RESEARCH METHODOLOGY

Introduction

Research may be very broadly defined as systematic gathering of data and information and its
analysis for advancement of knowledge in any subject. Research attempts to find answer
intellectual and practical questions through application of systematic methods. Webster’s
Collegiate Dictionary defines research as "studious inquiry or examination; esp: investigation or
experimentation aimed at the discovery and interpretation of facts, revision of accepted theories
or laws in the light of new facts, or practical application of such new or revised theories or laws".
Some people consider research as a movement, a movement from the known to the unknown.

It is actually a voyage of discovery. We all possess the vital instinct of inquisitiveness for, when
the unknown confronts us, we wonder and our inquisitiveness makes us probe and attain full and
fuller understanding of the unknown. This inquisitiveness is the mother of all knowledge and the
method, which man employs for obtaining the knowledge of whatever the unknown, can be
termed as research.

Research is an academic activity and as such the term should be used in a technical sense.
According to Clifford Woody research comprises defining and redefining problems, formulating
hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions
and reaching conclusions; and at last carefully testing the conclusions to determine whether they
fit the formulating hypothesis. D. Steiner and M. Stephenson in the Encyclopedia of Social
Sciences define research as “the manipulation of things, concepts or symbols for the purpose of
generalizing to extend, correct or verify knowledge, whether that knowledge aids in construction
of theory or in the practice of an art.”

Research is, thus, an original contribution to the existing stock of knowledge making for its
advancement. It is the pursuit of truth with the help of study, observation, comparison and
experiment. In short, the search for knowledge through objective and systematic method of
finding solution to a problem is research. The systematic approach concerning generalization and
the formulation of a theory is also research. As such the term ‘research’ refers to the systematic
method consisting of enunciating the problem, formulating a hypothesis, collecting the facts or
data, analyzing the facts and reaching certain conclusions either in the form of solutions(s)
towards the concerned problem or in certain generalizations for some theoretical formulation.

2.1 Objectives of study

1. To study and compare the investors perception towards mutual and equity
2. To study and compare the investment pattern , which influences the decisions of investor
in mutual fund and equity
3. To study and compare the factors influencing the investors in selecting mutual fund and
equity
4. To evaluate investors satisfaction towards mutual funds and equity
5. To compare the problems of investors while investing in mutual fund and equity

2.2 Hypothesis

Hypothesis is considered as a principal instrument in research. It is a preposition or assumption

for research work to be tested. Its main function is to suggest new experiments and observations.
is a it statement which is extended for proper guidance of research activity.

Ho: There is no significant difference in the risk, return preferences of the investors

H1: There is a significant difference in therisk, return preferences of the investors

2.3 Scope of the study

The scope of the present study covers the buying behavior of the investors of Mutual Funds and
Equity in Hyderabad and Secunderbad only.

2.4 Limitations of study

 There is a possible of bias in answering the questions by the sample respondents as the
questions are concerned with their personal financial matters.
 Time would be main constraint. The Sample investor respondents have to spare some
time to answer the questions in the schedule.
2.5 Population

The survey will be based on sample method .The researcher has takes the population of 100.

2.6 Sample size

The sample size in this survey is 30. The population of this survey is 100 and the sample size is
selected 30% of the population. Then the sample size is taken 30% of the 100 that is 30. The
researcher will collect the information from 30 peoples. This survey is in Ambernath region and
also other nearby places.

2.7 Data collection

Data collection is the process of collecting the information from all the relative sources to find
out the answer to the research problem, test the hypothesis and evaluate the outcome. Data
collection is divided into the two methods that are Primary data collection method and Secondary
data collection method.

A formal data collection process is necessary as it ensures that the data gathered are both defined
and accurate and that subsequent decisions based on arguments organized in the findings are
valid. The process provides both a baseline from which to measure and in certain cases an
indication of what to improve.

Primary data collection method: primary data is the first hand data collected by the researcher.
Data used in research originally obtained through the direct efforts of
the researcher through surveys, interviews and direct observation. Primary data is more costly to
obtain than secondary data which is obtained through published sources, but it is also more
current and more relevant to the research project.

Primary data collection methods can be divided into two groups: quantitative and qualitative.

Quantitative data collection methods: Quantitative data collection methods are based in
mathematical calculations in various formats. Methods of quantitative data collection and
analysis include questionnaires with closed-ended questions, methods of correlation and
regression, mean, mode and median and others.
Quantitative methods are cheaper to apply and they can be applied within shorter duration of
time compared to qualitative methods. Moreover, due to a high level of standardisation of
quantitative methods, it is easy to make comparisons of findings.

Qualitative research methods: on the contrary, do not involve numbers or mathematical

calculations. Qualitative research is closely associated with words, sounds, feeling, emotions,
colours and other elements that are non-quantifiable.
Qualitative studies aim to ensure greater level of depth of understanding and qualitative data
collection methods include interviews, questionnaires with open-ended questions, focus groups,
observation, game or role-playing, case studies etc.

The selection of the data collection methods depends on the area of your research and the nature
of research aims and objectives.

Secondary data collection method: Secondary data refers to data which is collected by
someone who is someone other than the user. Common sources of secondary data for social
science include censuses, information collected by government departments, organizational
records and data that was originally collected for other research purposes. Primary data, by
contrast, are collected by the investigator conducting the research. Secondary data analysis can
save time.

Secondary data is a type of data that has already been published in books, newspapers,
magazines, journals, online portals etc. There is an abundance of data available in these sources
about your research area in business studies, almost regardless of the nature of the research area.
Therefore, application of appropriate set of criteria to select secondary data to be used in the
study plays an important role in terms of increasing the levels of research validity and reliability.
These criteria include, but not limited to date of publication, credential of the author, reliability
of the source, quality of discussions, depth of analyses, the extent of contribution of the text to
the development of the research area etc.
2.8 Interview questions designed for interviewer

Questionnaire is divided into two parts.

First part: The questionnaire which are designed for the maneger of the company .

Second part: Second part of the questionnaire is relates with the investors about the investment
in equity shears and mutual funds.

2.9 Data Analysis and Interpretation

Data analysis is processes which organize, evaluate, describe, and interpret data. Data
interpretation is the process making sense of numerical data that has been collected analyze and
present.

For analyzing the hypothesis, T-test has been used in this research. T-test is used for testing the
hypothesis. T-test is a type of inferential statistic used to determine if there is significance
difference between the means of two groups, which may be related in certain features. The T-test
is one of many test used for the purpose hypothesis testing in statistics.

Assumptions of T-test

 The first assumption made regarding t-tests concerns the scale of measurement. The
assumption for a t-test is that the scale of measurement applied to the data collected
follows a continuous or ordinal scale, such as the scores for an IQ test.
 The second assumption made is that of a simple random sample, that the data is collected
from a representative, randomly selected portion of the total population.
 The third assumption is the data, when plotted, results in a normal distribution, bell-
shaped distribution curve.
 The fourth assumption is a reasonably large sample size is used. A larger sample size
means the distribution of results should approach a normal bell-shaped curve.
 The final assumption is homogeneity of variance. Homogeneous, or equal, variance exists
when the standard deviations of samples are approximately equal.
 Types of T-test

Unequal variance
(Seperate variance)
Independent
(Uncorrelated)
Equal variance
T-test
(Pooled variance)
Paired
(Correlated)

There are three types of t-tests, and they are categorized as dependent and independent t-tests.

Correlated (or Paired) T-Test: The correlated t-test is performed when the samples typically
consist of matched pairs of similar units, or when there are cases of repeated measures. For
example, there may be instances of the same patients being tested repeatedly - before and after
receiving a particular treatment. In such cases, each patient is being used as a control sample
against themselves. This method also applies to cases where the samples are related in some
manner or have matching characteristics, like a comparative analysis involving children, parents
or siblings. Correlated or paired t-tests are of a dependent type, as these involve cases where the
two sets of samples are related.

The formula for computing the t-value and degrees of freedom for a paired t-test is:

Mean1 and mean2 are the average values of each of the sample sets,
while var1and var2 represent the variance of each of the sample sets.
The remaining two types belong to the independent t-tests. The samples of these types are
selected independent of each other – that is, the data sets in the two groups don’t refer to the
same values. They include cases like a group of 100 patients being split into two sets of 50
patients each. One of the groups becomes the control group and is given a placebo, while the
other group receives the prescribed treatment. This constitutes two independent sample groups
which are unpaired with each other.

Equal Variance (or pooled) T-Test: The equal variance t-test is used when the number of
samples in each groups is the same, or the variance of the two data sets is similar. The following
formula is used for calculating t-value and degrees of freedom for equal variance t-test:

Unequal Variance T-Test: The unequal variance t-test is used when the number of samples in
each group is different, and the variance of the two data sets is also different. This test is also
called the Welch's t-test. The following formula is used for calculating t-value and degrees of
freedom for an unequal variance t-test:
2.10 Statistical tool

The statistical tools are used for analyse the primary data is Graphical method and Simple
percentage analysis method.

 Graphical method: After the measurement the gathered data are organised, examined
and displayed by using different graphical techniques. There are several graphical
representation forms such as bar charts, histograms, scatter figure, pie charts.
 Simple percentage analysis: the analysis of simple percentage is used in comparing
between more than two collections of data. In this method the percentage is used to
represent the relationship percentage can also be used to compare similar term.

Percentage = No. Of response *100 / Total no. Of response