average
risk. There are 28 investors out of 50 does not invest their money in
downturn market, 20 investors rarely invest and 2 investors frequently
invest their money in down market.

37
 . Data Analysis

Graph No. – 3. Psychology of investors about their financial decision:

Concern About Financial Decision

20 17

No. of investors
14
15 12
10 7
5 Series1
0
Always possible Rarely possible Always possible Rarely possible
losses losses gains gains
Probability of return

Interpretation: The above graph shows that 17 investors out of 50 think

that they will get rarely gains 14 investors think about rarely losses, 12
investors think about always possible losses and 7 investor think about
always possible gains.

Graph No. – 4. Thinking of investors about their financial.

Types of Financial Decision

60
48
50
No. of investors

40
30
20 Series1
10 2
0
Optimistic Pessimistic
Nature of financial decision

Interpretation: The above graph shows that 48 investors out of 50 think

that their financial decision is very optimistic in nature. There are only 2%
investors who think that their investment decision can be pessimistic in
nature.

38
 . Data Analysis

Graph No. – 5. Preference of investor for the types of earnings.

4%
Concern for Income

Mainly Salary
36%

Equal mix of salary &

60% commission
Mainly commission

Interpretation: The above graph shows that 60% investors prefer equal
mix of salary & commission, 36% investors prefer mainly salary and there
are only 4% investors who prefer only commission base job.

Graph No. – 6. Risk taken by investors in past scenario.

Past Risk Taken By Investor

Low
High 28%
16%

Medium
56%

Interpretation: The above graph shows that 56% investors have taken
medium risk in their past financial decision, 28% investors have taken low
risk in their past financial decision and 16% investors have taken high
risk in their past financial decision. This graph shows that there are
maximum no. investors willing to take medium risk in past scenario.

39
 . Data Analysis

Graph No. – 7. Total No. of investors, borrowed money from fixed

assets.
Borrower from Fixed Assets
12%

Yes
No

88%

Interpretation: The above graph shows that 88% investors, who have not
prefer to borrow money from their fixed assets that means maximum no.
investor does not liquidate their fixed assets for any kind of financial
investment & 12% investors borrow funds from fixed assets.

Graph No. – 8. Investors Confidence on their financial decision.

Confidence on Financial Decision

Low
High 16%
18%

Medium
66%

Interpretation: The above graph shows that 66% investors have average
confidence on their financial decision, 18% investors highly confident
about their financial decision and 16% investors have low confidence on
their financial decision.

40
 . Data Analysis

Graph No. – 9 Assumption of investors about downturn market.

Assumption About Downturn Market

30
24
25 21
No. of investors

20
15
10
5
5
0
Very easily Somewhat eaisly Somewhat uneaisly
Assumptions of investors

Interpretation: The above graph shows that 24 investors out of 50 take

downturn market somewhat uneasily, 21 investors take downturn market
somewhat easily and there are 5 investors who take downturn market very
easily.

Graph No. – 10. Investors view about risk.

View About Risk

40
34
35
30
No. of investors

25
20
15 11
10
5 2 3
0
Danger Uncertainty Opportunity Thrill
View of investors

Interpretation: The above graph shows that 34 investors out of 50 think

that risk is related with uncertainty in returns and 11 investors think that
risk is an opportunity for them, 3 investors take risk as thrill and 2
investors take risk as danger.

41
 . Data Analysis

Graph No. – 11. Preference of investors for job security & income:

Concern for Job Security & Income

Not sure
8%
High job security
with low salary
50%

Low job security

with high salary
42%

Interpretation: The above graph shows that 50% investors mainly prefer
high job security with low salary, 42% investors prefer low job security
with high salary and 8% investors prefer not sure about their job security
& income.

Graph No. – 12. Degree of risk preparation by investor for future.

Degree of Risk Preparation

25
23

20
No. of investors

15
15
12

10

0
Small Medium Large
Risk preparation

Interpretation: The above graph shows that 23 investors out of 50 have

prepared for average future risk, 15 investors have prepared for high risk
in future and 12 investors have prepared for large risk.

42
 . Data Analysis

Graph No. – 13. Investment probability of investors in loss making

company in past scenario.

Investment Probability in Loss Making Company

25 22
20
No. of investors

15
10 10
10 8

0
Definitely not Probably not Not sure Definitely
Investment probability

Interpretation: The above graph shows that 22 investors out of will not
invest their money in a loss making company, 10 investors not sure about
investment and 8 investors will definitely not invest money in loss making
company.

Graph No. – 14. Types of probable investment portfolio.

Investment Portfolio
Low risk 10%
24% Medium risk 40%
30% High risk 50%
Low risk 30%
Medium risk 40%
High risk 30%
Low risk 50%
Medium risk 40%
46% High risk 10%

Interpretation: The above graph shows that 46% investors invest their
money in that portfolio which consist low risk 30%, medium risk 40% and
high risk 30%. There are 30% investors invest money in that portfolio
which contains low risk 10%, medium risk 40% & high risk 50%.

43
 . Data Analysis

Graph No. – 15. Change in investment decision of investors in past

scenario.

Change in Investment Decision

25
20
No. of investors 20 17
15 13

10
5
0
Toward lower risk Toward higher risk No change
Risk Pattern

Interpretation: The above graph shows that 20 investors out of 50 have

changed their investment decision toward lower risk in past scenario, 17
investors have not change their investment decision in past. There is 13
investors who have changed their investment decision toward high risk in
past scenario.

Graph No. – 16. Uncomforted zone for investor in downturn

Uncomfort zone in Downturn

30 26
No. of investors

25
20
15 12
10 6 4
5 2
0
Any fall make 10% 25% 50% More than 50%
you
uncomfortable
value of fall in market

Interpretation: The above graph shows that 26 investors out of 50 feel

uncomfortable if market fall by 25% from its previous value, 12 investors
feel uncomfortable if market fall by 10%, 4 investors feel uncomfortable if
market fall by 50% from its previous value and 6 investors feel
uncomfortable by any fall.

44
 . Data Analysis

Graph No. – 17. Concern about investment value.

Concern About Investment Value

32%
Much more important that
the value does not fall
68%
Much more important that
the value retains its
purchasing power

Interpretation: The above graph shows that 68% investors are mainly
prefer that investment value should retains its purchasing power and 32%
investors think that the value of investment should not fall.

Graph No. – 18. Funds available with investors for average risk &
return investment.
Funds Available for Average Return Investment
0%
4%
32%
28%

0%-20%
21%-40%
41%-60%
61%-80%
81%-100%

36%

Interpretation: The above graph shows that 36% investors have 21%-40%
funds for investment, 32% investors have 41%-60% funds for average risk
& return investment. There are 28% investors have 20% funds for
investment in average risk & return investment.

45
 . Data Analysis

Graph No. – 19. View of investors about loan amortization rates:

View About Loan Rates

8%
18%
12%
100% variable
75% variable, 25% fixed
50% variable, 50% fixed
22%
25% variable, 75% fixed
40%
100% fixed

Interpretation: The above graph shows that 40% investors prefer 50%
variable and 50% fixed interest rates, 22% investors mainly prefer 75%
variable & 25% fixed interest rates, 18% investors prefer 100% variable
interest rate, 12% investors prefer 25% variable & 75% fixed interest rate
and 8% investors prefer 100% fixed interest rate.

46
 . Findings

FINDINGS

1. There is maximum number of investors willing to take average risk

in their investment decision and less no. of investors willing to take
higher risk. So according to this view, risk taking capacity in an
investment decision is mainly affected by investor’s willingness to
take risk.

2. Many of the investors do not invest their money in a downturn

market that is why risk taking capacity affects due to the current
market situation.
{{

3. There is maximum number of investors always think that their

investment decision is optimistic in nature and gives possible gains,
so this will raise the risk taking capacity of investors.

4. There are most of the investors prefer high job security, so stability
of income source is also affect investors risk taking capacity.

5. There is maximum number of investors do not borrow funds from

their fixed assets. So investors do not prefer to take risk in
investment decision by borrow funds from fixed assets.

6. Many of the investors take downturn market very uneasily and feel
uncomfortable, so that is why risk taking capacity is also affected by
assumption of investors for downturn market.

7. Many of the investor’s correlates risk with uncertainty in returns, so

less no of investors think positive about risk. This will also affect
risk taking capacity of investors.

8. Maximum number of investors affect by the company’s past

performance. Investors do not willing to invest their money in loss
making company in past scenario.

47
 . Findings

9. There is most of the investors want to invest in that portfolio which

contains average returns and lower risk and less no. of investors
invest in risk containing portfolio. So this analysis shows that most
of investors are risk averse not risk seekers.

10. Many of the investors concern that investment value should retains
its purchasing power, so if investment value fall from its purchasing
then investors will not take risk.

11. There are most of the investors having funds available with them for
that portfolio which contains average risk and average returns. So
this analysis shows that investors mostly prefer average risk
containing portfolio.

12. In the past scenario mostly investors change their investment

decision towards lower risk so this analysis shows that investors are
not willing to take higher risk.

13. There are mostly investors prepared to take medium risk in future
scenario; they do not prepare to take high risk in future. So this
analysis shows that investors willing to take average risk in future
scenario.

48
 . Suggestions

SUGGESTIONS
As per the study, it is analyze that maximum number of investors
are risk averse and willing to take average risk due to following
reasons:
1. Average income level.
2. Funds & assets available with them.
3. Willingness to take risk.
4. Family background.
5. Uncertainty view about risk.
6. Uncertainty in market situation.

So due to these reasons researcher suggest the following advice to

investors:

1. Investors should diversify their portfolio in such a manner so that

they can earn a consistent return for a long time period.
2. As per the study, most of the investors are average risk taker, so
that they should diversify maximum portfolio in debt funds and
minimum portfolio in equity funds so that risk incorporated with
portfolio will be less.
3. The ratio of portfolio diversification in debt & equity funds should
be 60% & 40% respectively.
4. Investors should invest their funds in monthly investment plan
(MIP), which consists low risk & average return and then transfer
their funds from MIP to systematic transfer plan (STP) which
consist higher return. Systematic investment plan is generally
related with equity funds but due to systematic transfer, the risk
in portfolio will be less & return will be high. Primarily, MIP
of mutual fund is a debt-oriented scheme that generally invests
up to 75-80% of its corpus in debt instruments and the
remaining in equity instruments.

49
 . Suggestions

MIPs aim to provide investors with regular pay-outs (though

dividends) - although it is not mandatory for the mutual fund
scheme as dividends are paid at the discretion of the fund house
and subject to availability of distributable surplus.

5. The asset allocation for average risk taker investors should be

following:

Asset Allocation Assumptions for Average risk taker Investors

S.No. Particulars Liquid Debt Gold Real Est. Equity Total

Average
6.00% 8.00% 9.00% 10.00% 12.00% NA
Returns
0-1 Year
100.00% 0.00% 0.00% 0.00% 0.00% 100.00%
Short Allocation
Term 1-3 Year
10.00% 65.00% 0.00% 0.00% 25.00% 100.00%
Allocation
Medium 3-6 Year
10.00% 65.00% 0.00% 0.00% 25.00% 100.00%
Term Allocation
6-10 Year
0.00% 40.00% 0.00% 0.00% 60.00% 100.00%
Long Allocation
Term 10+ Year
0.00% 15.00% 10.00% 0.00% 75.00% 100.00%
Allocation

50
 . Conclusion

CONCLUSION

To conclude after analysis of the project study it is clear that management

of portfolio is essential task of financial management. In the present
scenario risk averse, risk seekers and risk neutral investors exist, but
investment decision of an investor depends on various factors. Such as
willingness of investor to invest in a portfolio, funds available with
investors, market situation related with past and present scenario, risk
taking capacity of an investors.

This project study mainly focuses upon risk affect on investment decision.
To conclude after analysis of the research data, it is clear that mostly
investors are average risk taker and they are willing to take average risk in
their investment decision. Mostly investors want to invest in that portfolio
which consist average risk and average return. Many of the investor’s
correlates risk with uncertainty in returns, so less no of investors think
positive about risk. This will also affect risk taking capacity of investors.

According to this study it can be concluded that mostly investors are

average risk taker so on the basis of willingness to take risk, it suggests
that investors should diversify portfolio in such a manner so that they can
earn better return in long term scenario. There are various ways available
with investors to reduce risk such as maximum portfolio investment in
debt funds and less investment in equity funds. The ratio of portfolio
diversification in debt & equity funds should be 60% & 40% respectively.
In the analysis of risk and return management, portfolio management is a
necessary tool which is the art of selecting the right investment policy for
the individual in terms of minimum risk and maximum return. Portfolio
management refers to managing an individual’s investment in the form of
bonds, shares, cash, mutual funds etc so that he earns the maximum
profits within the stipulated time frame.

51
 . References

REFERANCES

1. Dicembrino, C. (2012). “Can Portfolio Diversification Increase Systemic

Risk?: Evidence from the US and European Mutual Funds Market” ,
The IUP Journal of Behavioral Finance, Vol.5, No.1, pp. 39-54.
2. Kathuria, L.M. (2012). “Investment Decision Making: A Gender-Based
Study of Private Sector Bank Employees”, The IUP Journal of Financial
Risk Management, Vol.4, No.2, pp. 54-72.
3. Chitra, K. (2011). “Does Personality traits Influence the Choice of
Investment”, The IUP Journal of Behavioral Finance, Vol.6, No.2, pp.
34-56.
4. Cavalherio, E.A. (2011). “Misattribution Bias: The Role of Emotion in
Risk Tolerance”, The IUP Journal of Finance, Vol.4, No.4, pp. 42-64.
5. Mittal, M. and Vyas R.K. (2011). “A Study of Psychological Reasons for
Gender Differences in Preferences for Risk and decision Making, The
IUP Journal of Finance, Vol. 11, No.8, pp.18-36.
6. Mittal, M. (2010). “Study of Differences in Behavioral Biases in
Investment Decision-Making between the Salaried and Business Class
Investors”, The IUP Journal of Finance, Vol.2, No.1, pp. 20-34.
7. Nagpal, S. (2009). “Impact of Investors Lifestyle on Their Investment
Pattern: An Empirical Study”, The IUP Journal of Behavioral Finance,
Vol.8, No.6, pp. 23-39.
8. Mittal, M. (2008). “Does Irrationality Decision Vary with Income?”, The
IUP Journal of Behavioral Finance, Vol.13, No.2, pp. 6-19.
9. Shollapur, M.R. (2008), “Identifying Perceptions and Perceptual Gaps: A
Study on Individual Investors in Selected Investment Avenues”, The IUP
Journal of behavioral Finance, Vol.2, No.1, pp. 20-34.
10. Decourt, R.F. (2007), Behavioral Finance and the Investment Decision-
making Process in the Brazilian Financial Market, The IUP Journal of
Behavioral Finance, Vol.4, No.4, pp. 42-64.

52
 . References

BIBLIOGRAPHY
Books, magazines and reports support:
1) Portfolio Management – Parsana Chandra
2) Security Analysis and Portfolio Management- S Kevin
3) The IUP Journal of Applied Finance
4) The IUP Journal of Behavioral Finance
5) The IUP Journal of Risk Management

WEBLIKS TIME* DATE^

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