A Study on the Behaviour of Investors and their Risk-Return Perception with Special Reference to Salem City

2021 ◽  
Vol 2 (2) ◽  
Author(s):  
T. Kumarasamy
Keyword(s):  
Household Savings ◽  
Corporate Sector ◽  
Expected Return ◽  
Risk And Return ◽  
Subjective Analysis ◽  
Risk Return ◽  
Investment Pattern ◽  
Retail Investor ◽  
Service Sectors ◽  
Investment Option

This project coins about The Indian investment market. Investment is actually an asset that's created to permit money to grow. The wealth created can be used for a variety of objectives such as situations. Investing would be different things to different people. While investing for a few people mean fixing money to realize a profit, for a few others it also can mean investing time or effort for a few future benefits like investing in one self’s skills or health. Investment helps to channel household savings to the corporate sector, which is utilized to develop the industrial and service sectors and their own use. Today, investors have several options of investment with different peculiarities matching their needs. The funds allocated by the investors to various investment avenues depend largely on the investment objectives perceived by them. Investment examination has become essential for any retail investor. The success of investments is totally dependent on the satisfaction of the investors during the post-investment period and investors’ confidence. The uncertainty of expected return may be a vital part of the investment option. The variations in returns from the expectations of the investors cause risk and therefore the subjective analysis of varied attributes helps for the avoidance of the danger. Theoretically, risk and return go hand in hand, i.e., the upper the danger, the more the return. However, the risk- return knowledge of the investors on different investments might be differing from each other. In this paper, an attempt is made to study the investors’ perception of risk-return of investment and to find the investor's investment pattern.

scholarly journals Factors Influencing Investment Decisions of Nepalese Investors

2020 ◽  
Vol 23 (2) ◽  
pp. 145-160
Author(s):  
Purna Man Shrestha
Keyword(s):  
Investment Decision ◽  
Market Price ◽  
Investment Decisions ◽  
Related Variable ◽  
Multiple Choice Questions ◽  
Expected Return ◽  
Risk And Return ◽  
Risk Return ◽  
Factors Influencing ◽  
Structured Questionnaire

The study focuses on the factors influencing investment decisions of Nepalese investors in the stock market, with a sample size of 110 respondents of Surkhet Valley. The data are collected using structured questionnaire containing yes/no response questions, multiple choice questions, ranking questions, and Likert scale questions. The survey was conducted in June, 2018. The factors influencing investing decision are grouped into three main variables i. e. company related variable (CRV), risk and return related variable (RRV), and market related variable (MRV). In company related variable factors such as management team, financial performance, size, EPS, DPS are included, in risk return related variable expected return, past return, risk of the company, liquid securities etc. are included, and in market related variable factors such as market information, market price per share, dividend growths etc. are included. This study concluded that majority of investor prefer to by stock from primary market, investor analyze the company before making investment decision, investor monitor their portfolio occasionally, and most of the investor use own saving for making investment in stock. Finally, this study concluded that investment decision of Nepalese investor is more influenced by company related variable (CRV) than market related variable (MRV) and risk and return related variable (RRV). Positive and significant coefficient of company related variable (CRV) is observed in all regression models. It can, therefore, be concluded that the Nepalese investor makes investment decision observing the company related variable of Nepalese companies.

scholarly journals Risk-return and difference of Ipe wood price in Pará and São Paulo markets

CERNE ◽  
2014 ◽  
Vol 20 (1) ◽  
pp. 69-72
Author(s):  
Humberto Figueira Barbosa ◽  
Lyvia Julienne Sousa Rego ◽  
Márcio Elly Piero ◽  
Rommel Noce ◽  
Juliana Mendes de Oliveira ◽  
...  
Keyword(s):  
Coefficient Of Variation ◽  
Sao Paulo ◽  
The State ◽  
Price Increase ◽  
Price Difference ◽  
Risk And Return ◽  
Risk Return ◽  
Price Series ◽  
The City ◽  
Geometric Growth

This study estimated the relation risk-return and the trend of the price difference among the markets of consumers of Ipê amarelo (Tabebuia serratifolia) sawn wood in the State of Pará and the cities of Baurú, Campinas, and Sorocaba,. It was considered as indicative of risk the Coefficient of Variation (CV), and as indicative of return the Rate of Geometric Growth (RGG) of the price series that was also used to estimate the trend of the price difference among the markets. It was noted that the risk-return relationship is coherent in all markets, and the city of Sorocaba stands out with the greatest estimative in both risk and return, and presents increase trend of the price difference among State of Pará market, which presented a temporal deficit in the price increase compared to other markets analyzed.

scholarly journals A Study of Investment Behavior of Households in Virudhunagar District

2015 ◽  
Vol 6 (2) ◽  
pp. 19
Author(s):  
M. Selvakumar ◽  
N. Manicka Mahesh
Keyword(s):  
Financial Institutions ◽  
The Other ◽  
Investment Behavior ◽  
Household Savings ◽  
Economic Activities ◽  
Risk And Return ◽  
The People ◽  
Current Consumption ◽  
Level Of Knowledge ◽  
And Behavior

Investment of hard earned money is a crucial activity of every human being. Investment is the commitment of funds which have been saved from current consumption with the hope that some benefits will be received in future. Thus, it is a reward for waiting for money. Savings of the people are invested in assets depending on their risk and return demands, safety of money, liquidity, the available avenues for investment, various financial institutions, etc. On the other hand, the savings provide capital to industry, economic development to the country. In developing country like India, household savings is the major source of capital for economic activities. The study helps to understand the knowledge and behavior of households, the major provider of funds to economic activities of the country. Hence, a study of investment behavior of households has made with the objective of understanding the level of knowledge of households about investment.

scholarly journals An Evaluation of Relationship between Risk, Return and Social Structure and their Impact on Individual Investor’s Behaviour at Pakistan Stock Exchange

2019 ◽  
Vol 15 (1) ◽  
pp. 184-192
Author(s):  
Sumair Farooq ◽  
Keyword(s):  
Social Structure ◽  
Stock Exchange ◽  
Research Paper ◽  
Individual Investors ◽  
Probability Method ◽  
Risk And Return ◽  
Secondary Sources ◽  
Risk Return ◽  
Investor Behaviour

This research paper focusing on twofold purposes: where the first part focuses on providing positive evidence on the nature of relationship between risk and return. Moreover, the second part of the paper deals with analyzing the role of risk and return and social structures on the investor’s behaviour in specific consideration with Pakistan Stock Exchange (PSX) (formerly Karachi Stock Exchange; KSE). This research paper has employed a quantitative approach for the purpose of collection of data and analysis of the results in order to fulfil the aim and objectives of the study. The data for risk and return has been collected from secondary sources. The risk and return for 50 companies that are listed on Pakistan Stock Exchange and at least once paid dividend have been calculated for 11 years which is from 2007 to 2017. Moreover, in order to collect the data for social structure and investor  behaviour  the  researcher  has  used  survey  questionnaire  as  the  research  instrument.  The  questionnaire was filled by 558 individual investors who have invested their capital in the stock of companies listed on Pakistan Stock Exchange. The sampling method that was used for the purpose of selecting respondents for getting the questionnaires filled was non-probability method. For all the independent variables the null hypotheses are rejected thus showing significance of relationship. The results from  the  regression  analysis  has  shown  that  among  all  the  predicting  variables  social  structure explains the lowest amount of variation in investor’s behaviour. Thus, overall it can be said that the results of this study are in alignment with the previous researches.

scholarly journals A Pricing Model in a Sensitive Insurance Market

1982 ◽  
Vol 13 (2) ◽  
pp. 135-149 ◽  
Author(s):  
Franco Moriconi
Keyword(s):  
Policy Instrument ◽  
Performance Criterion ◽  
Insurance Company ◽  
Safety Index ◽  
Expected Return ◽  
Pricing Policy ◽  
Risk Return ◽  
Insurance Portfolio ◽  
Premium Calculation ◽  
Selection Of

A great attention has been devoted, in the actuarial literature, to premium calculation principles and it has been often emphasized that these principles should not only be defined in strictly actuarial terms, but should also take into account the market conditions (Bühlmann (1980), de Jong (1981)).In this paper we propose a decision model to define the pricing policy of an insurance company that operates in a market which is stratified in k risk classes .It is assumed that any class constitutes a homogeneous collective containing independent risks Sj(t) of compound Poisson type, with the same intensity λj. The number nj of risks of that are held in the insurance portfolio depends on the premium charged to the class by means of a demand function which captures the concept of risk aversion and represents the fraction of individuals of , that insure themselves at the annual premium xj.With these assumptions, the return Y on the portfolio is a function of the vector x = (x1, x2, …, xk) of the prices charged to the single classes (and of the time) and x is therefore the decision policy instrument adopted by the company for the selection of the portfolio, whose optimal composition is evaluated according to a risk-return type performance criterion.As a measure of risk we adopt the ultimate ruin probability q(w) that, in the assumptions of our model, can be related to a safety index τ, by means of Lundberg-de Finetti inequality. Even though it has been widely debated in the actuarial field, the use of q(w) offers undeniable operational advantages. In our case the safety index τ can be expressed as a function of x and therefore, in the phase of selecting an efficient portfolio, it becomes the function to be maximized, for a given level M of the expected return.

HOW TO PRICE INFORMATION BY KULLBACK-LEIBLER ENTROPY AND A MOMENT-RETURN RELATION FOR PORTFOLIOS

2001 ◽  
Vol 04 (03) ◽  
pp. 535-543
Author(s):  
ANDREAS DE VRIES
Keyword(s):  
At Risk ◽  
Value At Risk ◽  
Optimization Problem ◽  
Portfolio Theory ◽  
Price Information ◽  
Expected Return ◽  
Risk And Return ◽  
Leibler Information ◽  
Risk Constraint

A connection between the notion of information and the concept of risk and return in portfolio theory is deduced. This succeeds in two steps: A general moment-return relation for arbitrary assets is derived, thereafter the total expected return is connected to the Kullback-Leibler information. With this result the optimization problem to maximize the expected return of a portfolio consisting of n subportfolios by moment variation under a given value-at-risk constraint is solved. This yields an ansatz to price information.

Volatility and Targeted Portfolio Returns

2016 ◽  
Vol 27 (1) ◽  
pp. 122-129 ◽  
Author(s):  
Travis L. Jones ◽  
Steve P. Fraser ◽  
J. Howard Finch
Keyword(s):  
Market Volatility ◽  
Economic Uncertainty ◽  
Expected Return ◽  
Risk And Return ◽  
Trade Off ◽  
Portfolio Returns ◽  
Financial Planners

Financial planners face a consistent challenge to help clients understand the trade-off between risk and return. Most clients relate to the idea of a targeted level of expected return to achieve specific wealth goals but with limited understanding of the required risk. Extended investment horizons require client discipline when market volatility appears to be enhancing the possibility of loss of wealth. The purpose of this article is to illustrate that bearing the risk associated with market volatility can reward clients with the achievement of targeted portfolio returns, even during times of great financial and economic uncertainty. Data from 1994 to 2013 is used to create hypothetical portfolios consisting of stock and bond allocations designed to target specific client return objectives. Graphical charts illustrate the resulting annual volatility associated with multiyear investment horizons. Financial planners can use these examples to better communicate the historical volatility associated with portfolios constructed to deliver target levels of return to clients.

scholarly journals Firms’ legitimation through corporate governance and its association with risk and return in Brazil

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kléber Formiga Miranda ◽  
Jefferson Ricardo do Amaral Melo ◽  
Orleans Silva Martins
Keyword(s):  
Corporate Governance ◽  
Design Methodology ◽  
Management Practices ◽  
Stock Exchange ◽  
Risk And Return ◽  
Content Type ◽  
Risk Return ◽  
Governance Practices ◽  
Practical Implications ◽  
Different Levels

Purpose This study aims to examine the listing of firms at the highest corporate governance level of the Brazilian stock exchange (B3) as a means of legitimation and its relationship with risk and return on investment. Design/methodology/approach This paper analyzes 205 companies from 2010 to 2019, in which firms listed at the Novo Mercado level were compared with groups composed of other firms traded on B3. Findings The main results demonstrate that a listing at the supposedly higher level of corporate governance in Brazil does not indicate lower risk, a higher return or even a better risk-return ratio. Research limitations/implications The findings are restricted to this sample, representing the association identified between the analyzed phenomena and not a cause-effect relationship. Practical implications The highest level of corporate governance in Brazil brings together firms that present a higher risk (at least systematic) and lower returns (at least financial) because they seek to legitimize themselves in the market as firms committed to better management practices. Social implications These findings are useful to investors, the stock exchange, regulatory agents and the companies themselves to reflect on the purpose and usefulness of different levels of corporate governance in Brazil. Originality/value This study differs from the others that relate corporate governance to risk or return because it does not deal individually with corporate governance practices, but rather the phenomenon that is listed in a special governance level, created by the stock exchange, serving as a kind of seal legitimation.

scholarly journals Commodity Indices Risk and Return Analysis Against Libor Benchmark

2018 ◽  
Vol 12 (3-4) ◽  
pp. 55-66
Author(s):  
Subhakara Valluri
Keyword(s):  
Time Series ◽  
Asset Allocation ◽  
Time Series Data ◽  
Geometric Mean ◽  
Precious Metals ◽  
Jel Classification ◽  
Series Data ◽  
Expected Return ◽  
Risk And Return ◽  
Allocation Strategies

This study analyze the risk and return characteristics of commodity index investments against the LIBOR benchmark. Commodity-based asset allocation strategies can be optimized by benchmarking the risk and return characteristics of commodity indices with LIBOR index rate. In this study, we have considered agriculture, energy, and precious metals commodity indices and LIBOR index to determine the risk and return characteristics using estimation techniques in terms of expected return, standard deviation, and geometric mean. We analyzed the publicly available daily market data from 10/9/2001 to 12/30/2016 for benchmarking commodity indices against LIBOR. S&P GSCI Agriculture Index (SGK), S&P GSCI Energy Index (SGJ), and S&P GSCI Precious Metals Index (SGP) are taken to represent each category of widely traded commodities in the regression analysis. Our study uses time series data based on daily prices. Alternative forecasting methodologies for time series analysis are used to cross-check the results. The forecasting techniques used are Holt-Winters Exponential Smoothing and ARIMA. This methodology predicts forecasts using smoothening parameters. The empirical research has shown that the risk of each of the commodity index that represents agriculture, energy, and precious metals sector is smaller compared to its return, whereas LIBOR based interest rate benchmark shows higher risk compared to its return in recession, non-recession and overall periods. JEL Classification: C43, G13, G15

An examination of the risk-return relation in the Australian housing market

2017 ◽  
Vol 10 (3) ◽  
pp. 431-449 ◽  
Author(s):  
Chyi Lin Lee
Keyword(s):  
Housing Market ◽  
Investment Decision ◽  
Housing Markets ◽  
Price Volatility ◽  
Asset Markets ◽  
Risk Level ◽  
Risk And Return ◽  
Content Type ◽  
Volatility Clustering ◽  
Risk Return

Purpose Extensive studies have investigated the relation between risk and return in the stock and major asset markets, whereas little studies have been done for housing, particularly the Australian housing market. This study aims to determine the relationship between housing risk and housing return in Australia. Design/methodology/approach The analysis of this study involves two stages. The first stage is to estimate the presence of volatility clustering effects. Thereafter, the relation between risk and return in the Australian housing market is assessed by using a component generalised autoregressive conditional heteroscedasticity-in-mean (C-CARCH-M) model. Findings The empirical results show that there is a strong positive risk-return relationship in all Australian housing markets. Specifically, comparable results are also evident in all housing markets in various Australian capital cities, reflecting that Australian home buyers, in general, are risk reverse and require a premium for higher risk level. This could be attributed the unique characteristics of the Australian housing market. In addition, there is evidence to suggest that a stronger volatility clustering effect than previously documented in the daily case. Practical implications The findings enable more informed and practical investment decision-making regarding the relation between housing return and housing risk. Originality/value This paper is the first study to offer empirical evidence of the risk-return relationship in the Australian housing market. Besides, this is the first housing price volatility study that utilizes daily data.

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