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INTRODUCTION
REVIEW OF LITERATURE
RESEARCH METHODOLOGY
REFERENCES
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INTRODUCTION
The main idea behind the study conducted was to find out the investors
preference of commodity market with reference to Share khan Financial
Services Pvt. Ltd,
This study should deal with the investor’s preference from commodity
market. To identify the investor’s preference means, it should find out the
characteristics of investors who invest under the guidance of different share
brokers. It also should concentrate on whether they are satisfied with the
services and earnings from the commodity market to provided by the
investment an also by the brokers service.
MEANING OF INVESTOR:
Less frequently, the term is applied to parties who purchase real estate,
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currency, commodity derivatives, personal property, or other assets. The
term implies that a party purchases and holds assets in hopes of achieving
capital gain or cash flow, not as a profession or for short-term income.
Types of investors:
Trading of S&P 500 and other financial futures has broken down
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some of the barriers that once separated stock, bond, and commodity markets
and made it easier for investors to hedge their stock investments. Critics
charge that the futures trading at the commodity markets in Chicago have
made stock prices more volatile.
Hedgers:
Hedgers are those who protect themselves from the risk associated
with the price of an asset by using derivatives. A person keeps a close watch
upon the prices discovered in trading and when the comfortable price is
reflected according to his wants, he sells futures contracts. In this way he gets
an assured fixed price of his produce.
Speculators:
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Speculators are some what like a middle man. They are never
interested in actual owing the commodity. They will just buy from one end
and sell it to the other in anticipation of future price movements. They
actually bet on the future movement in the price of an asset. They are the
second major group of futures players. These participants include
independent floor traders and investors. They handle trades for their personal
clients or brokerage firms. Buying a futures contract in anticipation of price
increases is known as ‘going long’. Selling a futures contract in anticipation of
a price decrease is known as ‘going short’. Speculative participation in futures
trading has increased with the availability of alternative methods of
participation.
Arbitrators:
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OBJECTIVES OF THE STUDY
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REVIEW OF LITERATURE
the „commodity question‟ in the light both of its classical definition and of the
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According to Katherine Dusak, Futures Trading and Investor Returns: An
Investigation of Commodity Market Risk Premiums. “The long-standing
controversy over whether speculators in a futures market earn a risk
premium is analyzed within the context of the capital asset pricing model
recently developed by harpe, Lintner, and others. Under that approach the risk
premium required on a futures contract should depend not on the variability
of prices but on the extent to which the variations in prices are systematically
related to variations in the return on total wealth. The systematic risk was
estimated for a sample of wheat, corn, and soybean futures contracts over the
period 1952 to 1967 and found to be close to zero in all three cases. Average
realized holding period returns on the contracts over the same period were
close to zero”.
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trading in commodities cannot be ignored by Indian investors.
According to Chua, Jess H., Gordon Sick, and Richard S. Woodward (1990).
"Diversifying with Gold Stocks" “The authors extend Jaffe’s (1989) study by
examining the relative investment benefits of investing in gold equities versus
gold bullion during the period September 1971 through December 1988. By
splitting their sample period into two sub periods, the authors show that the
diversification benefits of gold bullion are much more consistent than the
diversification benefits of gold equities. In particular, they find that the beta of
gold equities more than doubled between the 1970s and 1980s, whereas the beta
of gold bullion remained largely unchanged at approximately zero in both periods.
Thus, the authors question the diversification benefits of gold equities,
particularly over short investment horizons.”
3.8 According to de Roon, Frans A., Theo E. Nijman, and Chris Veld (2000).
"Hedging Pressure Effects in Futures Markets " Journal of Finance, “We
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present a simple model implying that futures risk premium depend on both own-
market and cross-market hedging pressures. Empirical evidence from 20 futures
markets, divided into four groups (financial, agricultural, mineral, and currency)
indicate that, after controlling for systematic risk, both the futures own hedging
pressure and cross-hedging pressures from within the group significantly affect
futures returns. These effects remain significant after controlling for a measure of
price pressure. Finally, we show that hedging pressure also contains explanatory
power for returns on the underlying asset, as predicted by the model.” (p. 1437).
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commodity fund investments is frequently relatively attractive. Each individual
fund, however, has relatively volatile returns, so the stand-alone performance of
managed commodity futures is poor relative to traditional investments. The
authors find that, in general, adding a portfolio of CPOs or CTAs to a traditional
investment portfolio enhances portfolio performance. In addition, the authors
compare the returns to CTAs and CPOs with the returns to the passive
Reuters/Jefferies CRB Index and the MLM. The MLM is a dynamic index based
on momentum in commodity prices, which is consistent with the strategy
followed by many managed futures funds. The authors find a significant positive
relationship between the returns to managed futures and the MLM but no
significant relationship between managed funds and the CRB. This finding is
consistent with the contention that the MLM provides a general indicator of the
performance of managed futures. The authors also find, however, that neither the
MLM nor the CRB supplants managed futures in their derived efficient
portfolios.”
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RESEARCH METHODOLOGY
Research approach
The selection of the research approach is the basic procedure for the
conduct of research. A research approach tells the investigator as to what data to
collect and how to analyze it. It also suggests possible conclusion to be drawn
from the data.
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"Decisions regarding what, when, how, how much by what means
concerning a research constitutes the research design.” --C.R. Kothari
DESCRIPTIVE RESEARCH:
SAMPLING UNIT
SAMPLE SIZE
A sample size of 120 investors was selected for the study in the Gobi
Region.
A. PRIMARY DATA
Data are collected for the first time for a specific purpose in mind
using the questionnaire method and interview method.
B. SECONDARY DATA
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4.4 SAMPLING TECHNIQUE
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REFERENCES
www.sharekhan.com
www.karvy.com
www.indiainfoline.com
www.moneycontrol.com
www.valuenotes.com
www.cdsl.com
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