A

Project Report

On

A study on Perception of individuals towards stock

market & investment opportunities

SUBMITTED BY

Gautam Thakur

Roll No : 64

T.Y.B.M.S. SEMESTER – VI

PROJECT GUIDE

Dr. Lokesh Gupta

SUBMITTED TO

UNIVERSITY OF MUMBAI

RAJASTHANI SAMMELAN’s

Ghanshyamdas Saraf College

Of Arts & Commerce

Affiliated to University of Mumbai

S.V.Road, Malad (West)

Mumbai – 400064.

A.Y. 2024 – 2025

1
 RAJASTHANI SAMMELAN’S

Ghanshyamdas Saraf College

Of Arts & Commerce

Affiliated to University of Mumbai

S.V.Road, Malad (West) Mumbai –

400064.

A.Y. 2024 – 2025

CERTIFICATE
This is to certify that Miss/Mr. Gautam Thakur , Roll no: 64, has worked and duly
completed her/his Project Work for the degree of Bachelor of Management Studies under
the Faculty of Commerce in the subject of Finance and his project is entitled, “ A study
on Perception of individuals towards stock market & investment opportunities”,
Under my supervision.

I further certify that the entire work has been done by the learner under my guidance and
that no part of it has been submitted previously for any Degree or Diploma of any
University.

It is her/his own work and facts reported by her/his personal findings and investigations.

Name & Signature of:

Project Guide: Principal:

Date:

External Examiner : College

Date : Seal

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 DECLARATION

I, the undersigned, Miss/Mr. Gautam Thakur, a student of Ghanshyamdas Saraf

College of Arts & Commerce,Malad (West) T.Y.B.M.S. SEMESTER – VI hereby declare

that the work embodied in this project work titled “A study on Perception of

individuals towards stock market & investment opportunities ”, forms my

own contribution to the research work carried out under the guidance of Dr./Prof.
Lokesh Gupta is a result of my own research work and has not been previously
submitted to any other University for any other Degree/Diploma to this or any other
University.

Wherever reference has been made to previous works of others, it has been clearly indicated
as such and included in the bibliography.

I, hereby further declare that all information of this document has been obtained and
presented in accordance with academic rules and ethical conduct.

Name and Signature of the student

Certified by

Name and Signature of the Guiding Teacher

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 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh dimensions
in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.

I would like to thank my Principal Dr. Ashwat Desai for providing the necessary facilities
required for completion of this project.

I take this opportunity to thank our Vice-Principal (SFD) Dr. Lipi Mukherjee and BMS
Coordinator Prof. Prajna Shetty for their moral support and guidance.

I would also like to express my sincere gratitude towards Dr. /Prof. Lokesh Gupta whose
guidance and care made the project successful.

I would like to thank my College Library, for having provided various reference books
and magazines related to my project.

Lastly, I would like to thank each and every person who directly or indirectly helped me in
the completion of the project especially my Parents and Peers who supported me
throughout my project.

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 INDEX
Sr. No. Topic Page Number

• Executive Summary

1. 1.Introduction

1.1 Meaning of stock market & investment. 07

1.2 Shares & Securities 08
1.3 Stock exchanges 13
1.4 Types of investors 17
1.5 Factors affecting investment decisions 20
1.6 Functions of SEBI in stock market 23
1.7 Depository 27
1.8 Online trading
32
1.9 Stock market intermediaries
38
2. Research Methodology

2.1 Statement of the Problem

43
2.2 Objectives of the study
44
2.3 Scope of the study
45
2.4 Significance of the study
46
2.5 Research design 47
2.6 Data Collection Method 47
2.7 Sampling Design & 47
2.8 sampling unit 47
2.9 Limitations of the study 48
3. Literature Review 50
4. Data Analysis and Interpretation 60
5. Conclusion and Suggestions 76
• Bibliography/References 79
• Appendix 80

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 Chapter-1
Introduction

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1.1 Meaning of Investment & Stock Market :

Investment refers to the act of allocating money into assets such as stocks, bonds, mutual
funds, real estate, and other financial instruments with the expectation of generating future
returns. Individuals invest their money to achieve financial goals such as wealth creation,
retirement security, and passive income. While investing offers the potential for high returns,
it also comes with risks, as market prices fluctuate based on economic conditions, business
performance, and global events.

The stock market is a financial marketplace where individuals and institutions buy and
sell shares of publicly listed companies. It serves as a crucial component of the
economy, enabling companies to raise capital for expansion and allowing investors to
participate in corporate growth. A well-functioning stock market promotes economic
development by encouraging investment, creating job opportunities, and providing
liquidity to investors.

Why Do People Invest in the Stock Market?

• To Earn Profits – Buy stocks at a low price and sell at a higher price to make
money.
• Dividends – Some companies share their profits with investors as dividends.
• Long-Term Wealth Growth – Investing in good stocks helps build wealth over
time.
• Beat Inflation – Stocks generally grow faster than inflation, protecting purchasing
power.
• Ownership in Companies – Investors become part-owners of companies and share
their success.
• Passive Income – Some stocks provide regular income through dividends.
• Liquidity - stock can be bought and sold easily as compared to other assets.
• Diversification – Investing in different stocks reduces risk compared to putting
money in one place.

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 .
1.2 Shares and Securities :
The stock market consists of various financial instruments, also called securities, that investors
can trade. These include stocks, bonds, mutual funds, and derivatives.

What are Shares ?

A share represents a unit of ownership in a company. When a person buys shares of a company,
they become a shareholder, meaning they own a portion of the company. Shares allow
companies to raise funds from the public for business expansion, while shareholders benefit
from dividends(profit-sharing) and capital appreciation (increase in share price).Shares are an
essential part of the stock market and are traded on stock exchanges like the Bombay Stock
Exchange (BSE) and the National Stock Exchange (NSE) in India.

Types of Shares :

1.Equity Shares(Common Shares) :

Equity shares are the most common type of shares issued by companies. These shares give
investors ownership in the company and the right to vote on important decisions.
Features of Equity Share :
1.Ownership right :
Equity shareholders are the real owners of the company.Their ownership is proportional to
the number of shares they hold.
2.voting right :
equity shareholder has the right to vote in companies decision and major decisions like mergers,
acquisition, board elections Require shareholders approval.
3.Divided earning :
Companies may distribute profits as dividends, but they are not fixed or guaranteed.If a
company has high profits, it may declare dividends.If there are losses, shareholders may
not receive any dividend.
4.High return, high risk
Equity shares are risky because their value depends on market conditions and company
performance.Potential for high returns through capital appreciation (increase in share
price).

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5.Liquidity :
Equity shares are highly liquid because they can be easily bought and sold on stock
exchanges.Investors can sell their shares whenever they need money.

1.Preference Shares :

Preference shares provide investors with a fixed dividend and priority over equity
shareholders in receiving payments. However, they usually do not have voting rights in
company decisions. Preference shares can be further classified based on their
features. Cumulative preference shares allow unpaid dividends to be carried forward
and paid in future years, whereas non-cumulative preference shares do not have this
benefit. Some preference shares, known as convertible preference shares, can be
converted into equity shares after a specified period, while non-convertible preference
shares remain as fixed-income securities throughout their tenure.

Features of preference share :

1.Fixed dividend :
One of the biggest advantages of preference shares is that investors receive a fixed
dividend every year. Unlike equity shareholders, who get dividends based on
company profits, preference shareholders receive a pre-decided percentage of
dividends. This makes them similar to debt instruments, as they provide a regular
income.
2.Repayment priority :
Preference shareholders have an advantage over equity shareholders when it comes
to dividend payments. If a company earns profits and declares dividends, preference
shareholders are paid first, and only after that are equity shareholders considered. This
feature makes preference shares a safer investment compared to equity shares.
4.No voting right :
Unlike equity shareholders, who have voting rights in company decisions, preference
shareholders usually do not have voting rights in general company matters. This means
that while they enjoy financial benefits, they have limited control over company

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decisions. However, in some cases, if the company fails to pay dividends for a long
time, preference shareholders may be granted voting rights.
5..Cumulative and Non-Cumulative Dividends :
Some preference shares come with a cumulative dividend feature, meaning if the
company skips dividend payments in one year, the unpaid dividends are carried
forward and paid in the future. On the other hand, non-cumulative preference
shares do not have this benefit—if dividends are not paid in a given year, they are
lost forever.
6..Co Convertible and non convertible option :
Some preference shares come with a conversion feature, meaning they can be
converted into equity shares after a certain period. These are called convertible
preference shares. On the other hand, non-convertible preference sharesremain as
preference shares throughout their life and cannot be converted into equity.
7.Redeemable and non-redeemable option :
Companies may issue redeemable preference shares, which means they will buy
back the shares from investors after a certain period. This provides an exit
option for investors. In contrast, irredeemable preference shares do not have a fixed
redemption date, meaning the company is not obligated to buy them back.

Thus,Preference shares are a mix between equity and debt—they provide fixed
returns like debt instruments but also carry some features of shares. They are a
great option for investors looking for stable income with lower risk. However, they
do not offer voting rights and have lower potential for high returns compared
to equity shares.

What are securities ?

Securities are financial instruments that represent owners, debt, or rights to ownership
in an entity. They are tradable assets used by companies, governments, and financial
institutions to raise capital from investors. Securities can be broadly classified into equity

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securities (stocks), debt securities (bonds), derivatives, and hybrid instruments. Investors
buy securities to earn returns through dividends, interest payments, or capital appreciation.

Types of securities :

1.Debt securities :Debt securities are fixed-income instruments that represent a loan given by
an investor to an entity (government or corporation) in exchange for periodic interest payments
and the return of principal at maturity. Common types of debt securities include government
bonds, corporate bonds, and debentures. These securities are considered safer than equities
because they provide fixed returns through interest payments, regardless of market conditions.
However, they typically offer lower returns compared to equity investments. Debt securities
are ideal for conservative investors looking for stable income and lower risk. The major risk
associated with debt securities is default risk, where the issuer may fail to pay back the
borrowed amount.

2.Derivatives : Derivatives are financial instruments whose value is derived from an

underlying asset, such as stocks, commodities, currencies, or interest rates. They are used
mainly for hedging risks or speculation. The most common types of derivatives are futures,
options, forwards, and swaps. A futures contract allows an investor to buy or sell an asset at a
predetermined price at a future date, while options provide the right but not the obligation to
do so. These instruments help businesses and investors manage risk, especially in industries
where prices fluctuate significantly, such as commodities and foreign exchange. However,
derivatives can be highly complex and risky, making them suitable only for experienced
investors.

3.Hybrid securities : Hybrid securities combine the features of both equity and debt
instruments, offering a balance between risk and return. Examples include convertible bonds,
preference shares, and mezzanine financing. Convertible bonds can be converted into company
shares at a predetermined price, giving investors the security of a bond with the potential upside
of stock appreciation. Preference shares provide fixed dividends like debt but also offer
ownership rights under specific conditions. These securities are less risky than equity but
riskier than traditional debt instruments, making them attractive for investors looking for
moderate risk and steady income.

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4.ETF : An Exchange-Traded Fund (ETF) is a type of investment fund that trades on a stock
exchange, just like a regular stock. It is a basket of different securities, such as stocks, bonds,
or commodities, combined into a single fund. ETFs allow investors to diversify their
investments without having to buy individual assets separately.For example, if you invest in an
S&P 500 ETF, you are essentially buying small portions of the top 500 companies in the U.S.
stock market in one go. This makes ETFs a great option for investors who want diversification,
lower risk, and ease of trading.

5.Mutual fund : A mutual fund is a type of investment security that pools money from multiple
investors to invest in a diversified portfolio of stocks, bonds, or other assets. It is managed by
professional fund managers who decide where to invest based on the fund’s objective. Mutual
funds allow investors to diversify their investments without having to buy individual securities,
reducing overall risk.

Mutual funds are classified into different types, such as equity funds (invest in stocks), debt
funds (invest in bonds), hybrid funds (a mix of stocks and bonds), and index funds (track a
stock market index like the S&P 500 or Nifty 50). Unlike ETFs, mutual funds are not traded
on stock exchanges; instead, investors buy or sell them at the Net Asset Value (NAV), which
is calculated at the end of each trading day.

The main advantages of mutual funds include professional management, diversification,

affordability, and convenience. However, they also have some drawbacks, such as management
fees, exit loads (charges for early withdrawal), and less control over individual stock selection.
Mutual funds are ideal for long-term investors looking for a hands-off investment approach
with steady returns over time.

Thus, Securities play a vital role in financial markets, offering various investment
opportunities.Debt securities offer stable, fixed income with lower risk. Derivatives are useful
for hedging and speculation but can be complex and risky. Hybrid securities combine features
of both debt and equity, balancing risk and reward. Alternative securities, including ETFs,
mutual funds, REITs, and commodities, provide diversification and flexibility.

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1.3 Stock Exchanges :

A stock exchange is a regulated marketplace where investors can buy and sell financial
securities such as shares, bonds, and derivatives. It acts as an intermediary between companies
looking to raise funds and investors looking for profitable investment opportunities. Stock
exchanges play a crucial role in the economy by providing a transparent, secure, and efficient
platform for trading securities. They ensure liquidity, meaning that investors can easily convert
their investments into cash whenever needed. Without stock exchanges, investors would have
difficulty finding buyers or sellers for their securities, making the process of investment highly
complicated.

Apart from trading, stock exchanges ensure investor protection by enforcing strict regulations
and listing requirements. In India, the Securities and Exchange Board of India (SEBI) is the
governing body responsible for monitoring and regulating stock exchanges. SEBI ensures that
companies disclose their financial information transparently and prevents fraudulent activities,
insider trading, and market manipulation. These regulations build investor confidence and
promote fairness in the stock market.

Stock exchanges also contribute to the economic growth of a country by encouraging

investments. They provide companies with easy access to funds, allowing businesses
to expand, create jobs, and contribute to national development. Additionally, they
offer various investment opportunities to individuals, institutional investors, and
foreign investors, helping them grow their wealth over time.

Stock exchanges also contribute to the economic growth of a country by encouraging

investments. They provide companies with easy access to funds, allowing businesses
to expand, create jobs, and contribute to national development. Additionally, they
offer various investment opportunities to individuals, institutional investors, and
foreign investors, helping them grow their wealth over time. SEBI ensures that
companies disclose their financial information transparently and prevents fraudulent activities,
insider trading, and market manipulation. These regulations build investor confidence and
promote fairness in the stock market.

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BSE : The Bombay Stock Exchange (BSE) is one of the largest stock exchanges in the world
in terms of the number of listed companies, while the National Stock Exchange (NSE) is India’s
most active exchange in terms of trading volume. Both exchanges operate advanced electronic
trading platforms that ensure fast, secure, and efficient transactions for investors across the
country.

The Bombay Stock Exchange (BSE) is India’s oldest and one of the largest stock exchanges
in the world. Established in 1875, it provides a platform for buying and selling stocks, bonds,
derivatives, mutual funds, and other financial instruments. BSE plays a crucial role in the
Indian financial market by offering companies a place to raise capital and allowing investors
to trade securities efficiently.

BSE’s benchmark index, SENSEX, tracks the top 30 financially stable companies listed on the
exchange. It is a key indicator of market trends and investor sentiment in India.Largest Number
of Listed Companies.BSE has over 5,000 listed companies, making it one of the largest stock
exchanges globally in terms of the number of listed firms

Advanced Trading PlatformBSE operates on BOLT (BSE On-Line Trading System), a high-
speed electronic trading platform that ensures fast and secure transactions.The exchange is
regulated by the Securities and Exchange Board of India (SEBI) to ensure fair trading practices,

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Wide Range of Investment Options:Apart from stocks, BSE offers trading in mutual funds,
debt instruments, exchange-traded funds (ETFs), derivatives, and bonds, catering to different
investor needs.investor protection, and market transparency.

One of its primary functions is to provide a centralized platform for buying and selling
securities, ensuring that investors can trade stocks, bonds, and other financial instruments
efficiently. By enabling companies to raise capital through Initial Public Offerings (IPOs) and
follow-on offerings, BSE plays a vital role in supporting business expansion and industrial
growth. It allows companies to access public funds, reducing their dependence on loans and
other forms of borrowing.Another crucial function of BSE is price discovery, which helps
determine the fair market value of securities based on demand and supply forces. The S&P
BSE SENSEX, which tracks the performance of the top 30 companies listed on the exchange,
acts as a barometer of market trends and investor sentiment.

NSE : The National Stock Exchange (NSE) is India’s largest stock exchange in terms of
trading volume and market capitalization. Established in 1992, NSE was created to bring
transparency, efficiency, and modern technology to India’s financial markets. Before its
establishment, stock trading in India was largely unregulated, with manual systems and a lack
of investor protection. NSE revolutionized the Indian stock market by introducing an electronic

15
trading system, ensuring faster execution of trades, reduced fraud, and increased market
accessibility for investors across the country.

NSE is fully automated and operates an advanced trading platform, allowing investors to trade
securities in real-time. It facilitates the buying and selling of equities, derivatives, debt
instruments, exchange-traded funds (ETFs), and mutual funds. It also provides a fair and
transparent market by ensuring that prices of securities are determined based on demand and
supply rather than manipulation or unfair practices. The Securities and Exchange Board of
India (SEBI) regulates the NSE to ensure compliance with market rules and investor protection
policies.

The National Stock Exchange performs several critical functions that contribute to the growth
and stability of India's financial markets. One of its primary roles is to provide a centralized
marketplace for trading securities, ensuring a transparent and efficient mechanism for both
buyers and sellers. By offering companies a platform to raise capital through Initial Public
Offerings (IPOs) and subsequent listings, NSE helps businesses expand, create jobs, and
contribute to economic development.

Another major function of NSE is price discovery, where securities' prices are determined
through demand and supply dynamics. Since NSE operates with an electronic trading system,
market prices reflect real-time transactions, making the stock market more efficient and less
susceptible to manipulation. The NIFTY 50 index, which tracks the performance of the top 50
companies, acts as a key indicator of economic conditions and investor sentiment.

The exchange has also focused on technological advancements, operating on the National
Exchange for Automated Trading (NEAT) system, which executes trades at lightning-fast
speeds. With online trading platforms and mobile apps, NSE has made stock market
participation accessible to a larger audience, including retail investors.

The National Stock Exchange performs several critical functions that contribute to the growth
and stability of India's financial markets. One of its primary roles is to provide a centralized
marketplace for trading securities, ensuring a transparent and efficient mechanism for both
buyers and sellers. By offering companies a platform to raise capital through Initial Public.

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1.4 Types of investors :

Investors in the stock market can be categorized based on their investment approach, risk
tolerance, and financial objectives. The four main types of investors are retail investors,
institutional investors, foreign investors, and speculators vs. long-term investors. Each type
plays a crucial role in shaping market trends and liquidity.

1.Retail investors : Retail investors are individuals who invest in the stock market with their
personal savings to grow their wealth. They typically invest in stocks, mutual funds, exchange-
traded funds (ETFs), or bonds. Unlike large institutions, retail investors usually invest smaller
amounts and have limited market influence.

Retail investors can follow different strategies: -

Long-term investors use a buy-and-hold strategy, meaning they keep their investments for
years to benefit from capital appreciation and compounding.Short-term traders actively buy
and sell stocks to profit from market fluctuations in a short period.Example: An individual
investing ₹50,000 in mutual funds for retirement is a retail investor.

2.Institutional investors : Institutional investors are large organizations that invest huge
amounts in financial markets. These include mutual funds, pension funds, insurance
companies, hedge funds, and banks. Since they deal in bulk transactions, their buying and
selling activities can significantly impact stock prices.Institutional investors conduct in-depth
research and analysis before investing, and they often have professional fund managers making
decisions on their behalf. They play a crucial role in maintaining market stability and
liquidity.Example: The Life Insurance Corporation of India (LIC) investing billions in stocks
is an institutional investor.

3.Speculators : Investors can also be classified based on their investment horizon and risk-
taking approach.These investors trade in stocks or derivatives with the intention of making
quick profits from short-term price fluctuations. They take high risks and often use techniques
like day trading, swing trading, or margin trading. Speculators do not focus on a company’s
long-term growth; instead, they take advantage of market volatility.

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4.Angel investors : Angel investors are wealthy individuals who provide financial support
to startups or early-stage businesses in exchange for ownership equity or convertible debt. They
take on high risks because startups have uncertain futures, but they also have the potential for
huge returns if the company succeeds.

Example: An entrepreneur looking for funding to start a tech company may approach an angel
investor for capital.

5.Venture capitalists : Venture capitalists are professional investors or firms that provide
funding to high-growth startups and emerging businesses. Unlike angel investors (who use their
own money), VCs manage large funds collected from multiple investors and invest in
businesses with the potential for high returns. VCs usually take an active role in managing the
company and may sell their stake once the company grows or goes public.

Example: Sequoia Capital investing in companies like Zomato and Flipkart.

6.private equity investors : Private equity (PE) investors invest directly in private
companies or buyout public companies, taking significant ownership stakes. They typically
improve the business and later sell their stake for profit. Private equity investments are made
through PE funds, leveraged buyouts (LBOs), or direct acquisitions.

Example: A private equity firm buying a struggling company, restructuring it, and later selling
it for a profit.

7.Hedge fund investors : Hedge fund investors invest in high-risk, high-return investment
funds that use aggressive strategies like short selling, derivatives trading, and leveraging
borrowed money. Hedge funds aim for maximum profit in any market condition and are only
available to wealthy individuals or institutional investors due to their high entry requirements.

Example: A hedge fund betting against a stock's price by short selling it during a market
downturn.

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8.Active vs Passive investors : Active Investors carefully study the market and frequently
buy and sell stocks to maximize returns. They focus on timing the market, analyzing trends,
and picking stocks.

Example: A trader who buys undervalued stocks and sells them when they rise in price.

Passive Investors invest for the long term and do not actively trade. They often invest in index
funds or ETFs that track the overall market. This approach reduces risks and trading costs.

Example: An investor who puts money in an S&P 500 ETF and holds it for 20 years.

9.DIIS : Domestic Institutional Investors are investment firms or institutions within a country
that invest large amounts in the stock market. They include mutual funds, pension funds, banks,
and insurance companies. DIIs play a crucial role in stabilizing markets, especially when
foreign investors withdraw capital.l

Example: LIC or SBI Mutual Fund investing in Indian stocks.

10.Divided investors : Dividend investors focus on stocks that pay regular dividends (a portion
of a company’s profit). They prefer stable, well-established companies that provide consistent
income rather than capital appreciation.

Example: Investing in companies like HDFC Bank or Tata Consultancy Services (TCS) for
their regular dividend payouts.

11.Growth investors : Growth investors look for companies with high growth potential,
even if they currently do not pay dividends. They invest in companies that are expanding
rapidly and have the potential for significant future profits. Growth stocks are usually found in
the technology and innovation sectors.

Example: Investing in companies like Tesla, Amazon, or Zomato expecting their share prices
to rise over time.

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1.5 Factors affecting investment decision :

Investment decisions are influenced by several factors that help investors determine where,
when, and how much to invest. A well-thought-out investment strategy considers various
aspects, such as risk, expected returns, market conditions, and liquidity. Below are the key
factors that impact investment decisions:

1.Risk tolerance : Every investment carries a certain level of risk, and an investor’s ability
to handle that risk plays a crucial role in decision-making. Some investments, like stocks and
cryptocurrencies, are highly volatile and can lead to significant profits or losses. On the other
hand, safer investments like fixed deposits and government bonds provide stability but with
lower returns. An investor’s risk appetite is influenced by factors such as age, financial
obligations, and investment experience. Younger investors may take higher risks for potential
long-term gains, whereas those nearing retirement prefer secure investments to protect their
capital.

2.Investment objective : The purpose of an investment determines the type of asset an

investor chooses. Some investors seek long-term wealth creation, while others focus on regular
income or capital preservation. For example, an individual planning for retirement may prefer
pension funds or fixed-income securities, while someone looking for quick profits might trade
in stocks or commodities. Clearly defining financial goals helps in selecting the most
appropriate investment options that align with an investor’s needs.

3. Market condition : The overall economic and financial market situation has a significant
impact on investment decisions. A booming economy with rising stock prices encourages
investors to put money into equities, whereas during an economic slowdown, investors may
shift towards safer assets like gold, bonds, or fixed deposits. Inflation, interest rates, and
government policies also affect the performance of different asset classes. Keeping track of
market trends helps investors make informed decisions about when to enter or exit investments

4. Return on investment : The expected return on an investment is a key factor in decision-

making. Investors seek opportunities that provide the highest possible returns while minimizing
risk. Some assets, like stocks and real estate, have the potential for high returns but come with
greater uncertainty. Others, like savings accounts and government bonds, offer lower but more

20
stable returns. Before investing, individuals analyze past performance, market trends, and
economic conditions to estimate how much profit they can expect over time.

5.Liquidity : Liquidity refers to how easily an investment can be converted into cash without
significant loss in value. Stocks and mutual funds are considered highly liquid because they
can be quickly sold in the market. In contrast, assets like real estate and fixed deposits have
lower liquidity, as selling a property or withdrawing a fixed deposit may take time. Investors
who might need quick access to their money prefer liquid assets, while those investing for the
long term may not prioritize liquidity.

6.Time Horizon : The duration for which an investor plans to hold an investment
impacts the type of asset they choose. A short-term investor may prefer options like
treasury bills or savings accounts, while long-term investors may focus on stocks,
mutual funds, or real estate. Longer investment horizons allow investors to take on
more risk, as short-term market fluctuations become less relevant over time. On the
other hand, those who need their money in the near future prefer safer investments
that provide stable returns.

7.Tax implication : Taxation plays an important role in investment decisions, as

different assets come with varying tax benefits and liabilities. Some investments,
like tax-saving mutual funds and public provident funds, offer deductions under tax
laws, making them attractive for those looking to reduce taxable income. Other
investments, such as fixed deposits and capital gains from stocks, may be subject to
taxation, which reduces overall returns. Smart investors choose tax-efficient options
that help them maximize their earnings while minimizing tax burdens.

8. Diversification : Diversification is the practice of spreading investments across different

asset classes to reduce overall risk. Instead of putting all their money in one type of investment,
investors distribute it among stocks, bonds, gold, and real estate to minimize potential losses.
If one asset underperforms, gains from others can help balance the overall portfolio. A
diversified approach ensures that investors are not overly dependent on a single market or
sector, reducing the impact of negative market movements.

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9.Inflation : Inflation reduces the purchasing power of money over time, which means the
returns on investments must be higher than the inflation rate to maintain real value. Fixed-
income investments, such as savings accounts and bonds, may not always provide inflation-
beating returns, leading to a decrease in wealth over time. Investors often look for assets like
equities, real estate, and commodities, which have historically outperformed inflation and
provided better long-term returns. Considering inflation while making investment decisions
helps in preserving and growing wealth effectively.

10.Interest rate : Interest rates influence investments, particularly fixed-income

securities like bonds and fixed deposits. When interest rates rise, new bonds and fixed deposits
become more attractive as they offer higher returns, while the prices of existing bonds fall.
Conversely, when interest rates decline, borrowing becomes cheaper, leading to increased
investment in stocks and real estate. Investors consider interest rate trends before choosing
between fixed-income and equity investments to ensure they get the best returns.

11.Cost and fees : The expenses involved in investing—such as management fees,

brokerage commissions, and transaction costs—can have a significant impact on overall
returns. Even small fees can add up over time and reduce net gains,

12.currency exchange rate : For investments in foreign assets, fluctuations in currency

exchange rates can impact returns. Even if an investment performs well in its local market,
adverse movements in exchange rates can reduce profits when converting back to the investor’s
home currency. It is important to consider this additional layer of risk when diversifying
internationally.

Thus, Investment decisions are influenced by multiple factors, including risk tolerance,
financial goals, market conditions, expected returns, liquidity needs, tax implications, and
diversification strategies. By carefully evaluating these aspects, investors can make well-
informed choices that align with their financial needs and risk appetite. A balanced approach
to investing, considering both short-term and long-term goals, helps in achieving financial
stability and wealth growth over time.

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1.6 Functions of SEBI in stock market :

The Securities and Exchange Board of India (SEBI) is the regulatory authority that
oversees and governs the securities market in India. It was established on April 12,
1988, as a non-statutory body to regulate stock exchanges and prevent unethical trading
practices. However, due to increasing market frauds, SEBI was granted statutory
powers through the SEBI Act of 1992, making it the primary authority responsible for
protecting investors, ensuring fair trading, and promoting the growth of the Indian
capital market. SEBI acts as the watchdog of the securities market, ensuring that all
financial intermediaries operate within legal and ethical boundaries. It plays a crucial
role in maintaining investor confidence and financial stability by preventing fraud,
market manipulation, and insider trading.

SEBI operates as an independent body under the Ministry of Finance and is headquartered in
Mumbai, Maharashtra, with regional offices in New Delhi, Kolkata, Chennai, and Ahmedabad.
The board of SEBI consists of nine members, including the Chairman, representatives from the
Ministry of Finance and RBI, and other government-appointed members. This structure allows

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SEBI to function autonomously while ensuring coordination with the government and financial
institutions. The main objectives of SEBI are to protect investor interests, regulate the
functioning of stock exchanges and financial intermediaries, and promote market development
by introducing modern financial instruments and digital trading platforms.

SEBI (Securities and Exchange Board of India) has grown a lot since it was set up in 1988 to
regulate the stock market and protect investors. In 1992, it became a powerful legal authority
to stop fraud and ensure fair trading. Over time, SEBI introduced important changes, like
electronic share trading, strict rules for companies raising money, and better protection for
small investors. It also allowed foreign investors to invest in Indian markets and made trading
faster and more transparent. In recent years, SEBI has focused on improving corporate
governance, preventing scams, and making investment safer for everyone. Its growth has
helped India’s stock market become more organized, fair, and investor-friendly.

Following are some of its functions :

1.Protect investors interest : One of the most important functions of SEBI is to

safeguard investors from fraudulent practices and ensure a fair trading environment. Before
SEBI was established, investors were vulnerable to stock market scams, insider trading, and
misleading advertisements. SEBI enforces strict disclosure norms, making it mandatory for
companies to publish accurate financial statements, earnings reports, and material information
to help investors make informed decisions. The board also takes action against companies or
market participants involved in price manipulation, insider trading, and fraudulent investment
schemes. Additionally, SEBI has introduced grievance redressal mechanisms such as SCORES
(SEBI Complaints Redress System), which allows investors to lodge complaints against
stockbrokers, mutual fund companies, or listed firms engaging in unethical activities.

2.Regulation of stock exchanges : SEBI regulates all stock exchanges in India,

including the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE), to ensure
smooth and transparent market operations. It establishes rules and guidelines for stockbrokers,
sub-brokers, depositories, and investment bankers to prevent market manipulation and ensure
fair trading. SEBI conducts regular audits and inspections of stock exchanges and financial
intermediaries to detect any irregularities or unethical behavior. If any violations are found, it

24
imposes penalties, suspensions, or legal action against the offenders. By maintaining strict
oversight over stock exchanges and market participants, SEBI ensures a well-regulated
financial system that promotes investor confidence and market stability.

3.Ensure free & transparent trading : SEBI ensures that all trading activities in
the stock market are conducted in a transparent and fair manner. It sets strict listing
requirements for companies that want to issue shares to the public through Initial Public
Offerings (IPOs). Companies must provide detailed prospectuses, financial disclosures, and
intended use of funds before listing their shares on a stock exchange. SEBI also ensures that
stock prices reflect actual market demand and supply rather than artificial price rigging by
traders. It has implemented an electronic trading system that allows investors to buy and sell
shares efficiently without interference from intermediaries. These measures prevent stock price
manipulation, increase market efficiency, and protect retail investors from falling victim to
fraudulent schemes.

4.prevention from fraud : Market manipulation and fraudulent trading practices can
lead to financial instability and loss of investor confidence. SEBI continuously monitors stock
market transactions to detect insider trading, price rigging, and unfair trade practices. It takes
strict legal action against individuals or companies engaging in unethical behavior by imposing
monetary fines, trading bans, or criminal prosecution. SEBI has implemented stringent insider
trading regulations that prohibit company executives and employees from using confidential
information to make personal gains. By ensuring that all market participants follow ethical
trading practices, SEBI prevents financial scams and maintains a well-functioning and
trustworthy stock market environment.

5.Development of the securities market :Apart from regulating the stock market,
SEBI also focuses on the growth and modernization of the securities market. It has introduced
digital trading platforms, electronic settlement systems, and automated risk management
mechanisms to enhance market efficiency. SEBI encourages the introduction of new financial
instruments such as Exchange-Traded Funds (ETFs), derivatives, and Real Estate Investment
Trusts (REITs) to provide diverse investment opportunities. It also promotes foreign
investments in India by ensuring that the market adheres to international standards of financial
regulation and transparency. By developing new investment options and making trading

25
systems more efficient, SEBI plays a key role in the expansion and globalization of India’s
financial markets.

6.Regulations of mutual fund & credit rating agencies :SEBI regulates

mutual fund companies to ensure that they operate transparently and manage investors' money
responsibly. It has implemented strict guidelines regarding fund management, asset allocation,
and investor disclosures. SEBI also oversees credit rating agencies such as CRISIL, ICRA, and
CARE, ensuring that they provide unbiased and accurate credit ratings for companies issuing
bonds or securities. These measures help investors make informed decisions about where to
invest their money while preventing fraudulent practices in the financial services industry. To
prevent conflicts of interest, CRAs must operate independently and avoid financial ties with
the entities they rate. Regular audits and compliance checks by SEBI ensure that ratings remain
fair and objective. These regulations help maintain the integrity of India’s financial markets by
fostering investor confidence in mutual funds and credit rating agencies.

7.Regulations of mergers & acquisitions :Mergers and acquisitions can significantly

impact stock prices and investor interests. SEBI ensures that all mergers, acquisitions, and
takeovers are conducted fairly and transparently. It has implemented rules that protect minority
shareholders from being exploited during corporate takeovers. Additionally, SEBI enforces
corporate governance norms that require companies to follow ethical business practices,
disclose financial risks, and ensure fair treatment of shareholders. These regulations promote
investor confidence and ensure that companies operate in an accountable and responsible
manner.

8.Education & awareness : SEBI actively works to educate investors about the risks and
opportunities in the stock market. It conducts seminars, online courses, and awareness
campaigns to teach retail investors about investment strategies, risk management, and fraud
prevention. SEBI’s investor education initiatives help individuals make informed and
responsible investment decisions, reducing the likelihood of financial losses due to scams or
misinformation. By promoting financial literacy, SEBI encourages more people to participate
in the stock market, contributing to the overall growth of economic.

10.Regulations of commodity market : Initially, SEBI was responsible only for the
securities market, while the Forward Markets Commission (FMC) regulated commodity
trading. However, in 2015, SEBI took over FMC, making it the sole regulator of both securities

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and commodity markets in India. SEBI ensures fair trading practices in commodities like gold,
oil, and agricultural products while preventing price manipulation and speculation in the
commodities market.

SEBI is the cornerstone of India’s financial regulatory framework, ensuring that the securities
market functions smoothly and transparently. By regulating stock exchanges, financial
intermediaries, and corporate governance, SEBI creates a safe and fair trading environment for
investors. Its efforts in preventing fraud, modernizing financial markets, and educating
investors have strengthened India’s stock market and increased investor confidence. SEBI’s
continuous enforcement of rules and proactive measures in market development make it an
indispensable institution for India’s economic growth and financial stability.

1.7 What is depository ?

A depository is a financial institution that holds securities such as stocks, bonds, mutual fund
units, and other financial instruments in an electronic (dematerialized) format. It acts as a
custodian of securities, ensuring safe storage and seamless transactions in the capital market.
Depositories eliminate the need for physical certificates, reducing risks like loss, theft, forgery,
and delays in trading. They facilitate smooth buying, selling, and transfer of securities through
electronic book-keeping, making the stock market more efficient and transparent.

Depositories play a crucial role in modernizing and digitizing the securities market, allowing
investors to trade seamlessly while reducing paperwork and operational risks. The system is
similar to how a bank holds money for account holders, but instead of cash, depositories hold
securities in electronic form.

In India, there are two main depositories regulated by the Securities and Exchange Board of
India (SEBI):

• National Securities Depository Limited (NSDL)

• Central Depository Services Limited (CDSL)

1.National Securities Depository Limited (NSDL) :

NSDL is India's first and largest depository, established in 1996 to facilitate electronic trading
and safe storage of securities. It was promoted by the National Stock Exchange (NSE) and is
headquartered in Mumbai. NSDL eliminates the risks of handling physical share certificates

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by converting them into electronic form through Demat accounts, which investors can access
via Depository Participants (DPs) like banks and brokers. It offers various services, including
securities transfers, e-voting, pledging of shares, and settlement of trades. Though primarily
associated with NSE, NSDL allows trading across multiple stock exchanges and holds a larger
share of total assets compared to CDSL. Before NSDL was established, stock market
transactions were conducted using physical share certificates, which led to problems like
delayed settlements, fake certificates, and high transaction costs. To address these issues,
NSDL was incorporated in August 1996, and it became operational in November 1996.

2.Central Depository Services Limited (CDSL) :

CDSL, established in 1999, is the second depository in India, promoted by the Bombay Stock
Exchange (BSE). Like NSDL, CDSL provides Demat account services, ensuring that securities
such as stocks, bonds, and mutual funds are held electronically, reducing the risk of fraud or
loss. It allows investors to buy, sell, and transfer securities securely through registered
Depository Participants (DPs). CDSL is known for its strong retail investor base and easy
access to online services, such as e-voting and electronic tax filing (e-CAS). While it primarily
works with BSE, it also supports transactions on other exchang

Functions of depositaries :

1.Holding securities in Dematerialised form : One of the primary functions of a

depository is to store securities in electronic form rather than physical certificates. This process,
known as dematerialization, makes securities safer and easier to manage. Investors who hold
shares in Demat accounts (opened with a Depository Participant) can buy, sell, and transfer
securities effortlessly without handling paper documents. By eliminating physical records, the
depository reduces risks such as loss, theft, forgery, and damage to share certificates.

2.Facilitate Trade settlement : Whenever an investor buys or sells shares on a stock

exchange, the depository ensures that the securities are transferred smoothly. After a
transaction is completed, the depository updates the ownership records electronically, ensuring
that shares are credited to the buyer’s account and debited from the seller’s account. This
function plays a vital role in ensuring fast, secure, and error-free trade settlements, typically
within T+2 days (two business days after the trade date) in India.By integrating with stock
exchanges, clearing corporations, and banks, depositories have significantly reduced settlement

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risks, improved liquidity, and enhanced market transparency, making India’s securities market
more secure and investor-friendly.

3.Safeguarding investors interests :A depository ensures that securities held by

investors are safe and legally protected. It prevents unauthorized transfers, fraud, and
duplication of securities by maintaining a centralized electronic record of all holdings.
Investors receive regular account statements, allowing them to track their investments and
ensure transparency. Depositories also verify and authenticate ownership before allowing any
transfer of securities, ensuring that investors' rights are protected

4.Reducing cost & risk : By storing securities in digital form, depositories eliminate the risks
associated with physical share certificates, such as damage, loss, theft, or forgery. This also
reduces transaction costs, as electronic transactions do not require stamp duty, courier charges,
or handling fees, which were common with physical trading. The shift to an electronic system
improves efficiency and makes investing more affordable for both retail and institutional
investors.

5.Pledging & Loan facilities :Depositories enable investors to use their securities as collateral
to obtain loans from banks and financial institutions. Instead of physically submitting share
certificates, investors can pledge their Demat holdings electronically, making the process
quicker and hassle-free. Once the loan is repaid, the pledged securities are released back to the
investor’s Demat account. This facility helps investors access funds while continuing to hold
their investments.

6.Corporate action management :A depository helps in processing corporate actions such as

dividends, interest payments, bonus shares, rights issues, and stock splits. When a company
declares dividends or issues bonus shares, the depository ensures that these benefits are
automatically credited to investors' Demat accounts. This removes the need for manual
paperwork and ensures that investors receive their benefits on time.

7.Prevention of fraud and & unauthorised transactions : Depositories have strict security
measures to prevent fraudulent activities in the stock market. They use unique identification
numbers (ISINs) for securities, multi-level authentication, and transaction alerts to detect and
prevent unauthorized trading. Additionally, investors receive SMS and email notifications for
every transaction, allowing them to monitor their holdings in real time.

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8.Nomination & Transfer of securities :Depositories allow investors to nominate a
beneficiary for their Demat account. In the event of an investor’s death, the nominated person
can inherit the securities without complex legal procedures. This ensures a smooth transmission
of assets to the rightful heir and prevents disputes over ownership

9.Enabling seamless interoperability : In India, there are two depositories, NSDL and CDSL,
which operate independently but follow similar processes. Recently, SEBI introduced
interoperability between depositories, allowing investors to switch between depositories or
transfer securities from one depository to another without any complications. This improves
flexibility and ensures that investors are not restricted to a single service provider.

10.Electronic credit for IPO shares : Depositories play a vital role in allotting IPO (Initial
Public Offering) shares directly into investors' Demat accounts. When a company issues new
shares to the public, the depository ensures that these shares are credited electronically,
eliminating the need for physical certificates. This process reduces paperwork, ensures faster
allocation, and improves transparency. Investors also receive SMS or email notifications once
the shares are credited, making the process more secure and efficient.

11.E-voting facilities for shareholders :Depositories provide an electronic voting (e-voting)

system that allows shareholders to participate in important corporate decisions remotely. In
traditional settings, investors had to be physically present at company meetings to vote on
crucial matters like mergers, acquisitions, and board appointments. With e-voting, shareholders
can now cast their votes online, ensuring that corporate governance is more inclusive and
transparent. This function has made it easier for retail investors to engage in decision-making
processes without logistical constraints.

12.Monitoring & reporting of transactions :One of the key roles of depositories is to track
and record all transactions involving securities. Investors receive regular account statements,
providing details of their holdings, purchases, and sales. Depositories also send real-time SMS
and email alerts whenever securities are credited, debited, or pledged. This feature helps
investors keep track of their portfolios, detect unauthorized transactions, and maintain better
financial control over their investments

13.Holding of mutual funds :In addition to stocks and bonds, depositories allow investors to
hold mutual funds, government securities, ETFs (Exchange-Traded Funds), and corporate
bonds in their Demat accounts. This eliminates the need for physical certificates and makes

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investment management more convenient. Investors can also buy, sell, and redeem mutual fund
units directly through their Demat accounts, simplifying the investment process and improving
accessibility.

14.consolidated account statements :Depositories provide investors with a single,

consolidated account statement that includes all their holdings across different financial
instruments. Instead of managing separate statements from multiple financial institutions,
investors can track their stocks, bonds, mutual funds, and other securities in one place. This
feature makes financial planning and investment tracking easier while also helping investors
with tax reporting and portfolio management.

15.Foreign Investment Management :Depositories also play a significant role in Foreign

Portfolio Investments (FPIs) by facilitating smooth transactions for foreign investors in Indian
securities. They assist in verifying investor credentials, tracking capital inflows and outflows,
and ensuring compliance with SEBI regulations. This function is crucial in attracting foreign
investments and ensuring that global investors can operate in Indian markets without regulatory
difficulties. By providing seamless transaction processes, depositories help strengthen India’s
position as an attractive investment destination.

16.Freeze & lock-in facility :To enhance security, depositories provide a freeze and lock-in
facility that allows investors to temporarily restrict access to their securities. Investors can
freeze their entire Demat account or specific securities, preventing unauthorized transactions.
This feature is useful in cases of fraud prevention, legal disputes, or pledged securities, where
assets must remain locked until certain conditions are met. By offering this function,
depositories give investors more control over their holdings and improve overall financial
security.Depositories go beyond just holding securities; they offer a wide range of services that
enhance investor convenience, market transparency, and operational efficienc.

The introduction of depositories has also led to greater market efficiency and liquidity. By
facilitating paperless trading, electronic settlements, and direct credit of corporate actions (such
as dividends, bonuses, and rights issues), they have significantly reducedj transaction costs and
settlement risks. Moreover, depositories work closely with stock exchanges, clearing
corporations, and regulatory bodies like SEBI to ensure a well-regulated and investor-friendly
market. In the future, depositories are expected to evolve further with advancements in
blockchain technology, artificial intelligence, and automation, making transactions even more

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secure and efficient. As more retail and institutional investors participate in the market, the role
of depositories will continue to expand, ensuring trust, transparency, and smooth functioning
of India’s financial ecosystem.

1.8 Online trading :

Online trading is an internet based investment activity. Internet exchanging began inIndia on
1ST April 2000 with 79 part looking for authorisation for web based-exchanging. Internet
exchanging should be possible by the interaction of an individual-and dealers purchasing and
selling protections over an electronic organisation ,with a business firm .Today there are many
online trading companies working as a portals for the biggest stock houses like the National
stock exchange and Bombay stock exchange. The online trading companies allow the investors
to invest in a number of financial products and services like derivatives, mutual funds,
Equities.The SEBI advisory groups on web based protections exchanging administrations has
permitted the net to be utilised as an Order Routing System(ORS) through enrolled stock
specialists of their customer for execution of exchange.Under the ORS, the client can enter the
requirement (security, quantity, price,buy/sell) in broker’s site. The client receives
conformation on execution of the order,the customer’s portfolio and ledger accounts get
updated to reflect the transaction.

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To start online trading, an investor needs three essential accounts: a Demat account, a trading
account, and a bank account. A Demat account holds securities in electronic form, replacing
traditional physical certificates. It is managed by depositories like NSDL (National Securities
Depository Limited) and CDSL (Central Depository Services Limited). A trading account is
used to place buy and sell orders through a stockbroker's platform, and a bank account is linked
to facilitate money transfers for transactions. These three accounts work together to ensure
smooth and secure online trading.

Online trading platforms provide investors with access to stock exchanges such as
the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). When an investor
places an order, the platform forwards it to the exchange, where it is matched with a
suitable buyer or seller. Once the transaction is completed, the securities are
transferred to the investor’s Demat account, and the payment is settled through the
bank account. This entire process is fast, efficient, and transparent, making online
trading a preferred choice for modern investors.

One of the biggest advantages of online trading is real-time market access. Investors
can monitor live price movements, track their portfolio, and make instant decisions
based on market trends. Many platforms also provide technical analysis tools, historical
data, and research reports to help traders make informed investment choices.
Additionally, online trading reduces the need for middlemen, which lowers
transaction costs. Investors can execute trades independently, avoiding extra
brokerage charges that traditional brokers might impose.

Online trading is also known for its user-friendly experience. Most trading platforms
and mobile apps are designed to be simple and easy to navigate, even for beginners.
Features like one-click order placement, customizable watchlists, and automated
trading make it easier for users to manage their investments. Some platforms also
offer educational resources, tutorials, and virtual trading to help new investors learn how
to trade before using real money.

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However, despite its many benefits, online trading also has risks. One major risk is market
volatility—stock prices can change rapidly, leading to potential losses. Investors need to
research thoroughly and have a proper strategy before investing. Another risk is cybersecurity
threats, such as hacking or phishing attacks, which can compromise trading accounts. To
protect themselves, traders should use strong passwords, two-factor authentication (2FA), and
secure internet connections. Technical issues such as platform outages or slow internet speed
can also affect trading, sometimes leading to missed opportunities or unexpected losses.

Emotional trading is another common challenge faced by investors. Since online

trading provides quick access to the market, some traders may make impulsive
decisions based on short-term price movements rather than long-term strategies. This can
lead to unnecessary risks and financial losses. To avoid this, traders should set clear
financial goals, use stop-loss orders, and follow a disciplined investment approach.

There are many online trading platforms available in India, each offering different features and
benefits. Some of the most popular platforms include Zerodha (Kite), Upstox, Angel One,
Groww, ICICI Direct, and HDFC Securities. These platforms provide tools for trading,
investment tracking, and market analysis, making it easier for users to participate in the stock
market. Many of these brokers also offer discount brokerage services, which means lower
trading fees compared to traditional brokerage firms.

Online trading has revolutionized the financial markets, making investing more accessible to a
larger audience. Earlier, trading was limited to professional investors and institutions, but now
anyone with a smartphone and internet connection can invest in stocks and other financial
instruments. This has contributed to the growth of retail investors in India, increasing market
participation and liquidity.

Online trading has transformed the way people invest in financial markets. It allows individuals
to buy and sell various financial instruments like stocks, bonds, mutual funds, commodities,
and currencies using internet-based platforms. Unlike traditional trading, where investors had
to call brokers to place orders, online trading provides direct access to stock markets through
computers and mobile apps. This shift has made trading faster, more affordable, and more
accessible to a wider audience, including small investors.

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With advancements in technology, artificial intelligence (AI), and blockchain, online trading
is expected to become even more efficient and secure. Features like real-time risk assessment,
AI-driven stock recommendations, and robo-advisors will further simplify investment
decisions for retail investors. Moreover, with 5G internet and cloud computing, trading
platforms will become faster and more accessible.The Indian government and Securities and
Exchange Board of India (SEBI) are also taking steps to protect investors by introducing stricter
regulations, increasing transparency, and enhancing cybersecurity measures.

In conclusion, online trading is a powerful tool for investors, offering flexibility, convenience,
and cost savings. However, it requires knowledge, discipline, and risk management to be
successful. By using the right strategies, secure trading practices, and reliable platforms,
investors can make the most of online trading and grow their wealth over time. Online trading
is also known for its user-friendly experience. Most trading platforms and mobile apps are
designed to be simple and easy to navigate, even for beginners. Features like one-click order
placement, customizable watchlists, and automated trading

Benefits of online trading ?

1.convenience & accessibility : One of the biggest advantages of online trading is its
convenience. Investors can buy and sell securities from anywhere in the world using an
internet-connected device. There is no need to visit a broker’s office or call them for placing
an order. With just a few clicks, users can execute trades, monitor market trends, and manage
their portfolios at any time of the day. This accessibility has opened up opportunities for a
wider range of investors, including those who previously found traditional trading too
complicated or time-consuming.

2.Lower transaction cost : Online trading platforms generally have lower fees and
commissions compared to traditional brokers. In the past, investors had to pay high brokerage
fees for placing trades through financial intermediaries. However, with online trading, many
brokerage firms offer discounted fees or even zero-commission trading on stocks and ETFs.
This cost-effectiveness makes investing more affordable, especially for retail investors who
trade in small amounts. Lower transaction costs mean that more of an investor’s money is used
for actual investments rather than being spent on fees.

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3.Real -time information : Online trading platforms provide real-time data about stock
prices, market trends, and financial news. Investors can access live charts, historical data, and
technical indicators to make informed decisions. This immediate access to market updates
helps traders react quickly to changes and take advantage of price movements. Unlike
traditional trading, where investors had to rely on brokers for updates, online trading ensures
that they have all the information they need at their fingertips.

4.Greater control over investment : Online trading platforms give investors full control
over their investments. Instead of depending on brokers to place orders, investors can directly
buy, sell, or modify trades based on their own research and strategies. They can also set stop-
loss and limit orders, which help them control risks by automatically selling stocks when they
reach a certain price. This level of control allows investors to make decisions quickly and
independently, without unnecessary delays caused by third-party involvement.

5.Fast transaction : Online trading ensures that transactions are executed instantly. Orders
placed through online platforms are processed in real-time, ensuring that investors can take
advantage of market opportunities without waiting. Unlike traditional methods that involved
paperwork and manual processing, online trading eliminates unnecessary delays, making the
entire process faster and more efficient. This is especially important for traders who engage in
intraday trading, where quick execution of trades can make a significant difference in profits
and losses.

6.Variety of investment option : Online trading platforms provide access to a wide range
of investment opportunities beyond just stocks. Investors can trade in bonds, mutual funds,
commodities, currencies, ETFs (Exchange-Traded Funds), and even cryptocurrencies. This
variety allows traders to diversify their portfolios, reducing risks and increasing potential
returns. Traditional brokers may offer only limited options, but online platforms connect
investors to multiple markets, making it easier to explore different asset classes.

7.Advance trading tool : Most online trading platforms come with powerful analytical
tools that help investors make better trading decisions. These tools include technical indicators,
stock screeners, financial news updates, and expert analysis. Investors can also use AI-based
trading algorithms to predict market trends and automate their trades. Such advanced features

36
help traders identify profitable opportunities and minimize risks, something that was previously
available only to professional traders.

8.Transparent and secure transaction : Online trading platforms provide complete

transparency in transactions. Investors can see detailed reports on their trades, profits, and
losses, allowing them to track their performance. Most platforms also have strong security
measures, such as encryption, two-factor authentication (2FA), and fraud detection systems, to
protect users’ funds and personal information. Unlike traditional trading, where paperwork and
manual processes could lead to errors and fraud, online trading ensures that all transactions are
recorded electronically with higher accuracy and security. There is a safe and secure transaction
between the seller and the buyer, which is just because of security and exchange board of India,
who keeps their eye on the whole capital market. also, if there is any misconduct, take place in
the marketplace, it takes a strict action regarding the issues arises.

9.Self improvement opportunity : Online trading has made investing more educational
and accessible for beginners. Most platforms offer free educational resources, including video
tutorials, webinars, market research reports, and demo accounts. Investors can learn at their
own pace and practice trading strategies without using real money. This self-learning
opportunity allows new traders to build confidence and develop skills before investing large
amounts. In traditional trading, learning was limited to expert guidance, but online platforms
empower individuals to become independent and knowledgeable investors.

10.Easy portfolio management : Online trading platforms offer a simple and user-
friendly interface for managing investments. Investors can track their portfolios, analyze
performance, and make adjustments at any time. They can also reinvest dividends, set up
automatic investments, and withdraw funds with ease. Unlike traditional methods, where
investors had to rely on brokers for portfolio updates, online trading allows for real-time
monitoring and instant decision-making. This convenience helps investors make better
financial choices and adapt to changing market conditions.

11.Flexibility for different types of investors : Online trading platforms cater to all
types of investors, from beginners to experienced traders. Whether someone wants to invest
for the long term or trade stocks daily, online platforms provide customized features to meet

37
different needs. Investors can choose from different trading styles, such as long-term investing,
swing trading, or day trading, depending on their financial goals. Additionally, many platforms
offer mobile apps, allowing users to trade from their smartphones, providing unmatched
flexibility.

12.Global markets access : With online trading, investors are no longer limited to their
home country’s stock market. Many platforms provide access to international stock exchanges,
allowing traders to invest in global markets like the New York Stock Exchange (NYSE),
NASDAQ, and London Stock Exchange. This means investors can diversify their portfolios
internationally, taking advantage of global economic growth and emerging market
opportunities. Previously, trading in foreign stocks required complicated processes, but online
trading has made it much easier and more accessible.

1.9 Stock market intermediaries :

Stock market intermediaries are financial entities that play a vital role in ensuring the smooth
and efficient functioning of the securities market. They act as a bridge between investors and
stock exchanges, facilitating the buying, selling, clearing, and settlement of securities. These
intermediaries help maintain market stability, liquidity, and transparency, making the
investment process seamless for participants. Some of the key stock market intermediaries
include stockbrokers, depositories, depository participants (DPs), clearing corporations,
registrars and transfer agents (RTAs), and merchant bankers. Stockbrokers, registered with
SEBI (Securities and Exchange Board of India), execute buy and sell orders on behalf of
investors.

Depositories like NSDL (National Securities Depository Limited) and CDSL (Central
Depository Services Limited) hold securities in electronic form, while depository participants
(DPs) act as intermediaries, enabling investors to open and manage Demat accounts. Clearing
corporations ensure the secure settlement of trades by transferring funds and securities between
buyers and sellers. Registrars and transfer agents (RTAs) maintain investor records and assist
with corporate actions such as dividends and bonus shares. Merchant bankers help companies
raise capital through IPOs, mergers, and acquisitions. These intermediaries collectively

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contribute to the smooth operation of the stock market, ensuring investor protection,
compliance with regulations, and efficient financial transactions.

Stock market intermediaries are essential entities that facilitate the smooth functioning of the
financial markets by connecting investors with stock exchanges and ensuring efficient
transactions. These intermediaries help in executing trades, clearing and settling transactions,
managing securities, and providing advisory services. By maintaining transparency, liquidity,
and regulatory compliance, they ensure a secure and well-functioning stock market. One of the
most important intermediaries is the stockbroker, who acts as a link between investors and
stock exchanges. Stockbrokers are registered with SEBI (Securities and Exchange Board of
India) and execute buy and sell orders on behalf of clients. They can be full-service brokers,
offering research, advisory, and portfolio management services, or discount brokers, providing
low-cost trading platforms without additional services. Another crucial intermediary is the
depository, which holds securities in electronic form and eliminates the risks associated with
physical share certificates.

Following are some stock market intermediaries :

1.Stockbrokers : Stockbrokers act as agents for investors, executing buy and sell orders
on their behalf in exchange for a commission or fee. They provide access to stock
exchanges and offer services such as investment advice, market research, and portfolio
management. By leveraging their expertise and resources, stockbrokers help investors
navigate the complexities of the stock market, ensuring informed decision-making and
efficient trade execution.

2.Investment bank : Investment banks specialize in helping companies and

governments raise capital by underwriting and issuing securities. They facilitate
mergers and acquisitions, provide advisory services, and assist in the structuring of
complex financial transactions. By connecting issuers with investors, investment banks
play a pivotal role in capital formation and the overall functioning of financial markets.

3.Clearing house : Clearing houses act as intermediaries between buyers and

sellers in financial markets, ensuring the efficient and secure settlement of
transactions. They manage the process of transferring ownership of securities and

39
funds, reducing counterparty risk by guaranteeing the performance of both parties
involved in a trade. By centralizing and standardizing the clearing process, clearing
houses enhance market stability and integrity.

4.mutual fund : Mutual funds pool capital from multiple investors to invest in a
diversified portfolio of securities, managed by professional fund managers. They offer
investors access to a broad range of assets, risk diversification, and professional
management. Mutual funds serve as intermediaries by channeling individual
investments into diversified portfolios, catering to various investment objectives and
risk tolerances.

5.Insurance companies : Insurance companies collect premiums from policyholders

and provide financial protection against specified risks, such as accidents, illness, or
property damage. They invest the collected premiums in various financial instruments
to generate returns and ensure they can meet future claims. By pooling risk and
facilitating capital allocation, insurance companies act as financial intermediaries,
contributing to economic stability.

6.Pension fund : Pension funds collect and invest contributions from employees and
employers to provide retirement benefits to participants. They invest in a variety of
assets, including stocks, bonds, and real estate, to generate returns that will meet future
pension obligations. As significant institutional investors, pension funds contribute to
capital market stability and liquidity

7.Financial advisor : Financial advisors offer personalized advice to individuals and

institutions on various aspects of financial planning, including investment strategies,
retirement planning, and risk management. They assess clients' financial situations,
goals, and risk tolerance to develop tailored plans. By providing expert guidance,
financial advisors help clients make informed decisions and achieve their financial
objectives.

8.Credit rating age : Credit rating agencies assess the creditworthiness of issuers of
debt securities, such as corporations and governments. They provide ratings that inform

40
investors about the risk associated with specific debt instruments. By offering
independent evaluations, credit rating agencies facilitate informed investment decisions
and contribute to the efficient functioning of debt markets.

9.Depositories : Depositories hold securities in electronic form, facilitating the

safekeeping and transfer of ownership of financial assets. They eliminate the need for
physical certificates, reducing risks such as loss, theft, or forgery. By providing a
centralized system for recording and transferring securities, depositories enhance the
efficiency and security of financial markets.

10.Custodian Bank : Custodian banks provide safekeeping services for investors'

securities, managing the settlement of transactions, collecting income, and providing
reporting services. They ensure that assets are securely held and accurately recorded,
facilitating efficient portfolio management for institutional investors.

11.Stock exchanges : Stock exchanges like the New York Stock Exchange (NYSE) or
National Stock Exchange (NSE) provide a platform where buyers and sellers trade stocks.
Brokers act as middlemen between investors and the stock exchange, helping individuals buy
and sell stocks for a commission. Depositories, such as the Central Depository Services Limited
(CDSL) and National Securities Depository Limited (NSDL), hold shares in electronic form,
ensuring their safety. Depository participants (DPs) are agents of depositories that provide
demat account services to investors, enabling them to store and trade stocks digitally.

12.clearing corporations : Clearing corporations handle the settlement of trades, ensuring

that buyers receive their shares and sellers receive their money securely and on time. Registrars
and transfer agents (RTAs) help companies manage their shareholder records, process
dividends, and transfer ownership of shares when they are bought or sold. Together, these
intermediaries ensure that the stock market operates efficiently, securely, and transparently for
all investors.

41
 Chapter-2
Research methodology

42
2.1 Statement of the problem :

Despite the growing financial market and increasing investment opportunities, a significant
portion of individuals remain hesitant to invest in the stock market. Many perceive stock market
investments as highly risky, complex, or suitable only for experts. Traditional investment
options like fixed deposits, gold, and real estate continue to dominate due to a lack of awareness
and financial literacy. Additionally, misinformation and fear of market fluctuations discourage
potential investors. This study aims to analyze individuals' perceptions of the stock market and
investment opportunities, identify key factors influencing their investment decisions, and
suggest ways to enhance financial awareness and participation in the market. By understanding
these perceptions, policymakers, financial advisors, and investment platforms can develop
strategies to encourage more informed and confident participation in the stock market.

One of the key reasons for low participation in the stock market is the preference for traditional
investment options such as fixed deposits, real estate, and gold. These options are often
perceived as safer and more stable compared to the stock market, where prices fluctuate
frequently. Additionally, the fear of financial losses, lack of trust in market mechanisms, and
limited access to expert financial guidance discourage many potential investors from entering
the stock market. As a result, a significant portion of the population misses out on the
opportunity to build long-term wealth through stock market investments.

Financial literacy plays a crucial role in shaping investment decisions. Individuals with higher
levels of financial knowledge tend to be more confident in making stock market investments,
while those with limited understanding of market trends and investment strategies often
perceive it as too complex or risky. Demographic factors such as age, income, education, and
occupation also influence investment behavior, as younger individuals may be more open to
taking risks compared to older individuals who prefer safer investments. Understanding these
factors is essential for identifying the challenges and barriers that prevent wider participation
in the stock market.

The study will suggest measures to improve financial awareness and investor confidence,
ultimately encouraging greater participation in the stock market and enhancing investment
opportunities for individuals.

43
2.2 Objectives of the study :

• To analyze the level of awareness and knowledge individuals have about the
stock market and various investment opportunities
• To understand the key factors influencing investment decisions, such as risk
perception, past experiences, financial literacy, and trust in the market.
• To assess common misconceptions and fears that prevent individuals from
investing in stocks and other financial instruments.
• To compare investment preferences among different demographic groups, such
as age, income level, and educational background.
• To evaluate the role of financial education and advisory services in shaping
investors' confidence and decision-making.
• To suggest strategies for increasing stock market participation, including
awareness campaigns, simplified investment processes, and better financial
education.
• To evaluate the role of media and financial news in shaping individuals'
perceptions of the stock market.
• To identify the preferred investment instruments among individuals, such as
stocks, mutual funds, bonds, or real estate

44
2.3 scope the study :
This study focuses on understanding the perception of individuals towards the stock market
and investment opportunities by analyzing their level of awareness, investment behavior, and
the factors that influence their decision-making. It aims to identify whether individuals consider
the stock market a viable investment option or if they prefer traditional methods such as fixed
deposits, gold, or real estate. The research will explore key aspects such as financial literacy,
risk tolerance, trust in financial institutions, and the role of media and financial advisors in
shaping investment choices. Additionally, it will examine the extent to which individuals
understand different financial instruments like stocks, mutual funds, bonds, and other
investment avenues.

The study will cover a diverse group of individuals from different age groups, educational
backgrounds, income levels, and occupations to understand how demographics affect
investment decisions. It will also assess the impact of external factors, such as market trends,
economic conditions, and government policies, on stock market participation. The
geographical scope of the study may be limited to a specific city, region, or country, depending
on the research sample. Moreover, the study will evaluate the role of digital investment
platforms and mobile trading apps in encouraging stock market participation.

While the study aims to provide a comprehensive analysis, it may be subject to certain
limitations. Factors such as market volatility, changing economic conditions, and regulatory
updates may influence individuals' perceptions beyond the study period. Additionally, the
research will be based on a specific sample size, which may not fully represent the views of
the entire population. Despite these limitations, the findings will offer valuable insights into
how investment awareness and participation can be improved, helping financial institutions,
policymakers, and educators develop better strategies to encourage informed investing in the
stock market.

45
2.4 Significance of the study :

Understanding how individuals perceive the stock market and investment opportunities is
crucial for several reasons. This study aims to shed light on the factors influencing investment
decisions, the barriers to stock market participation, and the role of financial literacy in shaping
investment behaviors. By examining these aspects, the research seeks to provide insights that
can enhance financial education, promote informed investment choices, and contribute to the
overall health of the financial markets.

A significant portion of the population lacks comprehensive knowledge about the stock market
and investment options. This knowledge gap often leads to misconceptions and a reluctance to
invest. By identifying the level of awareness and understanding among individuals, the study
can inform the development of targeted financial education programs. These programs can
equip individuals with the necessary skills and knowledge to make informed investment
decisions, thereby fostering a more financially literate society.

Despite the potential benefits, many individuals hesitate to invest in the stock market due to
perceived risks, past negative experiences, or a lack of trust in financial institutions. This study
aims to uncover these barriers by exploring factors such as risk perception, financial literacy,
and trust issues. Understanding these obstacles is essential for policymakers and financial
institutions to design strategies that encourage greater participation in the stock market, thereby
enhancing market liquidity and stability.

A finance examines how psychological factors influence financial decision-making. This study
contributes to this field by analyzing how individual perceptions and biases affect investment
choices. By identifying common misconceptions and behavioral patterns, the research can offer
recommendations to mitigate biases such as loss aversion, overconfidence, and herd behavior,
leading to more rational investment decisions.

46
2.5 Research design :

The research design indicates a plan of action to be carried out in connection with a proposed
research work. It provides only a guideline for the research to enable him to keep that he is
moving in the right direction in order to enable his goals.In this research the research design
was be the descriptive research design.

2.6 Data collection methods :

Information has been collected from both Primary and Secondary Data.
o Secondary sources- Secondary data are those which have already been collected by
someone else and which already had been passed through the statistical process. The
secondary data was collected through web sites, books and magazines.

o Primary sources- Primary data are those which are fresh and are collected for the first
time, and thus happen to be original in character. The primary data was collected
through direct personal interviews (open ended and close ended questionnaires)

2.7 sampling design :

Sampling is one of the most fundamental concepts underlying any research work. Most
research studies attempt to generalize or draw inferences about a population by studying a part
of it, known as the sample. The sample data enable the researcher to correctly estimate the
population parameters. In this study, I have used non-probability sampling as well as snowball
sampling. Essentially, my sample consists of both retail investors and corporate investors.
Based on this sampling approach, I have conducted my project and derived my findings and
conclusions.

2.8 Sampling unit :

The target population must be defined that has to be sampled.
The sampling unit of research included students and professionals residing in Mumbai city

47
2.9 Limitation of the study :

(1) Sampling bias may occur as the participants primarily belong to a certain age group,
profession, or education level, which might not reflect the overall population's perception

(2) The survey or data collection is limited to a specific area or community, the results might
not accurately represent perceptions in different regions or countries where market dynamics
differ.

(3) Lack of financial literacy might lead to misunderstandings or inaccurate responses

regarding investment opportunities.

(4) Stock market perceptions change over time based on economic conditions, market trends,
and external events (e.g., inflation, recession, or geopolitical issues).If the study is conducted
during a specific market phase (e.g., a bull or bear market), the findings may not reflect
perceptions during normal market conditions.

(5) The use of surveys or questionnaires might restrict participants' ability to express their
perceptions fully.

(6) Furthermore, the study did not consider other factors that affect stock market investments
like culture, family back grounds and many more.

48
 Chapter-3
Literature review

49
Review of literature :

The research review starts with a broad explanation of the topic and gradually focuses on
specific studies that help identify gaps and limitations in the available data from secondary
sources. By analyzing these past studies, we can assess how reliable and credible the
information is. This process helps us build a strong foundation for the current study.Some
past studies, although not directly related to this research, have still provided useful
insights. A summary of these studies is presented below.

Ashok Kumar (2014), suggested that majority of investors preferred to invest in Fixed
deposit with banks followed by gold, units of UTI, fixed deposit of non- government
companies, mutual funds, equity shares and debenture for safety and liquidity. The above
literature shows the important contribution on investors perception towards’ various
investment avenues. It is also evident from the above literature that majority of the investors
prefer fist safety and security for the investment and secondly they interested to get
maximum benefits for their investments. In light of above literature, the present study
attempts to identify the problems on the perception of investors towards investment
avenues in Vellore city, Tamil Nadu.

Vinayakam and Charumathi (2014) in their study observed that equity cult had spread to
different parts of the country and millions of Indian investors invested their savings in the
booming stock markets. What was once considered as the exclusive game of the rich and
privileged class is now becoming a matter of day interest for millions of middle and low
income groups of investing public in India. In spite of such widespread interest of Indian
investors in shares, investment knowledge is very much lacking in them. This is evident
from the fact that most of them usually get attracted towards the stock exchanges like moths
to a candle in periods of boom and rising prices in a bid to become rich quickly. When the
boom bursts and a depression sets in, most of such new entrants prove a menace to
themselves and to the general public ultimately.

50
Avinsah N (2014) The study analyses the investment behaviour by examining various invest
avenues. Data analyses reveals that Most of the respondents have selected bank deposit as their
first option for investment followed by real estate. Below 30 years respondents invest more in
real estate whereas above 60 years preferred LIC policies. Full time salaried people are more
aware about different investment avenues.

Nidhi Walia and Ravi Kiran (2014) studied that to satisfy the needs of investors‟ mutual
funds are designing more lucrative and innovative tools considering the appetite for risk taking
of individual investors. A successful investor is one who strives to achieve not less than rate of
return consistent with risk assumed. They also argued as per observation by survey responses
of the individual investor‟s fact is clear that overall among other investment avenues capital
market instruments are at the priority of investors but level of preference varies with different
category/ level of income, and an association exists between income status of investors and
their preference for capital market instrument with return as objective.

Ravi Vyas (2015) This study finds the form of investments preferred by investors. Mutual fund
investment is a secured investment with good returns on investments. Data analyses shows that
maximum respondent invest in Gold followed by bank deposits and Insurance schemes. Mutual
fund investments are very limited. For Safety, Liquidity, Reliability, Tax benefits and high
returns Mutual fund has average score among investors.

Priyanka Jain (2015) The study analyses the various investment avenues available for the
investors. It state Equity shares has low return but high capital appreciation, risk liquidity,
Marketability, tax benefit, Debentures has high return but low risk liquidity and marketability.
Bank deposits have moderate returns but low capital appreciation and risk liquidity.

Nayak (2015) seeks to examine the nature of investor’s grievances and also to evaluate the role
of grievance redressal agencies. Using convenient random sampling technique he collects
primary data on the investor’s demographic profile, knowledge about various grievances,
awareness about the functions of various grievances redressal agencies, loading of complain

51
and their satisfaction level in Valsad district of Gujarat State. By using chi square analysis he
shows that there is significant difference between the various demographic variables and
investor’s knowledge of grievances, awareness of functions of redressal agencies, loading of
complain and their satisfaction level.

Varadharajan and Vikkraman (2014) focus on identifying the investors’ perceptions towards
investment decision in equity market. Using ANOVA on a sample size of 50 investors in
Coimbatore they study their attitude towards selection of stock, company, risk, equity portfolio,
financial affairs and their expected return. They find that there exists an independency between
the demographics, majority of the factors and the returns obtained.

Abhijeet Chandra (2015). In this literature, the author has analyzed the impact of competence
of individual investors on their trading behavior in the stock market.Individual investors take
trading decisions based on their self-perceived competence that is influenced by several factors.
The study examined the factors that determine the competence level of individual investors.
Age, education, and income were found to be the most influencing factors of the individual
investors' competence in the stock market activities and trading behavior. The results of the
study reveal that a person invests as per his/her own judgments once he/she perceives
himself/herself more knowledgeable about investing. It finds that investors having high, high
to moderate income and professional qualification are supposed to be more confident about
their competence when it comes to trading in stock markets. Thus, it can be said that
competence effect rules the trading-behavior of individual investors.

Kadariya (2014) analyzes the market reactions to tangible information and intangible
information in Nepalese stock market to examine the investors’opinions in Nepalese stock
market issues. After analysis of a sample of 185 stock investors he finds that the capital
structure and average pricing method is one factor that influence the investment decisions, the
next is political and media coverage, the third factor is belief on luck and the financial
education, and finally the forth component for stock market movement is trend analysis. Thus,
he concludes that both the tangible and intangible information are essential tosucceed in
Nepalese capital market.

52
Chaudhary (2014) examines the meaning and importance of behavioural finance and its
application in investment decisions. He has also discussed some trading approaches for
investors in stocks and bonds to assist them in manifesting and controlling their psychological
roadblocks.

Gaurav Chhabra, Ankesh Mundra (2014)The study state various invest options available
with the investors. In earlier time because of non availability of banking system investors use
to keep hard cash, gold and silver ornament , precious stones etc as savings. Now investment
are made through bank, insurance policies, mutual funds , pension funds, collective investment
schemes, investment clubs.

T. N. Murty, P. V. S. H Sastry (2014) Investors choice with the objective of return optimization
is investment in the stock market instruments or securities. Stock market securities are affected
by various internal and external factors. Study examines the perception of small investment
investors towards returns on investment.

A. N. Paunikar (2014) Equity Linked Saving Schemes are similar to equity diversification
schemes with tax saving benefit under section 80C. The study aims at understanding scheme-
wise benefits under Equity Linked Saving Schemes for tax saving. Data analysis shows that
Equity Linked Saving Schemes has better returns on investments

Kaushal Bhatt (2015) Utilization of resources in order to increase income or production output
in future is kwon as investment. Data analyses states that Graduates are more intended to save
money and they are aware about various investment avenues. Business man tend to invest more
as compared to salaried man. Respondent want more safety and securities to their money.

Ravi Vyas (2015) This study finds the form of investments preferred by investors. Mutual fund
investment is a secured investment with good returns on investments. Data analyses shows that
maximum respondent invest in Gold followed by bank deposits and Insurance schemes. Mutual

53
fund investments are very limited. For Safety, Liquidity, Reliability, Tax benefits and high
returns Mutual fund has average score among investors.

Elke U. Weber Richard A. Milliman (2014), had stated that commuters changed their
preferences for trains with risky arrival times when the alternative involved gains with changes
in the perception of the riskiness of the choice of alternatives. This had left the perceived risk
attitudes of majority of commuters unchanged. Similarly, they had investigated changes in risk
perception, information acquisition and stock selection as a function of outcome viz., returns.
Investors’ stock selection and their perception of the risk of the same stock were different in
series of decisions in which they lost money than in series in which they made money.

Santi Swarup (2014) had indicated that the investors gave importance to their own analysis as
compared to brokers’ advice. They also considered market price as a better indicator than
analyst’s recommendations. The study also identified factors that were affecting primary
market situation in India. Issue price, information availability, market price after listing and
liquidity had emerged as importance factors in the study. The study suggested that investors
need to be assured of some return and the level of risk associated with investment in the market
was very high. They have bad experience in terms of lower market price after listing and high
issue price. A number of measures in terms of regulatory price level and market oriented
reforms were suggested to improve the investor confidence in equity primary markets.
However, this study did not highlight the measures for improving investors’ confidence in the
secondary market.

Manoj Kumar Dashl (2014) Factors Influencing Investment Decision of Generations in India:
An Econometric Study This study aims to gain knowledge about key factors that influence
investment behavior and ways these factors impact investment risk tolerance and decision
making process among men and women and among different age groups. The individuals may
be equal in all aspects, may even be living next door, but their financial planning needs are very
different. It is by using different age groups along with Gender that synergism between
investors can be generated. In this context, demographics alone no longer suffice as the basis
of segmentation of individual investors. Hence keeping this in mind, the present study is an
attempt to find out Factors which affects individual investment decision and Differences in the

54
perception of Investors in the decision of investing on basis of Age and on the basis of Gender.
The study concludes that investors’ age and gender predominantly decides the risk taking
capacity of investors.

James E. Corter (2014) had concluded that risk tolerance and uncertainty tolerance can be
distinguished not only theoretically but empirically and that both types of attitudes affected
investing behaviour. While higher levels of risk tolerance led to riskier portfolios and thus to
higher exposure to losses, it seemed that investors’ emotional reactions to losses were not
mitigated by higher level of risk tolerance. It suggested that a high level of risk tolerance
insulated a client from neither the actual nor the emotional consequence of market losses.

Sohan Patidar (2014), found that as per the age-wise classification, the investors in the age
group of below 35 years were actively participating in the speculation trade and the age group
of above 55 hesitated to take risks. Professional people were not interested in the share market
and investors falling under the income group below Rs 20, 000 showed more interest in
investing their earnings in the share market.

Manjunatha T and Gopi K.(2014), found that every investor had his own investment
objectives, risk acceptance level, inflows and outflows of money and other constraints. Their
study showed that the decision of retail investors in primary market were influenced by issue
price, information availability, broker advice, recommendations of the analysts, secondary
market situation, disclosure by market participation and other factor. The study suggested that
wealth maximisation criteria was important to retail investors while investing in the primary
market, the recommendation of brokerage house analysts, issue price, IPOs grading, promoters’
reputations and other factors go largely were considered in the primary market.

Bandgar P.K75, (2014), in his study entitled, “A Study of Middleclass Investor’s Preferences
for Financial Instruments in Greater Bombay”, studied the existing pattern of financial
instruments in India and the performance of middle class investors, their behavior and
problems. Questionnaire was administered to collect data. Average, skewness, chi-square test
and Fisher Irving test were used to analyze the data. The study revealed that only 16% of the

55
investors were facing difficulties in buying and selling securities. Middle-class investors were
highly educated but they were lacking skill and knowledge to invest. Female investors preferred
to invest in risky securities as compared to male investors. The study also revealed that there
was a moderate and continuing shift from bank deposits to shares and debentures, and a massive
shift towards traditional financial instruments namely, life insurance policies and government
securities.

Kannadasan (2014) in his “ Risk appetite and Attitudes of Retail Investors with Special
reference to Capital Market” analyzed the behavioral pattern of the Retail Investors, based on
various dependent variables viz., Gender, age, marital status, 71 educational level, income
level, awareness, preference and risk bearing capacity. The following are the major findings of
the study : a. Only 25 per cent of the sample respondents were aware of all the investment
avenues available in the capital market. However, all of them are aware of at least one avenue.
b. 90 per cent of the retail investors are not aware of the measures taken by the Government to
protect the interest of the investors.c. 79 per cent of the retail investors are interested to invest
in Shares and Debentures as well. d. The risk bearing capacity of the retail investors was not
influenced by their age. The retail investors’ age is not a criterion to decide their investment
behavior and investment option. e.The investment strategy of the investors is influenced by
their income level. The retail investors’ income level is playing a predominant role to decide
their investment behavior and investment strategy as well. f. The major attributes of risk in
investment are dividend, redemption period and Value appreciation. Value appreciation is an
important factor among the three.

Security Exchange Board of India (SEBI) along with National Council of Applied Economic
Research (NCAER), conducted a comprehensive survey of the Indian investor households
entitled, “Survey of Indian Investors”, in order to study the impact of the growth of the
securities market on the households and to analyze the quality of its growth. 25,000 investors
were drawn from places all over India and the data was collected by administering
questionnaire and through personal interviews. The survey was carried out with the major
objective of drawing a profile of the households and investors and to describe the
demographics, economic, financial and equity ownership characteristics. The study also
focused to understand the investor’s investment preference for equity as well as other savings
instruments, their perception about market risk, their expectations, nature of their grievances,
and difficulties, to estimate the number of household which had refrained from investing in the

56
equity market and the reasons for their reluctance. The survey 72 revealed that age, education,
occupation and income were found to influence the attitude of an investor towards investment.
The urban investor households had higher proportion of investment in equity shares, debenture
and mutual funds as compared to the rural households. Income levels and investment of the
households in capital market were found to be associated. Majority of the equity investors had
long term motive of investment. Investors revealed that they had a number of broker related
problems than the issuer related problems.

Muraleedhran (2014) “Pattern of Household Income, Savings and Investment” analyzed the
pattern of investment preference among the different income groups in physical and financial
assets. The relevant findings of the study are asfollows: a.The composition of savings reveals
that savings in financial asset (63.47%) is higher than savings in physical assets. b. Among the
savings in financial assets savings in chit funds is the highest (44.58%). c. In physical assets,
consumer durables are the highest (28.33%). d. For around 23.62% of the households, the
saving motive is the educational and marriage purposes of their children. e. The average
propensity to save shows that the level of savings is related to the level of income.

Selvam M (2014), in their study entitled, “Equity Culture in Indian Capital Market’, examined
the need for promoting equity culture, which deserves special attention for the development of
economic growth. The study discussed in detail the current trend of equity culture, its
implications and its revival and remedial measures. The study suggested intervention by
government, SEBI and RBI and evaluation of suitable credit policy for projects in order to
assure safety and assured returns to the investors, in order to restore investor confidence.

Jasim Y Al-Ajmi (2014) in “Risk tolerance of Individual Investors in an Emerging Market”

explores the relationship between risk tolerance and the demographic characteristics of the
investors. The study was conducted to investigate the effect of gender, education, age and
wealth of the investors on their risk tolerance level. Major findings of the study are as follows

a. Men are less risk averse than women.

b. Less educated investors are less likely to take risk.

c. The effect of age on risk tolerance is complex.

57
d. Wealthy investors are more risk tolerant than the less-wealthy investors.

Hon (2012) investigates the behaviour of small investors in Hong Kong’s derivatives markets.
The study period covers the global economic crisis of 2011-2012, and he focuses on small
investors’ behaviour during and after the crisis. He attempts to identify and analyse the key
factors that capture small investor’s behaviour in derivatives markets in Hong Kong. He
collects data 524 respondents through a questionnaire survey. Exploratory factor analysis
rotated principal component loadings, scree test, KMO and Bartlett’s test, and a reliability test
show that the behaviour of small investors in derivatives markets in Hong Kong consistently
indicates the ascending order of importance of return performance, reference group, and
personal background

Verma.P. (2012) found that awareness of various equity oriented securities among Indian
investors is increasing due to various investor education programmes conducted by Securities
and Exchange Board of India (SEBI) and Association of Mutual Funds in India (AMFI). He
stated that, due to the increased awareness about equity oriented securities, the number of new
investors is growing at a healthy rate in India. He further stated that, increased awareness is
also motivating the equity investors to acquire knowledge on various investment strategies and
risk minimisation techniques.

Heena Kothari (2012) The study analyses the investment behaviour towards investment
avenues in Indore city. The study is consisting of private and public banking employees as they
have regular income, retirement benefits, safety and security of income. Analyses of data states
that Younger people invest more than Middle age people

Szyska Adam (2008) analysed how investors’ psychology changes the vision of financial
markets and discussed the consequences of the new view of finance by capital market
practitioners-investors, corporate policy makers and concluded with some thoughts on the
future development of the capital market theory.

58
Hvidkjaer S (2008) analyses the relationship between retail investor trading behavior and the
cross section of future stock returns. The result suggests that stocks favored by retail investors
subsequently experience prolonged underperformance relative to stock out of favor with them.
This results link the systematic component of retail investor behavior to future returns, i.e.,
informed investors might begin selling stocks that they believe to be overvalued. The
overvaluation that these investors perceived could be driven by changes in firms fundamental
values.

Sunil Damodar (1993) evaluated the „Derivatives‟ especially the „futures‟ as a tool for short-
term Risk control. He opined that derivatives have become an indispensable tool for finance
managers whose prime objective is to manage or reduce the risk inherent in their portfolios. He
disclosed that the over-riding feature of „financial futures‟ in risk management is that these
instruments tend to be most valuable when risk control is needed for a short- term, i.e., for a
year or less. They tend to be cheapest and easily available for protecting against or
benefitingfrom short term price. Their low execution costs also make them very suitable for
frequent and short term trading to manage risk, more effectively. R. Venkataramani (l994)
disclosed the uses and dangers of derivatives. The derivative products can lead us to a
dangerous position if its full implications are not clearly understood. Being off Balance sheet
in nature, more and more derivative products are traded than the cash market Products and they
suffer heavily due to their sensitive nature. He brought to the notice of the Investors the „Over
the counter product‟ (OTC) which are traded across the counters of a bank. OTC products (e.g.
Options and futures) are tailor made for the particular need of a customer and Serve as a perfect
hedge. H e emphasized the use of futures as an instrument of hedge, for it is of low cost.

59
 Chapter-4
Data analysis &
Interpretation

60
 Table1 : As per (per month) income of respondents

Per month income No. of respondents

Less than 20,000 16
20,000 – 40,000 29
Greater than 40,000 55

Respondents as per monthly income :

16%

55%
29%

Less than 20,000 20,000 – 40,000 Greater than 40,000

Analysis and interpretation :

According to Table 5, majority of the respondents had income above 40000 that
constituted 55 per cent of the responses whereas 29 per cent responses were between
the range of 20000-40000 and the rest which can be assumed as students and home
makers who accounted to 18 per cent of the responses.

61
 Table 2: as per qualification of respondents

Qualifications No. of respondents

Metric 7

Under – Graduates 11

Diploma 13

Graduates 44

Post – Graduates 25

Respondents as per qualification :

7%

25% 11%

13%

44%

Matric Under – Graduates Diploma Graduates Post – Graduates

Analysis and interpretation :

According to Table 3 with respect to occupation of respondents, major individual are
graduate which equal to 44 per cent, post graduate is the 2nd highest response with 25
per cent while diploma and under graduate are 13 and 11 per cent respectively. The
least of all is matric that total to 7 per cent.

62
 Table 3 : As per the gender of the respondents

Gender No. Of respondents

Male 65
Female 35

Respondents as per Gender :

35%

65%

Male Female

Analysis and interpretation :

According to Table 2 with respect to gender distribution of respondents, it is observed
that, majority of the respondents constituting 65 per cent of the sample were males while
the 35 per cent of the respondents were females.

63
 Table 4: As per Occupation of respondents
Occupation No. of respondents

Service 42
Profession 23

Business 17
Students 11
Others 7

Respondents as per Occupations :

7%

11%

42%

17%

23%

Service Profession Business Students Others

Analysis and interpretation :

According to Table 4, the respondents are majorly into service constituting 42 percent, whereas
individuals with profession and business as occupation equated to 23 and 17 per cent
respectively. 11 per cent of the respondents were students and the remaining 7 per cent
consisted of 1 spoken english trainer, 1 Tutor, 2 home makers, 1 e-commerce sales executive,
1 unemployed and 1 retired.

64
 Table 5 : As per age of respondents
Age No. of respondents

Less tan 20 hears 5

20-40 years 31

More than 40 years 64

Respondents as per age :

5%

31%

64%

Less tan 20 hears 20-40 years More than 40 years

Analysis and interpretation :

As observed in Table 1, majority of the respondents constituting 64 per cent of the total sample
belong to the age group above 40 years, while 31 per cent of the sample are aged between 20-
40 years and the remaining 5 per cent individual are below 20 years. This indicates that majority
of the sample belong to the working class and thus would involve in invesment.

65
 Table 6: As per the rate at which investments grow

Growth rate No. of respondents

Steadily 15

Average 79

Fast 6

What are the rates at which the investments grow ?

6%
15%

79%

Steadily Average Fast

Analysis and interpretation :

According to Table 9, 79 per cent of respondents have return at an average rate while
15 per cent and 6 per cent individual conclude that their investment grow at steady
and fast rate

66
 Table 7 : As per frequency of the investment

Frequency of investment No. of respondents

Daily 2

Weekly 2

Monthly 69

Yearly 27

What is the frequency of investment ?

2%2%

27%

69%

Daily Weekly Monthly Yearly

Analysis and interpretation :

From the above Table 10 & chart it was found that 69 respondents invest monthly, 29
invest yearly and there were 2 respondents who invest daily and 2 respondents who
invest yearly. Thus, it can be stated that majority of the investors invest monthly.

67
Table 8 : As per percentage of income respondents invest monthly
Monthly income invested No. of respondents
Upto 10% 31

10-15% 34
15-20% 22
Above 20% 10

No investments 3

What percentage of income invested monthly ?

3%
10%

31%

22%

34%

Upto 10% 10-15% 15-20% Above 20% No investments

Analysis and interpretation :

From the above Table 11 & chart, it was found that 34 respondents invest 10-15% of
their monthly income, 31 respondents invest 10% of their annual income, 22
respondents invest up to 15-20% of their income, 10 respondents invest up above 20%
of their income in different investment avenues while 3 respondents do not make any
monthly investment. Thus, it can be concluded that majority of investors invest 10% to
20% of their monthly income.

68
Table 9 : As per the respondents action in case stock market drop
Respondents actions No. of respondents
Cut losses & transfer funds into secure 12
investment
Wait to see if investments improve 62
Invest more 20

Withdraw funds & stop investing 6

What is the action if there is a drop in capital market ?

Withdraw funds & stop investing

Invest more

Wait to see if investments improve

Cut losses & transfer funds into secure investment

0 10 20 30 40 50 60 70

No. of respondents

Analysis and interpretation :

From the survey it was found that maximum respondents would wait to see if their investment
improves and start generating funds, 20% respondents would invest more funds, 12%
respondents would transfer funds into secure investment and 12% respondents would stop
investing. It can be stated that majority of investors would like to wait to see whether
investment improves or they can invest more fund

69
Table 10: As per various investment options where respondents invest
Investment options No. Of respondents

Shares 61

Mutual Fund 79

Debentures 12

Bonds 14

Derivatives 7

Others 25

Which investment options you prefer to invest ?

Others

Derivatives

Bonds

Debentures

Mutual Fund

Shares

0 10 20 30 40 50 60 70 80

No. Of respondents

Analysis and interpretation :

This question had a checkbox answer where respondents were allowed to select as many
investment alternatives they invest in. According to Table 8, 79 per cent invest in mutual funds
while 61 per cent invest in shares while 12 per cent invest in debentures, 14 per cent invest in
bonds and only 7 per cent invest in derivatives. Also 25 per cent invest in Fixed deposits, Public
provident funds, National pension scheme, Gold. Thus, it can be stated that maximum people
invest in Mutual Funds whereas shares are having 2nd importance.

70
Table 11 : As per the source where investors know about stock market
Source No. of respondents

Self 76

Friends & relatives 42

Service providers & consultant 30

Newspaper & advertisement 27

Agents 33

Workshop & seminars 9

What is the source where investors get to know about stock market?

Workshop & seminars

Agents

Newspaper & advertisement

Service providers & consultant

Friends & relatives

Self

0 10 20 30 40 50 60 70 80

No. of respondents

Analysis and interpretation :

This question had a checkbox answer where respondents were allowed to select as many factors that
infuence their decision of investment. From the above Table 12 & chart, it was found that multiple
aspects for investing influenced respondents.75% respondents take investment decision on the basis of
their personal evaluation where as 41% respondents invest because of influence of friends & relatives,
the agent influences 33% respondents, the consultants influences 30% respondents and the
advertisement influences 27% respondents.It can be stated that majority of the persons are influenced
by their own while opting for investments.

71
 Table 12 : As per factors that respondents consider while investing

Investment factors No. of respondents

ROI 77

Tax benefits 57

Capital appreciation 52

Maturity period 31

Risk 42

Safety 45

Liquidity 39

What are the factors influencing investment decisions?

Liquidity
Safety
Risk
Maturity period
Capital appreciation
Tax benefits
ROI

0 10 20 30 40 50 60 70 80

No. of respondents

Analysis and interpretation :

This question had a checkbox answer where respondents were allowed to select as many factors while
investing. From the survey it was found that the maximum respondents considered return on investment
was most important factor, 57% and 52% respondents considered tax benefits and capital appreciation
as an important factor respectively and 42% respondents considered risk as an important factor while
45% and 39% considered safety of principal and liquidity as an important factor respectively. It can be
stated that majority of investors were consider return as an important factor while investing

72
 Table 13 : As per respondents found capital markets risky or not

Decision No. of respondents

Yes 88

No 12

Is capital markets seems risky or not ?

90
80
70
60
50
40
30
20
10
0
Yes No

No. of respondents

Analysis and interpretation :

From the survey majority of the respondents i.e 88 per cent feel that capital market is
risky whereas 12 per cent agree that capital market is not risky.

73
 Table 14 : As per respondents invest in stock market or not

Decision No. of respondents

Yes 66

No 34

Do you invest in stock market or not ?

70
60
50
40
30
20
10
0
Yes No

No. of respondents

Analysis and interpretation :

According to Table 6, 66 per cent of the individuals invest in stock market while the
other 34 per cent do not invest in stock market.

74
 Table 15 : As per the investment options respondents aware of

Investment options No. of respondents

Shares 82

Mutual fund 88

Debentures 42

Bonds 52

Derivatives 25

Others 19

What investment options you are aware of ?

90
80
70
60
50
40
30
20
10
0
Shares Mutual Debentures Bonds Derivatives Others
fund

No. of respondents

Analysis and interpretation :

This question had a checkbox answer where respondents were allowed to select as many
investment alternatives they were aware of. According to the Table 7, 88 per cent and 82 per
cent of the respondents are aware of mutual funds and shares as an investment alternative
while 42 and 52 percent individuals are aware of debentures and bonds respectively while
derivatives constituted to 25 per cent of the responses. The option others which included
investments in Fixed deposits, Public provident funds, National pension scheme, Gold
constituted to 19 per cent.

75
 Chapter- 5
Conclusion & Suggestions

76
 Conclusion :

Following findings were generated from the study:-

• Most investors are above the age of 40

• Most 58% of respondents are males.
• 44% of respondents are graduates while 25% are post graduates.
• Majority 42% are into service whereas 23% are professionals.
• Most of the respondents have income above 40000 monthly.
• Maximum investors are aware of all the investment options.
• Investors do not invest in a single avenue. They prefer different avenues and
maximum investors prefer to invest in shares, mutual funds & bonds.
• Maximum investors feel their investment grow at an average rate.
• The investment decision of investors is influenced majorly by their own decision
and through friends & relatives.
• Different factors considered by investors while investing are return on
investment, tax benefits, capital appreciation and the most prominent factor is
the return on any investment avenue.
• The most important factor is Return which influenced the decision regarding
investment.
• Majority of investors invest 10-20% of their monthly income.
• Maximum investors invest on monthly basis.
• The investors find that capital market is risky for investment.

77
 Suggestions :

Following were the recommendations of the study:

• The satisfaction levels of various investors are different due to different

investment alternatives they opt for. If they will be aware of each type of
alternatives and the worth of the alternatives then investing as per that there
satisfaction level will also be high.
• Investors should have the complete knowledge of stock market.
• The investors consider various factors while making investment like risk, return,
liquidity etc. There should be rational thinking so that the investor is able to know
that at what point of time they need capital appreciation instead reducing the risk
and when they need return instead of liquidity.
• The various investment tools which were mostly preferred by the investors were
shares, mutual funds etc. So there should be various other means to create
awareness regarding the potential of other instruments and the tools which can
be more beneficial to the investors
• The preferred time span of investment by the investors depends upon the need
of the investor that whether they wants to have early and high returns or wants
to have stable returns, most probably the long time span is suitable because the
returns are high and safety is also there.

• Investors should conduct thorough research about companies, market trends, and
economic conditions before making investment decisions. Relying on credible sources
and understanding financial statements can help reduce risks.
• It is advisable to diversify investments across differentq sectors and asset classes to
minimize potential losses. A well-balanced portfolio can provide stability even during
market fluctuations.

78
 References :
Sharma, S., Sharma, T., & Mandal, P. (2018). Perception and switch intention of rural
customers towards organised retail. International Journal of Business Forecasting and
Marketing Intelligence, 4(1), 13-29.

Rao, P. S. (2018). Factors Affecting Investor's Perception of Mutual Fund Investment WRT
Andhra Pradesh. Indian Journal of Public Health Research & Development, 9(10).

Rehan, R., Naz, S., Umer, I., & Ahmed, O. (2018). Awareness and Perception of Investors
Towards Mutual Funds Industry. RADS Journal of Social Sciencess & Business Management,
5(1), 01-14.

Saravanan, S., & Satish, R. (2018). Impact of Risk and Return Considerations in Perception
of Retail Investors about an IPO. Indian Journal of Public Health Research & Development,
9(8).

A, J. R., & Sunitha, G. (2018). Investor‟s psychology in investment decision making: A

behavioral finance approach. International Journal of Pure and Applied Mathematics, 119(7),
1253-1261.

Kaur, I., & Kaushik, K. P. (2016). Determinants of investment behaviour of investors towards
mutual funds. Journal of Indian Business Research, 8(1), 19- 42.

Lim, K. L., Soutar, G. N., & Lee, J. A. (2016). Factors affecting investment intentions: A
consumer behaviour perspective. In Financial Literacy and the Limits of Financial Decision-
Making (pp. 201-223). Palgrave Macmillan, Cham.

Manimozhy, N., & Borah, N. (2018). Perception of Individual Investors towards Stock
Market Investments with Special Reference to Guwahati City. Journal of Contemporary
Research in Management, 13(3).

Muthumeenakshi, M. (2017). Perception of Investors towards the Investment Pattern on

Different Investment Avenues-A Review. The Journal of Internet Banking and Commerce,1-
15.

Rajagopalan, P., & Gurusamy, S. (2015). Behavioural biases and perception of retail
investors in stock market-an empirical approach. Sumedha Journal of Management, 4(1),113.

79
APPENDIX :
QUESTIONNAIRE

Dear Respondent’s,

Myself Gautam Thakur, a student of Tybms from Ghanshyamdas saraf college of arts
and commerce would like you to request to fill up questionnaire for the study,

“A study on individuals perception towards towards the stock market and

investment opportunities”

(All information will be kept confidential and will be used the for study purpose only)

PERSONAL PROFILE

1. Age

Less than 20 years

20-40 years

Above 40 years

2. Gender

Male

Female

3. Qualification

Matric

Graduate

Post Graduate

80
 Diploma

4. Occupation

Service

Profession

Business

Student

Other:

5. Income (Per month)

Less than 20000

20000-40000

Greater than 4000

INVESTMENT QUESTIONS

6. Do you invest in stock market?

Yes

No

7. What investment alternatives are you aware of?*

Shares

Mutual Funds

Debentures

81
 Bonds

Derivatives

Others:

8. What type of investment options are you investing in?*

Shares

Mutual Funds

Debentures

Bonds

Derivatives

Others:

9. What are the rates at which the investments grow?

Steadily

At an average rate

At a fast rate

10. Frequency of investment?

Daily
Weekly
Monthly
Yearly

11. What is the percentage of income you invest monthly?

Upto 10%

82
 10-15%
15-20%
Above 20%
No investment

12. What influences your investment decision?*

Self
Friends & Relatives
Service providers & consultants
Agents
Workshop & seminars
Others:

13. What are the factors considered while investing?*

Return on investment
Tax benefits
Capital appreciation
Maturity period
Risk
Safety of principal
Liquidity
Others:

14. What is your action if there is a drop in stock market?

Cut your losses & transfer into safe investment

Wait to see if investment improves

Invest more funds

83
 Withdraw funds & stop investing

15. According to you is capital market risky?

Yes

No

*Questions with check-box answer.

84