PGDM (2016-18)

Performa of Final Project Synopsis

 Title of the Project: A STUDY ON EFFICIENCY AND VOLATILTY OF FINANCIAL DERIVATIVES

 Functional Area: FINANCE

 Why is the Particular topic chosen? Different investment avenues are available for investors.

Stock market also offers good investment opportunities to the investor alike all investments,

they also carry certain risks. The investor should compare the risk and expected yields after

adjustment off tax on various instruments while talking investment decision the investor

may seek advice from consultancy include stock brokers and analysts while making

investment decisions. The objective here is to make the investor aware of the functioning of

the derivatives.

Derivatives act as a risk hedging tool for the investors: The objective is to help the investor in

selecting the appropriate derivates instrument to attain maximum risk and to construct the

portfolio in such a manner to meet the investor should decide how best to reach the goals

from the securities available.

 Objectives and scope of study:

Objective: The study includes different strategies of derivatives used in present scenario.

1. To compare the risk involved in derivative instruments for customer.

2. To examine the different strategy which are used by the investors for the purpose of

risk hedging in their portfolio.

Scope: The scope of study is limited to “Derivatives” with special reference to futures, options,

swaps and forwards in the Indian context; the study is not based on the international perspective of

derivative markets.

The study is limited to the analysis made for types of instruments of derivates each strategy is

analyzed according to its risk and return characteristics and derivatives performance against the

profit and policies of the company.

Methodology to be adopted: Achieving accuracy in any research requires in depth study regarding
the subject. As the prime objective of the project is compare various Investment products available
in the market with the existing players in the market and the impact of entry of private players in the
market, the research methodology adopted was basically based on primary data via which the most
recent and accurate piece of first-hand information that could be collected from all possible source.
Secondary data was used to support primary data wherever needed.

For the purpose of study, secondary data will be collected. The observational method is used
to collect the primary data. The necessary data is also been collected from official records and other
published sources. The collected data is classified, tabulated, analyzed and interpreted. Finally
conclusion is draw based on the study and suggestions are offered to the company for increasing its
customer base.

 Data Collection Source::

There are two types of data collection

1. Primary data

2. Secondary data

Primary Data

 Primary data is personally developed data and it gives latest information and offers much
greater accuracy and reliability.

 There are various sources for obtaining primary data i.e., Mail survey, personal interview,

 Field survey, panel research and observation approach etc.

 The study is dependent on primary data to a maximum extent, which is collected by way of
structures personal interview with customers.

Secondary Data

Secondary data is the published data. It is already available for using and its saves time. The
mail source of secondary data are published market surveys, government publications advertising
research report and internal source such as sales, sales records orders, customers complaints and
other business record etc. the study has also depended on secondary data to little extent, which is
collected through internal source.
Sources of Secondary Data:

These source were use to obtain information on, Banks and other institutions history,
current issues, policies, procedures etc, wherever required.

 Internet

 Magazines

 Newspapers

 Journals

 What contribution would the project make? Today's sophisticated international

markets have helped foster the rapid growth in derivative instruments. In the hands of
knowledgeable investors, derivatives can derive profit from:

1. Changes in interest rates and equity markets around the world

2. Currency exchange rate shifts
3. Changes in global supply and demand for commodities such as agricultural products,
precious and industrial metals, and energy products such as oil and natural gas

Adding some of the wide variety of derivative instruments available to a traditional portfolio
of investments can provide global diversification in financial instruments and currencies, help
hedge against inflation and deflation, and generate returns that are not correlated with more
traditional investments. The two most widely recognized benefits attributed to derivative
instruments are price discovery and risk management.

 How you plan to proceed for your project ?(Date wise targets to be mentioned):

1. Understanding every type of derivative.

2. Volatility increased or decreased after future and options introduction.

3. Black and Scholes model after application benefits.

4. How they are useful and how efficiency can be achieved in Market through Efficient

Market Hypothesis.

5. Values calculated through the model and equations introduced have met or not.

6. Divergence of Futures and Spot Prices through the introduction Of Basis

Signature :

Name : Sahil Mittal

Roll no. : FA16015

Mobile No : 7014273117

E-mail : sahilmittal80@yahoo.com
Date : 7 Dec 2017

Approved by faculty mentor (Name) : Dr. Sumesh Raizada

Signature of Faculty Mentor:………………………………………….