VOLATILITY OF SECURITIES TRADED ON BSE AN ANALYTICAL STUDY

BY RAJESH 2491100024 RIMS PROJECT GUIDE PROF. PADMA S RAO RIMS

INTRODUCTION

STOCK MARKET: The stock market is a market in which shares are issued and traded either through exchanges or over-the-counter markets. Also known as the equity market, it is one of the most vital areas of a market economy as it provides companies with access to capital and investors with a slice of ownership in the company and the potential of gains based on the company's future performance.

BSE BSE (Bombay Stock Exchange) is a corporatized and demutualised entity, with a broad shareholder-base which includes two leading global exchanges, Deutsche Bourse and Singapore Exchange as strategic partners. BSE provides an efficient and transparent market for trading in equity, debt instruments, derivatives, mutual funds. It also has a platform for trading in equities of small-andmedium enterprises . Around 5000 companies are listed on BSE making it world's No. 1 exchange in terms of listed members.

STATEMENT OF PROBLEM The Indian securities has always witnessed fluctuation, especially Bombay Stock Exchange (BSE) Sensex have more volatility than the securities traded on the NSE. The study attempts identify the volatility of securities listed in Bombay Stock Exchange with special reference to 10 stocks included in Sensex. Moreover this study helps the potential investors make better investment decision based on calculated beta of 10 shares listed in Bombay Stock Exchange (BSE) Sensex.

METHODOLOGY OBJECTIVES: To study the volatility of selected securities listed in the Bombay Stock Exchange (BSE). To find out how individual stock is performing as compared to market index (Sensex). To offer suggestions to investors for taking better investment decision based on findings of the study.

HYPOTHESIS:

The following Null hypothesis was formulated for the research work. Ho: There is no significant relationship between individual stock price changes and market index (BSE).

PROPOSED TOOLS ALPHA - Alpha represents the forecast of residual return, which we consider the future return of any portfolio. BETA - Beta measures market risk. Beta shows how the price of a security responds to market forces. STANDARD DEVIATION - This is to measure the risk associated with securities. MOVING AVERAGE - Calculates the average of a given data Co-efficient of Correlation: Coefficient of Correlation is a statistical technique, which measures the degree or extent to which two or more variables fluctuate with reference to one another.

RESEARCH DESIGN: TYPE OF STUDY: ANALYTICAL STUDY

PROPOSED PLAN: Industries that are considered to be leading indicators of stock market will be identified in the first stage. One company from each of the selected industries will be identified for inclusion in the sample in the second stage. The study is to be done selecting different companies of different sectors. The price movements will be observed for period of 3 months. Daily price movements of selected scripts and SENSEX will be observed and closing values will be considered for analysis and comparison.

SAMPLE SIZE: For this study ten companies are being selected. All the companies are the major players in the economy and a part of the Sensex. Three months share prices of different sector stocks. Three month index of BSE.

EXPECTATION: In this research an attempt will be made to analyse the study of volatility of the Equity shares of selected 10 companies traded on BSE. It is expected that the study findings would help to offer suggestions to the investors for taking prudent investment decisions.

REFERENCES

Textbooks: BUSINESS STATISTICS S C GUPTA INVESTMENT SECURITIES PORTFOLIO MANAGEMENTPRASANNA CHANDRA RESEARCH METHODLOGY- C R KOTHARI World Wide Web: www.investorwords.com www.capitalmarket.com www.indianinfoline.com www.bseindia.com.

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