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PROJECT WORK
LEADING TO THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION
ABSTRACT
Financial market is complex and uncertain. In an uncertain investment environment an investors main concern would be how to maximize his return by controlling the risk within acceptable limits. In the current volatile scenario, investing in stock market is a major challenge even for seasoned professionals. Hence investment process has become complex. Over the past three decades, there is an explosive growth in the trading of financial derivatives. This has resulted a growth in the study of financial mathematics also which in turn has helped to support the increasing sophistication of financial markets. Now the major concern of each investor is to earn a reasonable return on his investment. The project report titled effectiveness of diversification in controlling port folio risk with special reference to Hedge equities deals with the presentation of various steps in the portfolio management and identification of benefit obtained by diversification of securities in the portfolio in a simple manner.
Primary objective to find out how much risk can be reduced when portfolio is diversified up to a level(benefit of diversification)
Secondary objectives to calculate the risk return characteristics of the selected 10 securities to construct an optimal portfolio from major scrips of S&P CNX Nifty to identify the benefit of diversification in controlling portfolio risk. to evaluate the performance of the portfolio by using various ratios
Research methodology
For the purpose of the present study share of 10 joint stock companies are selected. Here judgment sampling method is used. The shares belong to different sectors. For the purpose of analysis of data Arithmetic mean, standard deviation, variance, alpha beta co-efficient is used.