Methodology of the Study

• Data Source
• Data Analysis
• Panel Data
• Equality Test
• Correlation
 Introduction
Modern finance theory started from Markowitz’s portfolio theory in
1952 , which predicts how individual investor allocates their assets by
balancing the risk and return tradeoffs, is the combination of
investment to maximize the return based on a given level of risk.
 Dhaka Stock Exchange
• Functions of DSE
• Legal status of DSE
• Sector of DSE
• Roles of stock exchange in economy
 Fixed effect
• We found that the coefficient of Risk, is negative that means statistically it
is not significant.
• Coefficient of determination, which tells or explains us how much
variations, in Dependent Variable are explained in the effect in variation in
Independent Variable. It explains percentage of variation in dependent
variable of the model because of independent variable. In our case the
explained variable is 14%, which is a not a good sign.
• Durbin Watson test the presence of the problem of auto correlating in the
error terms.
• In our case Durbin Watson statistics, is 1.19, below 1.5, which implies that
there are very major chances of error of auto correlation.
 Random effect
• Here, we found that the coefficient of Risk, is positive but the statistically it
is significant.
• Coefficient of determination, which tells or explains us how much
variations, in Dependent Variable are explained in the effect in variation in
Independent Variable. It explains .005% of variation in dependent variable
of the model because of independent variable.
• Durbin Watson = Durbin Watson test the presence of the problem of auto
correlating in the error terms.
• In our case Durbin Watson statistics, is 1.02, below 1.5, which implies that
there are very major chances of error of auto correlation.
 Test of Equality of Means
• Bangladesh Finance and Investment Co. Ltd
Probability of return is .4787 and probability of risk is 0 over the year
2013-2017.
• IDLC Finance Ltd.
Probability of return is .92 and probability of risk is .08 over the year
2013-2017.
• International Leasing & Financial Services Ltd.
Probability of return is .49 and probability of risk is 0 over the year
2013-2017.
 Test of Equality of Means
• Lanka Bangla Finance Ltd
Probability of return is .39 and probability of risk is .017 over the year
2013-2017.
• Islamic Finance & Investment Ltd
Probability of return is .21 and probability of risk is .015 over the year
2013-2017.
• MIDAS Financing Ltd.
Probability of return is .098 and probability of risk is .029 over the year
2013-2017.
 Test of Equality of Means

• Peoples Leasing and Fin. Services Ltd

Probability of return is .27 and probability of risk is .016 over the year
2013-2017.
• Premier Leasing & Finance Limited
Probability of return is .72 and probability of risk is .032 over the year
2013-2017.
 Test of Equality of Means

• Prime Finance & Investment Ltd

Probability of return is .94 and probability of risk is .019 over the year
2013-2017.
• Phoenix Finance and Investments Ltd
Probability of return is .94 and probability of risk is .019 over the year
2013-2017.
 Correlation
17_BDFN 17_IDLC 17_ILFS 17_IFIL 17_LBFL 17_MDFL 17_PLFS 17_PLSI 17_PFIL 17_PHXF

17_BDFN 1 -0.07226 -0.1002 0.074834 0.021774 0.137514 -0.08345 -0.19397 -0.09006 0.201868

17_IDLC -0.07227 1 0.207144 0.350877 0.647097 0.026949 0.193393 0.141224 0.093478 0.122865

17_ILFS -0.1001 0.20382 1 0.3768 0.421459 0.401891 0.30747 0.485711 0.506576 0.02278

17_IFIL 0.07486 0.352883 0.379152 1 0.436425 0.25523 0.161764 0.493066 0.172432 0.053884

17_LBFL 0.024268 0.654719 0.423578 0.437069 1 0.208635 0.273837 0.326516 0.302241 0.200735

17_MDFL 0.091699 0.024107 0.427985 0.278724 0.20861 1 0.170763 0.104875 0.07896 -0.09267

17_PLFS -0.08345 0.186463 0.30646 0.166263 0.247359 0.198467 1 0.063105 0.432272 0.055403

17_PLSI -0.19397 0.136468 0.485394 0.489278 0.331028 0.091946 0.063105 1 0.132738 0.37335

17_PFIL -0.09006 0.105589 0.500968 0.172734 0.29737 0.084541 0.432272 0.132738 1 -0.11592

17_PHXF 0.201868 0.12679 0.030699 0.056429 0.193714 -0.01335 0.055403 0.37335 -0.11592 1
 Findings
• There is relation between firm's financial position and its risk and
return.
• Decisions for stock purchase should not be made by just considering
the market value of equity.
• Firm’s financial position depends on its risk and return
• A company high variation in the market value of equity should not be
considered good for investment.