Getting to Yes by Roger Fisher Essay examples -- Negotiation Getting Y

Getting to Yes by Roger Fisher Whether or not we atomic number 18 aw are of it, distributively of us is faced with an abundance of conflict each and e real day. From the division of chores within a household, to asking ones boss for a raise, weve all learned the basic skills of negotiation. A matter bestseller, Getting to Yes, introduces the order of scrupulous negotiation, a form of alternative brawl resolutions as opposed to the common method of positional bargaining. Within the book, cardinal basic elements of principled negotiation are stressed separate the tidy sum from the problem, focus on interests instead of positions, invest options for mutual gain, and insist on using objective criteria. Following this section of the book are suggestions for problems that whitethorn occur and finally a conclusion. In this journal entry I will be taking a closer look at each of the elements, and critically analyse the content ultimately, I aim to curtly bring forth the pros and con s of Getting to Yes.Principled negotiation allows disputants to obtain what they are entitled to, while enabling them to be fair, at the same clock time protecting against those who would take advantage of their fairness . Although the points made are reasonable and indeed a great approach to certain types of conflict, I put in that in around cases the method did not completely come together. more than whateverthing, I found the method altogether was simplistic and for an deification situation. eon going through the four elements, I shall illustrate these points. The first method of principled negotiation is to separate the people from the problem. Although it seems to be instead a simple process, I found a major question came to sound judgement What if the people are the problem?. Being a teenager, I sack out that sometimes the only reason for conflict is emotions and feelings. A person feels they rush been wronged, the other disagrees, and separating the people from th e problem becomes virtually impossible. Getting to Yes briefly proposes some solutions to emotion, such as recognizing both sides emotions, making emotions diaphanous and acknowledging them as legitimate, allowing the other side to let off steam, not reacting to steamy outbursts, and using symbolic gestures . Again, I found these guidelines to be oversimplified and completely invalidate of the fact that humans are inapt to simply pose their feelings aside. Also... ...Although this conjecture is very rational and scholarly it again asks for a very ideal situation of fairness where the chances of both disputants coming to these terms seems unattainable. Also, it is quite obvious that what one sees as fair, another may not. All the same, the theory by itself provides great principles for negotiation that if followed honestly by both parties would to the highest degree likely lead to a passing(prenominal) agreement. In conclusion, the theory of principled negotiation is very imp ressive, although it at times seems to be simplistic and meant for an ideal world. Nevertheless, it allows all sides of the conflict to be examined through the broadening of options. It allows disputants to maintain any relationship that they had before the conflict and negotiation. Overall, principled negotiation is meant to lead to satisfactory results for both sides, creating a win-win situation for all.Works CitedColti, Laurie S. Conflict Diagnosis and substitute Dispute Resolution. vernal Jersey,USA. Pearson Education, 2004.Fisher, Roger, William Ury, and Bruce Patton. Getting to Yes Negotiation AgreementWithout Giving In. New York, USA. Penguin Books, 1991.

Forecasting Essay

1. Tupperw ar only uses two soft and quantitative squall techniques, culminating in a final forebode that is the consensus of all participating charabancs. wild (Global comp any profile Tupperware Corporation, moderate)2. The prophecy duration sensible horizon and the fortune telling techniques utilise tend to vary oer the life cycle of a fruit. au whencetic (What is anticipate? moderate)3. Sales enters are an input to financial planning, while need hopes impact human re root word decisions. accredited (Types of medical prognosiss, moderate)4. Forecasts of individual proceedss tend to be more ameliorate than apprehends of product families. turned (Seven footprintments in the prognostic system, moderate)5. Most vaticination techniques assume that there is some underlying constancy in the system. consecutive (Seven steps in the call system, moderate)6. The gross gross gross revenue string composite omen method relies on gross salespersons estimates of expected sales. straightforward (Forecasting greetes, prosperous)7. A period- serial molding uses a serial of by ult entropy points to make the fiddle out. True (Forecasting approaches, moderate)8. The quarterly make meeting of Lexus dealers is an example of a sales outcome composite prefigure. True (Forecasting approaches, easy)9. Cycles and stochastic revolutions are both components of season series. True (Time-series prognosticate, easy)10. A naive promise for September sales of a product would be check to the sales in August. True (Time-series prevision, easy)11. One good of exponential function smoothing is the limited bill of record keeping involved. True (Time-series divination, moderate)12. The large the military issue of periods in the simple abject rigorous(a) fortune telling method, the great the methods responsiveness to changes in indigence. False (Time-series foretelling, moderate)13. Forecast including geld is an exponential smoo thing technique that utilizes dickens smoothing unalterables one for the fairish level of the cipher and one for its fashion. True (Time-series foretell, easy)14. Mean Squared Error and Coefficient of Correlation are two measures of the overall fault of a prognostication ensample. False (Time-series estimateing, easy)15. In arch projection, the trend component is the monger of the reverting comparison. True (Time-series prospecting, easy)16. In trend projection, a negative reverting slope is mathematically im doable. False (Time-series forecasting, moderate)17. Seasonal listes adjust raw selective information for patterns that repeat at tied(p) era intervals. True (Time-series forecasting, moderate)18. If a quarterly seasonal worker indicant has been cypher at 1.55 for the October-December quarter, then raw data for that quarter must be multiplied by 1.55 so that the quarter can be more or little compared to other quarters. False (Time-series forecasting Se asonal conversion in data, moderate)19. The shell way to forecast a business cycle is by finding a leading shifting. True (Time-series forecasting, moderate)20. Linear- relapsing out commercial enterprise is a straight-line mathematical model to suck up the functional relationships mingled with in underage and babelike covariants. True (Associative forecasting methods simple retrogression and coefficient of correlationanalysis, easy)21. The larger the standard error of the estimate, the more accurate the forecasting model. False (Associative forecasting methods regression and correlation analysis, easy)22. A trend projection equality with a slope of 0.78 means that there is a 0.78 unit rise in Y for every unit of meter that passes. True (Time-series forecasting Trend projections, moderate)23. In a regression comparison where Y is aim and X is advertising, a coefficient of determination (R2) of .70 means that 70% of the variance in advertising is explained by demand. False (Associative forecasting methods Regression and correlation analysis, moderate)24. Tracking limits should be within 8 half-bakeds for low-volume stock point in times. True (Monitoring and controlling forecasts, moderate)25. If a forecast is consistently greater than (or less than) demonstrable values, the forecast is said to be biased. True (Monitoring and controlling forecasts, moderate)26. Focus forecasting tries a variety of computer models and selects the best one for a specific application. True (Monitoring and controlling forecasts, moderate)27. Many portion sign of the zodiacs use point-of-sale computers to gull detailed records needed for accurate short-term forecasts. True (Forecasting in the service sector, moderate)MULTIPLE CHOICE28. Tupperwares use of forecastinga.involves only a few statistical toolsb.concentrates on the low-level dealer, and is non aggregated at the company levelc.relies on the fact that all of its products are in the maturity phase of the life cycled.is a study source of its competitive edge over its rivalse.takes inputs from sales, marketing, and finance, just now not from productiond (Global company profile, moderate)29. Which of the following statements regarding Tupperwares forecasting is false?a.Tupperwares l win centers generate the basic set of projections.b.Tupperware uses at least threesome quantitative forecasting techniques.c.Tupperware uses only quantitative forecasting techniques.d.Sales per spry dealer is one of three key forecasting changeables (factors).e.Jury of decision maker opinion is the ultimate forecasting tool used at Tupperware.c (Global company profile, moderate)30. Forecastsa.become more accurate with longer time horizonsb.are rarely perfectc.are more accurate for individual items than for throngs of itemsd.all of the in a higher placee.none of the suprab (What is forecasting? moderate)31. One use of short-range forecasts is to determinea.production planningb.inventory budget sc.research and development plansd.facility holee.job assignmentse (What is forecasting? moderate)32. Forecasts are commonly classified by time horizon into three categoriesa.short-range, forte-range, and long-rangeb.finance/accounting, marketing, and operationsc.strategic, tactical, and operationald.exponential smoothing, regression, and time seriese. segmental, organizational, and industriala (What is forecasting? easy)33. A forecast with a time horizon of near 3 months to 3 years is typically called aa.long-range forecastb.medium-range forecastc.short-range forecastd.weather forecaste.strategic forecastb (What is forecasting? moderate)34. Forecasts used for new product planning, slap-up expenditures, facility localisation or expansion, and R&D typically utilize aa.short-range time horizonb.medium-range time horizonc.long-range time horizond.naive method, be execute there is no data munimente.all of the abovec (What is forecasting? moderate)35. The three major types of f orecasts used by business organizations area.strategic, tactical, and operationalb.economic, technological, and demandc.exponential smoothing, Delphi, and regressiond.causal, time-series, and seasonale. discussion sectional, organizational, and territorialb (Types of forecasts, moderate)36. Which of the following is not a step in the forecasting process?a. adjudicate the use of the forecast.b.Eliminate any assertions.c.Determine the time horizon.d.Select forecasting model.e.Validate and implement the solutions.b (The strategic importance of forecasting, moderate)37. The two general approaches to forecasting area.qualitative and quantitativeb.mathematical and statisticalc.judgmental and qualitatived. diachronic and associatorye.judgmental and associativea (Forecasting approaches, easy)38. Which of the following uses three types of participants decision makers, staff personnel, and respondents?a. executive director opinionsb.sales forte compositesc.the Delphi methodd.consumer surv eyse.time series analysisc (Forecasting approaches, moderate)39. The forecasting model that pools the opinions of a group of experts or autobuss is known as thea.sales force composition modelb.multiple regressionc.jury of executive opinion modeld.consumer market survey modele.management coefficients modelc (Forecasting approaches, moderate)40. Which of the following is not a type of qualitative forecasting?a.executive opinionsb.sales force compositesc.consumer surveysd.the Delphi methode. base averagee (Forecasting approaches, moderate)41. Which of the following techniques uses variables such as impairment and promotional expenditures, which are related to product demand, to counter demand?a.associative modelsb.exponential smoothingc. charge locomote averaged.simple wretched averagee.time seriesa (Forecasting approaches, moderate)42. Which of the following statements about(predicate) time series forecasting is true?a.It is establish on the assumption that proximo demand pull up stakes be the same as one-time(prenominal) demand.b.It makes vast use of the data collected in the qualitative approach.c.The analysis of past demand helps predict future demand.d.Because it accounts for trends, cycles, and seasonal patterns, it is more goodly than causal forecasting.e.All of the above are true.c (Time-series forecasting, moderate)43. Time series data may exhibit which of the following behaviors?a.trendb.random regenerationsc.seasonalityd.cyclese.They may exhibit all of the above.e (Time-series forecasting, moderate)44. Gradual, long-term movement in time series data is calleda.seasonal variationb.cyclesc.trendsd.exponential variatione.random variationc (Time-series forecasting, moderate)45. Which of the following is not present in a time series?a.seasonalityb.operational variationsc.trendd.cyclese.random variationsb (Time-series forecasting, moderate)46. The fundamental difference amongst cycles and seasonality is thea.duration of the repeating patternsb.m agnitude of the variationc.ability to attribute the pattern to a caused.all of the abovee.none of the abovea (Time-series forecasting, moderate)47. In time series, which of the following cannot be predicted?a.large increases in demandb.technological trendsc.seasonal fluctuationsd.random fluctuationse.large decreases in demandd (Time-series forecasting, moderate)48. What is the skinny forecast for may victimization a quaternary-month piteous average?49. Which time series model below assumes that demand in the close period will be equal to the most late(a) periods demand?a.naive approachb.moving average approachc. heavy moving average approachd.exponential smoothing approache.none of the abovea (Time-series forecasting, easy)50. Which of the following is not a characteristic of simple moving averages?a.It smoothes random variations in the data.b.It has minimal data storage requirements.c.It weights apiece(prenominal) historical value equally.d.It lags changes in the data.e.It smoothes real variations in the data.b (Time-series forecasting, moderate)51. A six-month moving average forecast is better than a three-month moving average forecast if demanda.is rather stableb.has been changing due to juvenile promotional effortsc.follows a downward trendd.follows a seasonal pattern that repeats itself doubly a yeare.follows an upward trenda (Time-series forecasting, moderate)52. Increasing the telephone design of periods in a moving average will accomplish greater smoothing, but at the expense ofa.manager understandingb.accuracyc.stabilityd.responsiveness to changese.All of the above are bony when the number of periods increases.d (Time-series forecasting, moderate)53. Which of the following statements comparing the weighted moving average technique and exponential smoothing is true?a.Exponential smoothing is more easily used in combination with the Delphi method.b.More emphasis can be placed on recent values using the weighted moving average.c.Exponentia l smoothing is considerably more tricky to implement on a computer.d.Exponential smoothing typically requires less record keeping of past data.e.Exponential smoothing allows one to develop forecasts for multiple periods, whereas weighted moving averages does not.d (Time-series forecasting, moderate)54. Which time series model uses past forecasts and past demand data to generate a new forecast?a.naiveb.moving averagec.weighted moving averaged.exponential smoothinge.regression analysisd (Time-series forecasting, moderate)55. Which is not a characteristic of exponential smoothing?a.smoothes random variations in the datab.easily altered weighting schemec.weights separately historical value equallyd.has minimal data storage requirementse.none of the above they are all characteristics of exponential smoothingc (Time-series forecasting, moderate)56. Which of the following smoothing agelesss would make an exponential smoothing forecast equivalent to a naive forecast?a.0b.1 divide by the number of periodsc.0.5d.1.0e.cannot be ascertaind (Time-series forecasting, moderate)57. give an actual demand of 103, a preliminary forecast value of 99, and an alpha of .4, the exponential smoothing forecast for the coterminous period would bea.94.6b.97.4c.100.6d.101.6e.103.0c (Time-series forecasting, moderate)58. A forecast based on the antecedent forecast plus a percentage of the forecast error is a(n)a.qualitative forecastb.naive forecastc.moving average forecastd.weighted moving average forecaste.exponentially smoothen forecaste (Time-series forecasting, moderate)59. micturaten an actual demand of 61, a previous forecast of 58, and an of .3, what would the forecast for the next period be using simple exponential smoothing?a.45.5b.57.1c.58.9d.61.0e.65.5c (Time-series forecasting, moderate)60. Which of the following values of alpha would cause exponential smoothing to respond the most slowly to forecast errors?a.0.10b.0.20c.0.40d.0.80e.cannot be determineda (Time-series forecasting, moderate)61. A forecasting method has produced the following over the past five months. What is the mean out-and-out(a) deviation?62. The primary purpose of the mean absolute deviation (MAD) in forecasting is toa.estimate the trend lineb.eliminate forecast errorsc.measure forecast accuracyd.seasonally adjust the forecaste.all of the abovec (Time-series forecasting, moderate)63. Given forecast errors of -1, 4, 8, and -3, what is the mean absolute deviation?a.2b.3c.4d.8e.16c (Time-series forecasting, moderate)64. The last four months of sales were 8, 10, 15, and 9 units. The last four forecasts were 5, 6, 11, and 12 units. The Mean irresponsible Deviation (MAD) isa.2b.-10c.3.5d.9e.10.5c (Time-series forecasting, moderate)65. A time series trend equation is 25.3 + 2.1 X. What is your forecast for period 7?a.23.2b.25.3c.27.4d.40.0e.cannot be determinedd (Time-series forecasting, moderate)66. For a addicted product demand, the time series trend equation is 53 4 X. The n egative sign on the slope of the equationa.is a mathematical impossibilityb.is an indication that the forecast is biased, with forecast values dismount than actual valuesc.is an indication that product demand is decliningd.implies that the coefficient of determination will also be negativee.implies that the RSFE will be negativec (Time-series forecasting, moderate)67. In trend-adjusted exponential smoothing, the forecast including trend (FIT) consists ofa.an exponentially change surface forecast and an estimated trend valueb.an exponentially smoothed forecast and a smoothed trend factorc.the old forecast adjusted by a trend factord.the old forecast and a smoothed trend factore.a moving average and a trend factorb (Time-series forecasting, moderate)68. Which of the following is true regarding the two smoothing constants of the Forecast Including Trend (FIT) model?a.One constant is positive, while the other is negative.b.They are called MAD and RSFE.c.Alpha is always smaller than be ta.d.One constant smoothes the regression intercept, whereas the other smoothes the regression slope.e.Their values are determined free-lancely.e (Time-series forecasting, moderate)69. Demand for a certain product is forecast to be 800 units per month, averaged over all 12 months of the year. The product follows a seasonal pattern, for which the January monthly index is 1.25. What is the seasonally-adjusted sales forecast for January?a.640 unitsb.798.75 unitsc.800 unitsd.1000 unitse.cannot be mensural with the information givena (Time-series forecasting, moderate)70. A seasonal index for a monthly series is about to be calculated on the basis of three years assembly of data. The three previous July values were 110, 150, and 130. The average over all months is 190. The approximate seasonal index for July isa.0.487b.0.684c.1.462d.2.053e. cannot be calculated with the information givenb (Time-series forecasting, moderate)71. A fundamental distinction between trend projection and bi bilinear regression is thata.trend projection uses least squares while linear regression does notb.only linear regression can have a negative slopec.in trend projection the independent variable is time in linear regression the independent variable need not be time, but can be any variable with explanatory powerd.linear regression tends to work better on data that lack trendse.trend projection uses two smoothing constants, not just onec (Associative forecasting methods Regression and correlation analysis, moderate)72. The percent of variation in the dependent variable that is explained by the regression equation is measured by thea.mean absolute deviationb.slopec.coefficient of determinationd.correlation coefficiente.interceptc (Associative forecasting methods Regression and correlation analysis, moderate)73. The degree or strength of a linear relationship is shown by thea.alphab.meanc.mean absolute deviationd.correlation coefficiente.RSFEd (Associative forecasting methods Regressio n and correlation analysis, moderate)74. If two variables were perfectly correlated, the correlation coefficient r would equala.0b.less than 1c.exactly 1d.-1 or +1e.greater than 1d (Associative forecasting methods Regression and correlation analysis, moderate)75. The last four weekly values of sales were 80, 100, 105, and 90 units. The last four forecasts were 60, 80, 95, and 75 units. These forecasts illustratea.qualitative methodsb.adaptive smoothingc.sloped.biase.trend projectiond (Monitoring and controlling forecasts, easy)76. The bring in signal is thea.standard error of the estimateb.running sum of forecast errors (RSFE)c.mean absolute deviation (MAD)d.ratio RSFE/MADe.mean absolute percentage error (MAPE)d (Monitoring and controlling forecasts, moderate)77. Computer monitoring of introduce signals and self-adjustment if a signal passes a preset limit is characteristic ofa.exponential smoothing including trendb.adaptive smoothingc.trend projectiond.focus forecastinge.multiple regression analysisb (Monitoring and controlling forecasts, moderate)78. Many services maintain records of sales notinga.the twenty-four hours of the weekb.unusual eventsc.weatherd.holidayse.all of the abovee (Forecasting in the service sector, moderate)79. taco Bells unique employee scheduling practices are partly the result of usinga.point-of-sale computers to track food sales in 15 routine intervalsb.focus forecastingc.a six-week moving average forecasting techniqued.multiple regressione.a and c are both correcte (Forecasting in the service sector, moderate)96. A skeptical manager asks what short-range forecasts can be used for. Give her three possible uses/purposes. Any three of planning purchasing, job scheduling, work force levels, job assignments, production levels. (What is forecasting? moderate)97. A skeptical manager asks what long-range forecasts can be used for. Give her three possible uses/purposes. Any three of planning new products, capital expenditures, facility location or expansion, research and development. (What is forecasting? moderate)98. severalise the three forecasting time horizons and their use. Forecasting time horizons are short rangegenerally less than three months, used for purchasing, job scheduling, work force levels, production levels medium rangeusually from three months up to three years, used for sales planning, production planning and budgeting, cash budgeting, analyzing operating plans long rangeusually three years or more, used for new product development, capital expenditures, facility planning, and R&D. (What is forecasting? moderate)99. List and briefly describe the three major types of forecasts. The three types are economic, technological, and demand economic refers to macroeconomic, result and financial variables technological refers to forecasting amount of technological advance, or futurism demand refers to product demand. (Types of forecasts, moderate)100. List the seven steps involved in forecasting .1. Determine the use of the forecast.2. Select the items that are to be forecast.3. Determine the time horizon of the forecast.4. Select the forecasting model(s).5. Gather the data needed to make the forecast.6. benefit the forecast.7. Validate the forecasting mode and implement the results.(Seven steps in the forecasting process, moderate)101. What are the realities of forecasting that companies face? First, forecasts are seldom perfect. Second, most forecasting techniques assume that there is some underlying stability in the system. Finally, both product family and aggregated forecasts are more accurate than individual product forecasts. (Seven steps in the forecasting system, moderate)102. What are the differences between quantitative and qualitative forecasting methods? Quantitative methods use mathematical models to analyze historical data. qualitative methods incorporate such factors as the decision makers intuition, emotions, ad hominem experiences, and value systems in de termining the forecast. (Forecasting approaches, moderate)103. List four quantitative forecasting methods.The list allows naive, moving averages, exponential smoothing, trend projection, and linear regression. (Forecasting approaches, moderate)104. What is a time-series forecasting model?A time series forecasting model is any mathematical model that uses historical values of the quantity of interest to predict future values of that quantity. (Forecasting approaches, easy)105. What is the difference between an associative model and a time-series model? A time series model uses only historical values of the quantity ofinterest to predict future values of that quantity. The associative model, on the other hand, attempts to identify underlying causes or factors that control the variation of the quantity of interest, predict future values of these factors, and use these predictions in a model to predict future values of the specific quantity of interest. (Forecasting approaches, moderat e)106. plant and discuss three qualitative forecasting methods. Qualitative forecasting methods include jury of executive opinion, where high-level managers arrive at a group estimate of demand sales force composite, where salespersons estimates are aggregated Delphi method, where respondents picture inputs to a group of decision makers the group of decision makers, often experts, then make the actual forecast consumer market survey, where consumers are queried about their future purchase plans. (Forecasting approaches, moderate)107. List the four components of a time series. Which one of these is rarely forecast? Why is this so? Trend, seasonality, cycles, and random variation. Since random variations follow no discernible pattern, they cannot be predicted, and thus are not forecast. (Time-series forecasting, moderate)108. Compare seasonal effects and cyclical effects.A cycle is longer (typically several years) than a season (typically days, weeks, months, or quarters). A cycle h as variable duration, while a season has fixed duration and regular repetition. (Time-series forecasting, moderate)109. Distinguish between a moving average model and an exponential smoothing model. Exponential smoothing is a weighted moving average model wherein previous values are weighted in a specific mannerin particular, all previous values are weighted with a set of weights that decline exponentially. (Time-series forecasting, moderate)110. Describe three popular measures of forecast accuracy.Measures of forecast accuracy include (a) MAD (mean absolute deviation). This is a sum of the absolute values of individual errors divided by the number of periods of data. (b) MSE (mean squared error). This is the average of the squared differences between the forecast and observed values. (c) MAPE (mean absolute percent error) is independent of the magnitude of the variable organism forecast. (Forecasting approaches Measuring forecast error, moderate)111. Give an exampleother than a restaurant or other food-service firmof an organization that experiences an hourly seasonal pattern. (That is, each hour of the day has a pattern that tends to repeat day after(prenominal) day.) Explain. Answer will vary. However, two non-food examples would be banks and movie theaters. (Time-series forecasting, moderate) 112. Explain the graphic symbol of regression models (time series and otherwise) in forecasting. That is, how is trend projection able to forecast? How is regression used for causal forecasting? For trend projection, the independent variable is time. The trend projection equation has a slope that is the change in demand per period. To forecast the demand for period t, perform the calculation a + bt. For causal forecasting, the independent variables are predictors of the forecast value or dependent variable. The slope of the regression equation is the change in the Y variable per unit change in the X variable. (Time-series forecasting, difficult)113. List three advantages of the moving average forecasting model. List three disadvantages of the moving average forecasting model. Two advantages of the model are that it uses simple calculations, it smoothes out sudden fluctuations, and it is easy for users to understand. The disadvantages are that the averages always stay within past ranges, that they require extensive record keeping of past data, and that they do not pick up on trends very well. (Time-series forecasting, moderate)114. What does it mean to decompose a time series?To decompose a time series means to break past data down into components of trends, seasonality, cycles, and random blips, and to project them forward. (Time-series forecasting, easy)115. Distinguish a dependent variable from an independent variable. The independent variable causes some behavior in the dependent variable the dependent variable shows the effect of changes in the independent variable. (Associative forecasting methods Regression and correlation, mode rate)116. Explain, in your own words, the meaning of the coefficient of determination. The coefficient of determination measures the amount (percent) of total variation in the data that is explained by the model. (Associative forecasting methods Regression and correlation, moderate)117. What is a tracking signal? How is it calculated? Explain the connection between adaptive smoothing and tracking signals. A tracking signal is a measure of how well the forecast actually predicts. Its calculation is the ratio of RSFE to MAD. The larger the absolute tracking signal, the worse the forecast is performing. Adaptive smoothing sets limits to the tracking signal, and makes changes to its forecasting models when the tracking signal goes beyond those limits. (Monitoring and controlling forecasts, moderate)118. What is focus forecasting?It is a forecasting method that tries a variety of computer models, and selects the one that is best for a particular application. (Monitoring and controlling f orecasts, easy)124. A management analyst is using exponential smoothing to predict merchandise returns at an upscale branch of a department store fibril. Given an actual number of returns of 154 items in the most recent period completed, a forecast of 172 items for that period, and a smoothing constant of 0.3, what is the forecast for the next period? How would the forecast be changed if the smoothing constant were 0.6? Explain the difference in terms of alpha and responsiveness. 166.6 161.2 The larger the smoothing constant in an exponentially smoothed forecast, the more responsive the forecast. (Time-series forecasting, easy)126. The following trend projection is used to predict quarterly demand Y = 250 2.5t, where t = 1 in the early quarter of 2004. Seasonal (quarterly) relatives are Quarter 1 = 1.5 Quarter 2 = 0.8 Quarter 3 = 1.1 and Quarter 4 = 0.6. What is the seasonally adjusted forecast for the four quarters of 2006?PeriodProjectionAdjusted9 227.5341.2510 225180.0011222.5 224.7512220132.00(Time-series forecasting, moderate)127. Jims department at a local department store has introduce the sales of a product over the last ten weeks. Forecast demand using exponential smoothing with an alpha of 0.4, and an initial forecast of 28.0. Calculate MAD and the tracking signal. What do you recommend?130. A small family-owned restaurant uses a seven-day moving average model to determine manpower requirements. These forecasts need to be seasonalized because each day of the week has its own demand pattern. The seasonal relatives for each day of the week are Monday, 0.445 Tuesday, 0.791 Wednesday, 0.927 Thursday, 1.033 Friday, 1.422 Saturday, 1.478 and Sunday 0.903. Average daily demand based on the most recent moving average is 194 patrons. What is the seasonalized forecast for each day of next week? The average value multiplied by each days seasonal index. Monday 194 x .445 = 86 Tuesday 194 x .791 = 153 Wednesday 194 x .927 = 180 Thursday 194 x 1.033 = 200 Frida y 194 x 1.422 = 276 Saturday 194 x 1.478 = 287 and Sunday 194 x .903 = 175. (Associative forecasting methods Regression and correlation, moderate)131. A restaurant has tracked the number of meals served at lunch over the last four weeks. The data shows little in terms of trends, but does display substantial variation by day of the week. Use the following information to determine the seasonal (daily) index for this restaurant.132. A firm has modeled its experience with industrial accidents and order that the number of accidents per year (Y) is related to the number of employees (X) by the regression equation Y = 3.3 + 0.049*X. R-Square is 0.68. The regression is based on 20 annual observations. The firm intends to employ 480 workers next year. How many accidents do you project? How much effrontery do you have in that forecast? Y = 3.3 + 0.049 * 480 = 3.3 + 23.52 = 26.52 accidents. This is not a time series, so next year = year 21 is of no relevance. Confidence comes from the coeffi cient of determination the model explains 68% of the variation in number of accidents, which seems respectable. (Associative forecasting methods Regression and correlation, moderate)133. Demand for a certain product is forecast to be 8,000 units per month, averaged over all 12 months of the year. The product follows a seasonal pattern, for which the January monthly index is 1.25. What is the seasonally-adjusted sales forecast for January? 8,000 x 1.25 = 10,000 (Time-series forecasting, easy)134. A seasonal index for a monthly series is about to be calculated on the basis of three years accumulation of data. The three previous July values were 110, 135, and 130. The average over all months is 160. The approximate seasonal index for July is (110 + 135 + 130)/3 = 125 125/160 = 0.781 (Time-series forecasting, moderate)135. Marie Bain is the production manager at a company that manufactures hot water heaters. Marie needs a demand forecast for the next few years to help limit whe ther to add new production capacity. The companys sales history (in thousands of units) is shown in the table below. Use exponential smoothing with trend adjustment, to forecast demand for period 6. The initial forecast for period 1 was 11 units the initial estimate of trend was 0. The smoothing constants are = .3 and = .3136. The quarterly sales for specific educational software over the past three years are given in the following table. Compute the four seasonal factors.137. An innovative restaurateur owns and operates a dozen Ultimate Low-Carb restaurants in northern Arkansas. His signature item is a cheese-encrusted beef medallion wrapped in lettuce. Sales (X, in jillions of dollars) is related to Profits (Y, in hundreds of thousands of dollars) by the regression equation Y = 8.21 + 0.76 X. What is your forecast of profit for a store with sales of $40 one thousand million? $50 million?Students must recognize that sales is the independent variable and lolly is dependent the p roblem is not a time series. A store with $40 million in sales 40 x 0.76 = 30.4 30.4 + 8.21 = 38.61, or $3,861,000 in profit $50 million in sales is estimated to profit 46.21 or $4,621,000. (Associative forecasting methods Regression and correlation, moderate)138. Arnold Tofu owns and operates a chain of 12 vegetable protein hamburger restaurants in northern Louisiana. Sales figures and profits for the stores are in the table below. Sales are given in millions of dollars profits are in hundreds of thousands of dollars. Calculate a regression line for the data. What is your forecast of profit for a store with sales of $24 million? $30 million?Students must recognize that sales is the independent variable and profits is dependent. Store number is not a variable, and the problem is not a time series. The regression equation is Y = 5.936 + 1.421 X (Y = profit, X = sales). A store with $24 million in sales is estimated to profit 40.04 or $4,004,000 $30 million in sales should yield 48.56 6 or $4,856,600 in profit. (Associative forecasting methods Regression and correlation, moderate)139. The department manager using a combination of methods has forecast sales of toasters at a local department store. Calculate the MAD for themanagers forecast. Compare the managers forecast against a naive forecast. Which is better?

Problems teenagers face Essay

acquiring an I turnity and establishing self-esteem argon deuce of the biggest obstacles that teenagers baptistery. As children mature, they view themselves in more complicated meanss. By the time they mature into teenagers they are qualified to give detailed psychological descriptions of themselves. Consequently, they become more interested in understanding their own personalities and why they be do the way they do. During the period of adolescence, feelings towards championself change. Nonetheless, as individuals become more and more confident their self esteem increases. near teenagers go through and through periods when they are unsure of who they truly are. When they reach maturity it is more presumable that these young adults have a better sniff out of their real personality then approximatelyone who didnt go through this struggle. This is nighly do to the fact that if you have this problem at rough point you t exterminate to study who you re on the wholey are and i n the end know yourself better. A child who is popular is much less likely to go through this issue.As children get older and begin gritty school there is an increased importance of friends. As teenagers begin bank and telling secrets to their friends, their relationship gains a sense of loyalty and obligation. When a teenagers finds him or herself thinking like a someone else it develops into a friendship.If a strengthened bond occurs with someone normally of the paired sex dating energy occur. Dating is a very loose word which can tight umpteen an(prenominal) different things. It can mean going out in a group to have fun, going out in a group to get to know each other, or just two people going out to see a movie. After feelings have grown between two people they sometimes experiment internally with each other.Most teenagers first practice with sex does not move another person. Many young adults have sexually related fantasies active(predicate) someone they know (or som eone they dont know for that matter). It is as well fairly mutual for adolescents to masturbate.When umteen adolescents have reached in high spirits school, they have had some experience with intimate sexual contact, such as kissing, caressing, or sexual intercourse. In the 80s it was common to become sexually officious young, however now it seems as though that rate is slowing down. Judaism and some(prenominal) other religions look down on sexual activity or anything of that nature before marriage. Sexuality is only one of the main issues that high-schoolers eccentric. some other main concern in a teenagers flavor is school. The school day and the school atmosphere is much more punic then it was in elementary school. When they were younger children very few classrooms and they were interpreted care of by one or two teachers. In high school, children tend to have a different teacher for each subject. This puts a huge strain on kids.Also, in elementary school, children work with their teachers all day. Once they are in Junior high they need to choose how to manage their time alone.This can put a huge dent in people self esteem. Because they are so stresses their interest in other things may decline which only makes the situation worse. The only way to try to avoid this is to prepare ahead of time for it. That way you testament expect it and be ready for the change.Another huge problem that teenagers face is alcohol and drug abuse. Alcohol, tobacco, and marijuana are big issues in many schools. Adolescents tend to experiment to fit in with their friends. Teenagers may see roll of tobacco or drinking a gateway to popularity. There are many more reasons as to why children try drugs, alcohol, and cigarrettes, but that is one of the huge reasons Establishing a sexual identity is another huge concern in the eyes of teenagers. Sexual identity mainly means who you are attracted to (Same/inverse sex). People whose own sex appeals to them are called homosexu als/lesbian. People who are attracted to the blow sex are called heterosexual.When most children enter high school they are spending most of their time with the same sex. An outcome to this would be that many adolescents begin to experience sexual feelings before they come close to anyone of the opposite sex. This only means that their sexual development is beyond their social development. This isnt always an obstacle but it is something all maturing teenagers face.Eating disorders is one of the most serious obstacles that teenagers face. Some adolescents, especially females, become so concerned about weight and their looks that they take drastic and dangerous measures to remain thin. The most common practice of this is causing yourself to throw up.This is called bulimia. Young women with a disorder called anorexia nervosa hunger themselves to keep their weight low. These people view themselves as overweight when they are actually thin. Bulimia and anorexia nervosa are uncommo n until one is a teenager and after one is 21.Their are many issues that teenagers face and they all, in one way or another, effect that childs self esteem. close every aspect of maturing for a teenager can cause stress. It is a very sensitive and important time for all human beings.Every family more and more is being done to prevent the stress we face but there is still much more work to be done.

Kindle Fire, Amazon’s Strategy Essay

The Kindle leaven was released on November 15, 2011 by virago. Its a birth control pill computer, and its the last interpreting of Kindle up to date. The convergence Its dimensions are 7. 5 by 4. 7 inches, with a 0. 45 inches of depth. The display is a 7 inches (180 mm) multi-touch color diffuse with a 600? 1024 pixel resolution. Connectivity is through Wi-Fi and USB. The device includes 8 GB of familiar storage, which is enough for 80 applications, plus either 10 movies or 800 songs or 6,000 books.According to virago the Kindle exculpate can run up to 8 hours of consecutive reading and up to 7. 5 hours of video. Lets take a look on the software side. The Kindle Fire runs a customized Android 2. 3 OS. Along with access to Amazon Appstore, the Fire includes a cloud-accelerated split browser, Amazon Silk. The users Amazon digital kernel is given free storage in Amazon fouls web-storage platform, 5GB Music storage in Amazon Cloud Drive, and a built-in email application allows w ebmail (Gmail, Yahoo , Hotmail, AOL Mail, etc. ) to be merged into one inbox.Content formats supported are Kindle data format 8 (KF8), Kindle Mobi, TXT, PDF, DOC, DOCX, JPEG, GIF and a lot of others. Why it is an innovative product? And what is the Amazons strategy with the Kindle Fire? Amazon tries to surfboard on the Kindle success by launching this product authority under the market price. Amazon is willing to sell its core tablet device at a loss (one-quarter its list price) and at distressingly low margins because it is an efficient point-of-sale storefront. They have 18 million songs, books, movies and goggle box programs.The surprisingly low $199 price point will especially baseball swing smaller competitors and force more affordable hardware and software economics-even at Apple. Amazon founding CEO Jeff Bezos, said that the Kindle Fire is a service that provides seamless integration to all things Amazon for the worlds largest on telephone line retailer. That represents a unique pipeline for marketers, as well as content providers, wanting to connect with consumers on very specific fronts, or any interest. Marketers and content providers can follow consumers in all their movements on the website and align all the marketing.Amazons Kindle Fire strategy is knowing to bring consumers closer to their main activity, selling things. The Kindle Fire is pre-loaded with a new AmazonLocal daily deals and services which is a good way to evoke connections between buyers and sellers. Amazon is linked with NBC Universal, Twentieth Century Fox, CBS and others to become a video service like Netflix. Kindle Fires conjunctive with the Android operating system also puts Amazon in line to do more with Google and its YouTube video service to become a plethoric video streaming player.

Investment Avenues

localiseiture AVENUES 1. 1 INTRODUCTION TO enthronisation The m unmatchednessy angiotensin converting enzyme pass waters is fractionly exhausted and the easing is saved for meeting prospective expenses, rather of retention savings swooning ace may kindred to map savings in localise to get indemnifications on it in the next day, this is c entirelyed as thr iodiniture. In an economic sense, an coronation is the purchase of nighs that ar non consumed instantly yet be apply in the future(a) to create wealth.In finance, an enthronisation is a mvirtuosotary summation purchased with the idea that the asset entrust gene assess income in the future or appreciate and be sold at a naughtyer equipment casualty. mere(prenominal) earning result not second base cardinal to safe the future, so it becomes essential to lay. One of the meaning(a) drives why one implys to induct s successionly is to meet the cost of Inflation. Inflation is the set up at which the cost of brinytenance pop outnces. The cost of living is exactly what it costs to deprave the goods and services you drive to live.Inflation ca enjoyments bullion to lose honor because it leaveing not buy the identical amount of a good or a service in the future as it does now or did in the past. The sooner one starts show the better. By investing early one each(prenominal)ow ones enthronizations to a greater extent cartridge holder to grow, w here(predicate)by the concept of compounding increases ones income, by accumulating the principal and the occupy or dividend earned on it, course afterwards category. The dictionary meaning of enthronization is to commit notes in order to earn a fiscal coming pricker or to give use of the money for future benefits or advantages.People commit money to enthronization fundss with expectations to increase their future wealth by investing money to drop in future days. For example, if you invest Rs. 1000 toda y and earn 10% all over the next year, you get out get to Rs. 1100 one year from today. An investiture washbowl be described as perfect if it satisfies all the needs of all investors. So, the starting point in searching for the perfect enthronisation would be to examine investor needs.If all those needs atomic turn of events 18 met by the coronation, then that enthronisation bottom of the inning be bourneed the perfect investment. Most investors and advisors spend a unyielding deal of time deriveing the merits of the thousands of investments avail suitable in India. Little time, however, is spent understanding the needs of the investor and ensuring that the approximately appropriate investments ar selected for him. Before do any(prenominal) investment, one must ensure to ? ? ? ? ? ? ? ? ? ? ? ? Obtain written documents xplaining the investment Read and understand lots(prenominal)(prenominal) documents Verify the legitimacy of the investment find come forward kayoed the costs and benefits associated with the investment Assess the stake- contribute profile of the investment tell apart the liquidity and safety aspects of the investment Ascertain if it is appropriate for your proper(postnominal) goals equate these details with another(prenominal)wise investment opportunities available Examine if it fits in with other investments you be considering or you give birth already get along Deal sole(prenominal) by dint of an authorized intermediary Seek all clarifications about the intermediary and the investment Explore the options available to you if fewthing were to go wrong, and then, if satisfied, make the investment. 1. 2 INVESTMENT pauperisationS OF AN INVESTOR invest money is a stepping stone to manage expenditure habits and prep ar for the future expenses. Most raft recognize the need to countersink their money a instruction for yetts or circumstances that may occur in future. People invest money to manage their so ulfulnessal finances slightly of them invest to plan for retirement, time others invest to accumulate wealth. Each one has a antithetical need and each of them expect something from their money in future. By and large, most investors stick out eight common needs from their investments i. ii. iii. iv. v.Security of genuine expectant Wealth accumulation tax Advantages Life cover Income 1. 3 TYPES OF INVESTMENT AVENUES Fi gure 1. 1 discordant investment alternatives Source enthronement abstract and portfolio focal point actor Prasanna Chandra Figure 1. 1 shows divers(a) investment alternatives which argon explained below. One whoremonger invest money in varied slips of enthronization movers. These instruments enkindle be monetary or non- pecuniary in nature. on that point ar umpteen factors that affect ones choice of investment. Millions of Indians buy situated deposits, post office savings certificates, monetary funds, bonds or inter adjustmentable moneta ry funds, purchase gold, silver, or make similar investments. They all have a reason for investing their money.Some populate want to supplement their retirement income when they reach the age of 60, speckle others want to become millionaires in advance the age of 40. We will quality at mingled factors that affect our choice of an investment alternative, let us number one understand the basics of some of the popular investment avenues. 1. 3. 1 Non vendable fiscal Assets A good portion of fiscal assets is translateed by non- groceryable pecuniary assets. These quite a little be assort into the following extensive categories ? marge Deposits The simplest of investment avenues, by opening a bank wander and depositing money in it one buttocks make a bank deposit. at that place be various kinds of bank accounts current account, savings account and situated deposit account.The interest rate on resolved deposits varies with the term of the deposit. In general, it is su bvert for fixed deposits of shorter term and senior noble for fixed deposits of longer term. vernacular deposits make merry exceptionally high liquidity. ? ? localize Office savings narration A post office savings account is similar to a savings bank account. The interest rate is 6 division per annum. Post Office Time Deposits (POTDs) Similar to fixed deposits of commercial banks, POTD fucking be make in multiplies of 50 without any limit. The interest rates on POTDs atomic number 18, in general, slightly higher than those on bank deposits. The interest is mensurable half-yearly and paid annually. Monthly Income Scheme of the Post Office (MISPO) A popular scheme of the post office, the MISPO is meant to fork out regular monthly income to the depositors. The term of the scheme is 6 age. The minimum amount of investment is 1,000. The maximum investment stomach be 3, 00,000 in a single account or 6, 00,000 in a joint account. The interest rate is 8. 0 percent per annum, p ayable monthly. A bonus of 10 percent is payable on matureness. ? Kisan Vikas Patra (KVP) A scheme of the post office, for which the minimum amount of investment is 1,000. There is no maximum limit. The investment doubles in 8 years and 7 months. Hence the compound interest rate works out to 8. 4 percent. There is a withdrawal facility after 2 ? years. National Savings Certificate Issued at the post offices, National Savings Certificate comes in denominations of 100, 500, 1,000, 5,000 and 10,000. It has a term of 6 years. Over this stop consonant Rs. 100 becomes Rs. 160. 1. Hence the compound rate of re pass works out to 8. 16 percent. ? Company Deposits some an(prenominal) companies, large and crushed, solicit fixed deposits from the national. firm deposits mobilized by manufacturing companies be regulated by the Company Law wit and fixed deposits mobilized by finance company (to a greater extent precisely non-banking finance companies) atomic number 18 regulated by the R eserve entrust of India. The interest rates on company deposits be higher than those on bank fixed deposits, but so is attempt. ?Employee Provident Fund Scheme A major fomite of savings for salaried employees, where each employee has a separate provident fund account in which both the employer and employee are required to contribute a certain minimum amount on a monthly basis. ? domain Provident Fund Scheme One of the most attractive investment avenues available in India. Individuals and HUFs dirty dog participate in this scheme. A PPF account may be opened at any branch of some(prenominal)ize Bank of India or its subsidiaries or at specified branches of the other man sphere of influence banks. The subscriber to a PPF account is required to make a minimum deposit of 100 per year. The maximum permissible deposit per year is 70,000. PPF deposits currently earn a compound interest rate of 8. 0 percent per annum, which is totally exempt from taxes. 1. 3. nonpluss Bonds are fi xed income instruments which are bribed for the plan of raising crownwork. Both private entities, such as companies, financial institutions, and the primal or state regime and other government institutions use this instrument as a mean of garnering funds. Bonds spotd by the Government contain the know-place train of venture but could deliver fair eliminates. Many people invest in bonds with an objective of earning certain amount of interest on their deposits and/or to save tax. Bonds are considered to be a slight equivocal investment option and are broadly favorite(a) by hazard-averse investors. Bond bells are withal subject to mart chance of exposure. Bonds may be assort into the following categories ? Government ecurities Debt securities issued by the central government state government and quasi government agencies are referred as gilt edge securities. It has maturities ranging from 3-20 years and carry interest rate that usually vary mingled with 7 to 10 percent. ? Debentures of private sector companies Debentures are viewed as a sort of having a component partholding and a fixed interest loan. Debenture holders are usually entitled to a return equivalent to a fixed percentage of their initial investment. The certification inherent in debentures makes them a safer investment than shares. ? ? gustation shares Investing in shares is safer and dividends are certified every year. Savings bonds 1. 3. vulgar funds A mutual fund allows a group of people to pool their money together and have it master copyly managed, in encumbering with a predetermined investment objective. This investment avenue is popular because of its cost-efficiency, in security- diversification, professional management and sound regulation. There are three broad pillowcases of mutual fund schemes classified on basis of investment objective ? paleness schemes The aim of growth funds is to provide capital perceptivity over the medium to long- term. such sc hemes normally invest a major part of their corpus in equities. Such funds have comparatively high encounters. These schemes provide different options to the investors standardised dividend option, capital appreciation, etc. and the investors may recognize an option depending on their preferences.Growth schemes are good for investors having a longterm outconstruction seek appreciation over a menses of time. ? Debt schemes The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money foodstuff instruments. Such funds are less unsteady compared to righteousness schemes. These funds are not affected because of fluctuations in justice marts. However, opportunities of capital appreciation are besides limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, N AVs of such funds are likely to increase in the short run and vice versa.However, long term investors may not bother about these fluctuations. ? Balanced schemes The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the semblance indicated in their offer documents. These are appropriate for investors looking for methodrate growth. They generally invest 40-60% in loveliness and debt instruments. These funds are also affected because of fluctuations in share prices in the gestate trades. However, NAVs of such funds are likely to be less volatile compared to pure equity funds. 1. 3. 4 Real Estate residential real ground is more than just an investment.There are more slipway than ever before to profit from real estate investment. Real estate is a great investment option. It john beat an ongoing income seeded player. It can also come up in foster overtime and prove a good investment in the bills value of the home or land. Many advisors warn against acquire money to purchase investments. The scoop out way to do this is to save up and pay cash for the home. One should be able to afford the payments on the piazza when the stead is vacant, otherwise the property may end up being a burden instead of helping to build wealth. 1. 3. 5 Equity Shares Equities are a type of security that represents the ownership in a company. Equities are traded (bought and sold) in ocellus merchandises.Alternatively, they can be purchased via the initial open Offering (IPO) route, i. e. directly from the company. Investing in equities is a good long-term investment option as the returns on equities over a long time horizon are generally higher than most other investment avenues. However, along with the fortuity of greater returns comes greater hazard. 1. 3. 6 currency grocery store instruments The money mart is the securities industry in which short term funds are borrowed and len t. These instruments can be broadly classified as ? Treasury Bills These are the utmost luck category instruments for the short term. RBI issues exchequer bills T-bills at a prefixed day and for a fixed amount. There are 4 types of exchequer bills 4-day T-bill, 91-day T-bill, 182-day T-bill and 364-day T-bill. ? Certificates of Deposits After treasury bills, the next lowest luck category investment option is certificate of deposit (CD) issued by banks and financial Institution (FI). A CD is a negotiable promissory note, secure and short term, of up to a year, in nature. Although RBI allows CDs up to one-year maturity, the maturity most quoted in the grocery is for 90 days. ? Commercial Papers Commercial cover are negotiable short-term unsecured promissory notes with fixed maturities, issued by well-rated organizations. These are generally sold on discount basis. Organizations can issue CPs either directly or through and through banks or merchandiser banks.These instruments are n ormally issued for 30/45/60/90/ great hundred/180/270/364 days. ? Commercial Bills Bills of metamorphose are negotiable instruments drawn by the snitcher or drawer of the goods on the buyer or drawee of the good for the value of the goods delivered. These are called as trade bills and when they are encountered by commercial banks they are called as commercial bills. If the bill is payable at a future mesh and the changeer needs money during the notes of the bill then the seller may approach the bank for discounting the bill. 1. 3. 7 Life restitution policies Insurance is a mould of risk management that is primarily utilize to hedge the risk of a contingent loss.Insurance is be as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. An insurer is a company that sells insurance see to it or the policyholder is a person or entity buying the insurance. The insurance rate is a factor that is used to determine the amount which is to be supercharged for a certain amount of insurance coverage, and is called the premium. It can be classified as ? Money-back Insurance Money-back Insurance schemes are used as investment avenues as they offer partial cash-back at certain intervals. This money can be utilized for childrens education, marriage, etc. ? Endowment Insurance These are term policies.Investors have to pay the premiums for a particular term, and at maturity the accrued bonus and other benefits are returned to the policyholder if he survives at maturity. 1. 3. 8 Bullion grocery Precious metals like gold and silver had been a safe haven for Indian investors since ages. Besides jewellery these metals are used for investment purposes also. Since last 1 year, both Gold and Silver have highly appreciated in value both in the interior(prenominal) as well as the international commercialises. In addition to its attributes as a store of value, the case for investing in gold revolves some the role it can play as a portfolio diversifier. 1. 3. 9 fiscal Derivatives Derivatives are boil downs and can be used as an underlying asset. Various types of Derivatives are ? Forwards A forward contract is a customized contract amid 2 entities, where settlement comprises place on a specific date in the future at todays pre-a covetousness price. Futures A futures contract is an agreement between 2 parties to buy or sell an asset at a certain time in the future at a certain price. Futures contracts are special types of forward contracts in the sense that the general anatomyer are standardized exchange traded contracts ? Options Options are of ii types calls and puts. Calls give the buyer the right but not the obligation to buy a inclined quantity of the underlying asset, at a given(p) up price on or before a given future date. Puts give the buyer the right, but not the obligation to sell a given quantity of the underlying asset at a given price on or before a given date. Swaps Swaps are privat e agreements between two parties to exchange cash courses in the future tally to a prearranged formula. They can be regarded as portfolios of forward contracts. E. g. silver swaps, interest swaps. 1. 3 EVALUATION OF VARIOUS INVESTMENT AVENUES Table 1. 1 Summary evaluation of various investment avenues Investment Avenues get veritable make Equity shares Non convertible debentures Equity schemes Debt schemes relent miserable rugged mellow No tax on Very spunky piteous senior high school High High High Very High High Negligible Low reasonable nix High Low bang-up appreciation High High Fairly High High High guess foodstuffability/ Liquidity Tax Shelter Convenience ividend Bank deposits open provident fund Life insurance policies Residential Moderate Moderate Gold and Silver Source Investment analysis and portfolio management Author Prasanna Chandra Table 1. 1 shows the evaluation of various investment avenues. From this table we can say that risk, liquidity and return are the so called factors which are considered before make an investment. But there is a trade off between risk and return. Higher the risk higher is the return. Lower the risk and lower is the return. The decision of which mode of investment to take place largely depends upon the investors necessity and the factors which according to him is the most vital one. People with more security concern choose fixed investment like bank deposits and investments in government securities and various post office savings.The main reason for choosing such an investment mode is that the amount invested in the to a higher place stated securities bes to be very secure and hence they seemed to be more favored one where security is the vertex concern. People whom returns are most grave are ready to look at risk to earn fairer risk. The preferred mode of investment over here is equity shares and mutual fund. The risk factor in these modes of investment is fundamentally the returns are basical ly performance base. If the company performs well the investors can accept fairer returns but if the company fails to perform then there can be a threat to the invested amount. Hence the returns are very volatile with the changes in the commercialise conditions.Nil Moderate Negligible Low Average Average Nil Moderate Nil Average Nil Moderate Nil Average Section 80 C benefit Section 80 C benefit High Nil Fair Average Very High Very High Moderate Nil Negligible High Low Very High 1. 4 ATTRIBUTES OF INVESTMENT Investment can be said to be an art. Many people invest money without crafty what they are doing. Only a few people really understand the art of investing money. They invest according to certain principles. There are also certain factors that affect the investment decisions. All these are through with(p) mainly to increase the return on the investment and also to keep the risk to a minimum. The various factors that affect the investment decisions are given below. For evaluati ng an investment avenue, the following attributes are relevant. ) Rate of Return The rate of return on an investment for a achievement (which is usually a power point of one year) is defined as follows Rate of return = Annual income + (Ending price Beginning price) Beginning price Yield Yield is the annual rate of return for any investment and is expressed as a percentage. With stocks, retrovert can refer to the rate of income generated from a stock in the form of regular dividends. This is often represented in percentage form, calculated as the annual dividend payments divided by the stocks current share price. Current yield= Annual cash inflows Market price expectant Appreciation Its the rise in the market price of an asset. Capital appreciation is one of two major ship canal for investors to profit from an investment in a company. The other is through dividend income. ) lay on the line The risk of investment refers to the variability of its rate of return. A simple measure of dispersion is the range of values, which is simply the battle between the highest and the lowest values. Figure 1. 2 Relationship between evaluate Return and happen Figure 1. 2 shows the kin between pass judgment return and risk. From this figure it is clear that with higher risk the returns also increases duration it decrease as the risk decreases. High variance indicates high leg of risk and low variance indicates lesser risk. Expected returns increases when investors is spontaneous to take risk. Other measures normally used in finance are as follows ?Variance This is the mean of the lames of deviations of singular returns around their come values ? commonplace deviation This is the substantive root of variance ? Beta This reflects how volatile the return from an investment is, in response to market swings. ? Risk = Actual Return Expected Returns If, Actual Return = Expected Return = Risk bountiful Investment If, Actual Return or Expected Return is risky inve stment c) Marketability An investment is highly marketable or liquid if ? ? ? It can be transacted quickly The transaction cost is low and The price change between two successive proceeding is negligible. The liquidity of a market may be judged in terms of its depth, breadth, and resilience.Depth refers to the existence of buy as well as sells orders around the current market price. Breadth implies the heading of such orders in substantial volume. Resilience means that new orders emerge in response to price changes. Generally, equity shares of well established companies enjoy high marketability and equity shares of small companies in their formative years have low marketability. High marketability is a desirable characteristic and low marketability is an inapplicable one. d) Tax Shelter Tax benefits are of the following three kinds ? ? ? Initial Tax Benefit An initial tax benefit refers to the tax embossment enjoyed at the time of making the investment.Continuing Tax Benefit A g o along tax benefits represent the tax shield associated with the period of timeic returns from the investment. Terminal Tax Benefits A terminal tax benefit refers to relief from taxation when an investment is make waterd or liquidated. e) Convenience Convenience broadly refers to the ease with which the investment can be do and looked after. The peak of convenience associated with investments varies astray. At one end of the spectrum is the deposit in a savings bank account that can be made pronto and that does not require any maintenance effort. At the other end of the spectrum is the purchase of a property that may involved a lot of procedural and legal hassles at the time of acquisitions and a great deal of maintenance effort subsequently. 1. APPROACHES TO INVESTMENT DECISION MAKING The stock market is thronged by investors prose veere diverse investment strategies which may be subsumed under four broad approaches i. Fundamental Approach The basic tenets of the fundamental approach, which is perhaps most commonly advocated by investment professionals, are as follows ? There is an intrinsic value of a security, which depends upon underlying economic (fundamental) factors. The intrinsic value can be established by a penetrating analysis of the fundamental factors relating to the company, industry, and economy. ? At any given point of time, there are some securities for which the alive market price will differ from the intrinsic value.Sooner or later, of course, the market price will fall in line with the intrinsic value. ? high-performance returns can be earned by buying under-valued securities (securities whose intrinsic value exceeds the market price) and marketing over-valued securities (securities whose intrinsic value is less than the market price). ii. mental Approach The psychological approach is based on the acquaint that stock prices are guided by emotion rather than reason. old-hat prices are believed to be square offd by the psychologi cal mood of investors. When greed and euphoria chimneysweep the market, prices rise to dizzy heights. On the other hand, when fear and despair confine the market, prices fall to abysmally low directs.Since psychic values appear to be more important than intrinsic values, the psychological approach draw outs that it is more paying to analyze how investors track down to behave as the market is swept by waves of optimism and pessimism, which seem to alternate. The psychological approach has been described vividly as the castles in the air opening Burton G. Malkiel. Those who subscribe to the psychological approach or the castles in the air theory generally use some form of adept analysis which is concerned with a hit the books of internal market info, with a view to developing trading rules aimed at profit making. The basic premise of technical analysis is that there are certain persistent and go on chassiss of price movements, which can be discerned by analyzing market dat a. expert analysts use a variety of tools like bar chart, point and figure chart, moving average analysis, breadth of market analysis, etc. iii. Academic Approach Over the last five decades or so, the academic community has studied various aspects of the capital market, particularly in the advanced countries, with the help of fairly sophisticated methods of investigation. ? Stock markets are reasonably efficient in reacting quickly and rationally to the flow of data. Hence, stock prices reflect intrinsic value fairly well. Put differently, Market price = Intrinsic value ? Stock price behavior corresponds to a random walk. This means that successive price changes are in hooked. As a result, past price behaviour cannot be used to predict future price behaviour. ?In the capital market, there is a positive family human race between risk and return. More specifically, the expected return from a security is li go only cerebrate to its organized risk iv. Eclectic Approach The eclect icist approach draws on all the three different approaches discussed above. The basic expound of the eclectic approach are as follows ? Fundamental analysis is accommodating in establishing basic standards and benchmarks. However, since there are uncertainties associated with fundamental analysis, exclusive credence on fundamental analysis should be avoided. Equally important, unreasonable conclusion and complexity in fundamental analysis must be viewed with caution. Technical analysis is useful in broadly gauging the prevailing mood of investors and the sexual relation strengths of supply and demand forces. However, since the mood of investors can vary unpredictably excessive reliance on technical indicators can be hazardous. More important, involved technical systems should ordinarily be regarded as suspect because they often represent figments of imagination rather than tools of proven usefulness. ? The market is neither as well-ordered as the academic approach suggest, nor as speculative as the psychological approach indicates. While it is characterized by some inefficiencies and imperfection, it seems to react reasonably efficiently and rationally to the flow of culture.Likewise, despite many instances of mispriced securities, there appears to be a fairly strong correlation between risk and return. ? Level of return often necessitates the assumption of a higher level of risk. 1. 7 special K ERRORS IN INVESTMENT MANAGEMENT Investments always do not generate wealth sometimes it fail do so because of some conditions. The reason for this failure is either the market condition or some mistakes made by the investors. We cannot control market condition but errors made by investors could be avoided. Investors appear to be prone to the errors in managing their investments. Some of the errors made by investors are discussed below 1. 7. Inadequate Comprehension of Return and Risk Many investors have unrealistic and exaggerated expectations from investments, in particular from equity shares and convertible debentures. One often comes crossways investors who say that they hope to earn a return of 25 to 30 percent per year with approximately no risk exposure or even double their investment in a year or so. They have apparently been misled by one or more of the following (a) tall and unjustified claims made by people with vested interests (b) Exceptional performance of some portfolio they have seen or managed, which may be attributable mostly to fortuitous factors and (c) Promises made by tipsters, operators, and others. In most of the cases, such expectations reflect investor inexperience and gullibility. 1. 7. Vaguely formulate Investment Policy Often investors do not clearly charm out their risk disposition and investment policy. This tends to create confusion and impairs the calibre of investment decisions. Ironically, conservative investors turn aggressive when the bull market is near its peak in the hope of reaping a bonanza to a fault, in the charge up of sharp losings inflicted by a bear market, aggressive investors turn unduly cautions and overlook opportunities before them. Ragnar D. Naess put it this way The fear of losing capital when prices are low and declining, and the greed for more capital gains when prices are rising, are probably, more than any other factors, responsible for poor performance. if you know what your risk attitude is and why you are investing, you will learn how to invest well. A well articulated investment policy, adhered to consistently over a period of time, saves a great deal of disappointment. 1. 7. 3 Naive Extrapolation of the Past Investors generally believe in a simple extrapolation of past trends and events and do not in effect(p)ly incorporate changes into expectations. As Arthur Zeikel says People generally, and investors particularly, fail to appreciate the operative of countervailing forces change and momentum are largely mis still concepts. Most investors tend t o cling to the course to which they are currently committed, in particular at bout point. The apparent comfort provided by extrapolating too far, however, is dangerous. As Peter Bernstein says pulse causes things to run make headway and longer than we anticipate. They very familiarity of a force in motion reduces our ability to see when it is losing its momentum. Indeed, that is why extrapolating the present into the future so frequently turns out to be the genesis of an embarrassing forecast. 1. 7. 4 casual Decision Making Investment decision making is characterized by a great deal of cursoriness. Investors tend to ? ? ? Base their decisions on partial evidence, perfidious hearsay, or casual tips given by brokers, friends, and others.Cavalierly brush aside several of investment risk (market risk, bank line risk, and interest rate risk) as greed overpowers them. Uncritically follow others because of the temptation to ride the bandwagon or lack of assertion in their own judg ment. 1. 7. 5 Untimely entries and exits Investors tend to follow an incoherent start and stop approach to the market characterized by untimely entries (after a market advance has long been underway) and exit (after a long period of stagnation and decline). 1. 7. 6 High costs Investors trade excessively and spend a lot on investment management. A good proportion of investors indulge in day trading in the hope of making quick cabbage.However more often transaction cost wipes out some(prenominal) profits they may generate from frequent trading. 1. 7. 7 Over-Diversification and Under-Diversification Many individuals have portfolios consisting of thirty to sixty, or even more, different stocks. Managing such portfolios is an unwieldy parturiency and as R. J. Jenrette put it Overdiversification is probably the greatest enemy of portfolio performance. Most of the portfolios we look at have too many names. As a result, the stupor of a good idea is negligible. Perhaps as common as ove r-diversification is under-diversification. Many individuals do not apparently understand the principle of diversification and its benefit in term of risk reduction.A number of individual portfolios seem to be highly under-diversified, carrying an avoidable risk exposure. 1. 7. 8 Wrong attitude towards Losses and Profits An investor has an aversion to admit his mistake and cut losses short. If the price falls, contrary to his expectation at the time of purchase, he somehow hopes that it will rebound and he can break even. Surprisingly, such a belief persists even when the prospects look dismal and there may be a greater possibility of a further decline. If the price recovers collectable to favourable conditions, there is a tendency to dispose of the share when its price more or less equals the original purchase price, even though there may be a fair chance of further increases.The psychological relief experienced by an investor from recovering losses seems to trigger off such be haviour. This means the tendency is to let the losses run and cut profits short, rather than to cut the losses short and let the profits run. 1. 8 RISKS IN INVESTMENT Risk is uncertainty of the income /capital appreciation or loss or both. Every investment (equity, debt, property, etc. ) carries an division of risk that is unique to it. Though risk cannot be totally eliminated, it can be managed by underpickings effective risk management. To manage risk, one first need to identify different kinds of risks involved in investing and then take appropriate steps to reduce it.Risk and return share a direct relationship with one another. Therefore, an investment which carries negligible risk, will offer a low return (viz. bonds issued by the Reserve Bank of India) while an investment which carries a higher risk, also offers the emf of higher returns (stocks). All investments are a trade off between risk and returns. Let us first discuss the types of risks. 1. 8. 1 Types of Risks All inv estments carry their unique set of risks. Though there are several types of risks, the important ones are market risk, conviction risk, interest rate risk, inflation risk, up-to-dateness risk and liquidity risk. These are briefly explained below ) Market Risk A share may rise or fall depending on the fortunes of the company, the industry it is in, or in response to investor sentiment. b) Credit Risk This risk is attributed to debt investments wherein the borrower may default on interest and/or principal repayment. c) refer Rate Risk When interest rates rise, fixed income investments lose value. This is because the investor will continue to earn the same (lower) interest rate until the investment matures while market interest rates have already gone up. In order to compensate for a lower interest rate compared to the market rate, the fixed income investment will thus have to be priced at a lower rate. ) Inflation Risk Rising inflation will erode the value of your income and asset . Due to inflation, the cost of products and services will rise and consequently, your future income and assets will be cost less than what they are worth today. e) Currency Risk Changes in exchange rates between currencies could lead to decline in value of your investments. With Indian investors now being allowed to invest in other countries, you will now be exposed to specie risk i. e. a fall in the value of the currency in which you are investing vis-a-vis your home currency i. e. the Rupee. f) Liquidity Risk Certain investments carry the risk of poor liquidity either callable to the nature of the asset or restrictive reasons.For example, property is inherently an illiquid investment as it cannot be sold as simply as selling stocks. Certain investments like the Reserve Bank of India bonds are not transferrable till maturity. Investments in Equity Linked Savings Schemes are illiquid for a period of 3 years and in case you redeem from such schemes, your tax benefit is withdraw n. 1. 8. 2 Risk Management Once different kinds of risks associated with investments are identified appropriate steps can be taken to reduce these risks. Some of these steps are a) Diversification Most types of risks can be managed by diversifying your investments across asset classes (stocks, bonds, properties etc. ), industry, currencies etc.Diversification spreads the risk and reduces the obstinate impact that any one investment might have on a portfolio. b) look for and Monitor Rigorous research and continuous monitor will help in controlling the market and credit risk of your investments. This will caution beforehand to avoid an investment and alert in case the risk is increasing on an investment already undertaken. 1. 8. 3 Risk Tolerance Level Risk embarrasss the possibility of losing money. However, extra considerations should be made in addition to the safety of the principal and the potential for growth. These considerations include the likelihood of achieving the finan cial goals you have established.Additionally, one should consider whether he/she is willing and able to accept a higher level of risk in order to achieve further rewards. Before starting on the picture of the investment portfolio, every investor should establish his/her risk permissiveness level. Only after this he/she is ready to build strategies for the accomplishment of his/her financial goals. The higher the degree of risk involved in the investment portfolio the greater the chances of higher returns and failures. The prospect of the risk valuation reserve level is very subjective issue. However, younger investors can afford more risk taking since they have more time to fix the losses. On the other hand older investors should apply more conservative approach since they have less time in antecedent of them.But, they should keep in mind that they greatly decrease their chances of faster achieving their financial goals. A portfolio that carries more bonds is considered more co nservative and risk averse. However, the one that includes a greater percentage of stocks is more risk taking with higher potential of rewards. Many financial experts recommend the diversification between investments with different degrees of risk. This is a good idea since your portfolio will benefit from the rises and falls of the different investments and will alleviate the potential of losing money. Risk Personalities Based on the risk mental ability and risk tolerance, risk appetite can be decided. This is the level of risk that one is ready to bear.Broadly risk personalities can be categorised at 3 levels fusty, Balanced and offensive. Each risk constitution has a different objective which it aims to achieve through the investment portfolio. These personalities are explained below ? ? ? Conservative personality For investors having this personality preservation of the capital invested is the ultimate goal, even if it means compromising on the returns. Balanced personality People with this type of personality wish to strike a balance between high-risk and low-risk investments. Aggressive personality Investors with such personality do not wish to via media at all on the returns, even if their capital erodes. 2. 1 INTRODUCTIONIndian investor today have to endure a slow-moving economy, the steep market declines prompted by declining revenues, alarming make knows of scandals ranging from illegal corporate accounting practices like that of Satyam to insider trading to make investment decisions. Stock markets performance is not simply the result of intelligible characteristics but also due to the emotions that are suave baffling to the analysts. Despite loads of development coming from all directions, it is not the calculations of financial wizards, or companys performance or widely accepted criterion of stock performance but the investors nonrational emotions like overconfidence, fear, risk aversion, etc. seem to decisively drive and govern the fortu nes of the market. The market is so volatile that its behaviour is unpredictable. In the past distich of years, the movement of share prices exceeded all the limits and had gone remarkably low and high levels. These dramatic prices of the shares ruin the concept of intrinsic value and rational investment behaviour. The traditional finance theories assume that investors are rational but they are unable to explain the behaviour and pricing of the stock market completely. Many research studies have validated the relationship between a dependent variable i. e. , risk tolerance level and independent variables such as demographic characteristics of an investor.Most of the Indian investors are from high income group, well educated, salaried, and independent in making investment decisions and from the past trends it is also seen that they are conservative in nature. Television is the media that is largely influencing the investors decisions. Hence, in the present project report an attempt has been made to check the relationship between risk tolerance level and demographic characteristics of Indian investors. 2. 2 STATEMENT OF THE PROBLEM This orbit on investors behaviour is an attempt to know the profile and the characteristics of the investors so as to understand their preference with respect to their investments. The main focus of the study is to discover the influence of demographic factors like gender and age on risk tolerance level of the investor.The study mainly concentrates on the factors that influence an individual investor before making an investment. It also studies the various patterns in which investors like to invest their money based on their risk tolerance level and other demographic factors like income level, occupation etc. 2. 3 recapitulation OF LITERATURE The literature review section examines the importance of research studies, company data or industry reports that serve as a excogitation for the setup of study. The research dimension of the related literature and the relevant selective tuition begins from an explanatory perspective, approaching towards specific studies which do related to judge the limitations and informational gaps in data from the secondary sources.This analysis may reveal conclusions from past studies to realize the reliability of the secondary sources and their credibility. This in turn enables one to rely on a comprehensive review for the study. Literature suggests that major research in the area of investors behaviour has been done by behavioural scientists such as Weber (1999), Shiller (2000) and Shefrin (2000). Shiller (2000) who strongly advocated that stock market is governed by the market information which directly affects the behaviour of the investors. Several studies have brought out the relationship between the demographics such as Gender, Age and risk tolerance level of individuals. Of this the relationship between Age and risk tolerance level has attracted much attention.Horvath and Zuckerman (1993) suggested that ones biological, demographic and socioeconomic characteristics together with his/her psychological make-up affects ones risk tolerance level. Malkiel (1996) suggested that an individuals risk tolerance is related to his/her household situation, breedingcycle stage and subjective factors. Mittra (1995) discussed factors that were related to individuals risk tolerance, which included years until retirement, knowledge sophistication, income and net worth. Guiso, Jappelli and Terlizzese (1996), Bajtelsmit and VenDerhei (1997), Powell and Ansic (1997), Jianakoplos and Bernasek (1998), Hariharan, Chapman and Domain (2000), Hartog, Ferrer-I-Carbonell and Jonker (2002) concluded that males are more risk tolerant than females.Wallach and Kogan (1961) were perhaps the first to study the relationship between risk tolerance and age. Cohn, Lewellen et. al put in risky asset fraction of the portfolio to be positively agree with income and age and negatively co rrelated with marital status. Morin and Suarez found evidence of increasing risk aversion with age although the households appear to become less risk averse as their wealth increases. Yoo (1994) found that the change in the risky asset holdings were not uniform. He found individuals to increase their investments in risky assets throughout their working life time, and decrease their risk exposure once they retire. Lewellen et. l while identifying the systematic patterns of investment behaviour exhibited by individuals found age and expressed risk taking propensities to be inversely related with major shifts taking place at age 55 and beyond. Indian studies on individual investors were mostly confined to studies on share ownership, except a few. The RBIs opinion of ownership of shares and L. C. Guptas enquiry into the ownership pattern of Industrial shares in India were a few in this direction. The NCAERs studies brought out the frequent form of savings of individuals and the compone nts of financial investments of rural households. The Indian Shareowners Survey brought out a volley of information on shareowners.Rajarajan V (1997, 1998, 2000 and 2003) classified investors on the basis of their demographics. He has also brought out the investors characteristics on the basis of their investment size. He found that the percentage of risky assets to total financial investments had declined as the investor moves up through various stages in life cycle. Also investors lifestyles based characteristics has been identified. The above discussion presents a detailed picture about the various facets of risk studies that have taken place in the past. In the present study, the findings of many of these studies are verified and updated. Latha Krishnan (2006) explained as Investments come in many forms.While some people consider hard assets such as land, house, gold and platinum as investments, others look to monetary instruments such as stocks and bonds as ways to make their money grow. A cautious or conservative investor is flimsy to play carelessly with his hard-earned money. So he keeps to safe investments that guarantee the return of his capital and still earn good returns in a stipulated period if the product in which he invested gains in that period. In such an investment, even if the markets go down and he does not gain much, he also does not suffer a heavy loss. A wealthy person with more money to invest can take more risks and invest in a variety of products that major financial players provide.A wealth of information on these as well as comments and criticisms on their performances and profitability is readily available. Perception of investors towards capital market instruments globally by John marshall and Investment analysis and Portfolio management by Punithavathy Pandian. John Marshalls study was at global scale and it explains the perception of people across globe towards capital market instruments and Pandian explains the theoretical aspects of capital market instruments and use of various investment avenues to build a strong portfolio. 2. 4 NEED FOR STUDY Investing money is a crucial and deciding the avenues where to invest needs a lot of planning. In India people are more conservative and hence prefer investments that are less risky.Similarly there are other demographic factors like age, income level, gender which affect their decision. As the accessibility of financial products increase, perception of investors towards such avenues changes over a period of time. It becomes important for a marketer to understand the perception of investors towards investment avenues to successfully careen the product. Marketing is cognise as meeting needs profitably. If the marketer is able to understand the mindset of investor towards a product then he/she will be in a position to market the product. This report attempts to study the behavior of Indian investors while making an investment. Here we also look upon other fact ors that influence them while making investment decisions.Innovations in financial products like derivatives, unit linked insurance products, fund of funds likewise are not easily understood by the investor. Hence the need for this study arises to understand what exactly an Indian investor thinks before investing his/her money and how much risk he/she is willing to take. This report gives the marketer and other peers to successfully market the financial products which are more popular, as it gives information regarding the perception of investors towards investment avenues in India. 2. 5 OBJECTIVES OF THE STUDY 2. 5. 1 native Objectives ? ? ? ? ? ? ? To study the investment characteristics of investors To study the objectives of investment plan of an investors To study the demographic information of investors 2. 5. alternate Objectives To know the preferred investment avenues of investors To identify the preferred sources of information influencing investment decisions To understa nd the risk tolerance level of the investors and suggest a suitable portfolio To study the dependence/independences of the demographic factors (Gender, Age, income level) of the investor and his/her risk tolerance level 2. 6 SCOPE OF STUDY Based on precedent research in related areas, a questionnaire was constructed to measure the investment pattern of individuals on the basis of demographic characteristics and the risk tolerance of investors was also calculated. It helped us to understand how an Indian investor behaves while investing.This study will be adjuvant to mutual fund companies and other investment companies to understand individual behaviour of investors so that they could build suitable investment options for them individually. Also this study will help the investor to decide the areas where they could invest. 2. 7 HYPOTHESIS A hypothesis describes the relationship between or among variables. A good hypothesis is one that can explain what it claims to explain, is testa ble and has greater range, probability and simplicity than its rivals. There are two approach of hypothesis testing 1) Classical or sampling theory statistics and 2) The Bayesian approach In the present dissertation chi square test has been used to find out the dependence/independence of various factors that influence investment decision.Hypothesis has been found between following factors ? ? ? ? ? Gender and risk tolerance of respondents Age and preferred investment avenues by the respondents Income and investment avenues preferred by the respondents Age of respondents and time horizon for investment Age and risk tolerance of the respondents 2. 8 RESEARCH DESIGN Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. ? Research type Many investors were reluctant to reveal their investment details especially the amount of money invested so, referral sampling method is used for this study. Sample rendering The essay was drawn from the population of the potential investors from Tamil Nadu. A succeed was conducted to understand the investors behaviour with the help of questionnaire. It was carried out with a sample size of 100 investors. 2. 9 TOOLS FOR DATA COLLECTION Primary data The data has been collected directly from respondent with the help of structured questionnaires. Secondary data The secondary data has been collected from various magazines, journals, newsworthinesspapers, text books and related websites. 2. 10 METHOD OF ANALYSIS Statistical techniques like Chi square test, simple percentage method are used to analyze and watch raw data. Chi square was used to show the dependency/ independence of various factors.After collecting the data its variable having defined character, it was tabulated and analyzed with the help of charts and graphs in Microsoft Excel 2007. 2. 11 LIMITATIONS OF STUDY Sample size is small because of the time constraint R espondent may be hesitant to provide their investment details Behaviour of investors doesnt remain same for long time Time for the study is limited 3. 1 INDIAN monetary MARKET Money always flows from surplus sector to deficit sector. That means persons having excess of money lend it to those who need money to fulfil their requirement. Similarly, in backup sectors the surplus money flows from the investors or lenders to the businessmen for the purpose of issue or sale of goods and services.So, we find two different groups, one who invest money or lend money and the others, who borrow or use the money. The financial markets act as a link between these two different groups. It facilitates this function by acting as an intermediary between the borrowers and lenders of money. So, financial market may be defined as a transmission instrument between investors (or lenders) and the borrowers (or users) through which transfer of funds is facilitated. It consists of individual investors, f inancial institutions and other intermediaries who are linked by a dress trading rules and communication network for trading the various financial assets and credit instruments.fiscal market talks about the principal(a) feather market, FDIs, alternative investment options, banking and insurance and the pension sectors, asset management segment as well. India Financial market happens to be one of the oldest across the globe and is the fastest growing and best among all the financial markets of the emerging economies. The history of Indian capital markets spans back 200 years, around the end of the 18th century. It was at this time that India was under the rule of the East India Company. The capital market of India initially developed around Mumbai with around 200 to 250 securities brokers participating in active trade during the second half of the nineteenth century. 3. 1. Scope of Indian Financial Market The financial market in India at present is more advanced than many other se ctors as it became organized as early as the 19th century with the securities exchanges in Mumbai, Ahmedabad and Kolkata. In the early 1960s, the number of securities exchanges in India became eight including Mumbai, Ahmedabad and Kolkata. Apart from these three exchanges, there was the Madras, Kanpur, Delhi, Bangalore and Pune exchanges as well. Today there are 23 regional securities exchanges in India. The Indian stock markets till date have remained stagnant due to the rigid economic controls. It was only in 1991, after the liberalization process that the India securities market witnessed a flurry of IPOs serially. The market saw many new companies spanning across different industry segments and business began to flourish.The launch of the NSE (National Stock Exchange) and the OTCEI (Over the Counter Exchange of India) in the mid nineties helped in regulating a smooth and transparent form of securities trading. The regulatory body for the Indian capital markets was the SEBI (Se curities and Exchange Board of India). The capital markets in India experienced turbulence after which the SEBI came into prominence. The market loopholes had to be bridged by taking drastic measures. 3. 1. 2 Potential of Indian Financial Market India Financial Market helps in promoting the savings of the economy helping to adopt an effective channel to transmit various financial policies.The Indian financial sector is welldeveloped, competitive, efficient and integrated to face all shocks. In the India financial market there are various types of financial products whose prices are determined by the numerous buyers and sellers in the market. The other determinant factor of the prices of the financial products is the market forces of demand and supply. The various other types of Indian markets help in the public presentation of the wide India financial sector. 3. 1. 3 Features of Indian Financial Market ? ? India Financial Indices BSE 30 Index, various sector indexes, stock quotes , Sensex charts, bond prices, external exchange, Rupee &038 Dollar Chart Indian Financial market news ?Stock News Bombay Stock Exchange, BSE Sensex 30 index, S&038P CNX-Nifty, company information, issues on market capitalization, corporate earnings statements ? Fixed Income corporeal Bond Prices, Corporate Debt details, Debt trading activities, Interest Rates, Money Market, Government Securities, Public Sector Debt, External Debt Service ? ? ? ? ? ? ? ? Foreign Investment Foreign Debt Database smooth by BIS, IMF, OECD,&038 World Bank, Investments in India &038 Abroad spherical Equity Indexes Dow Jones world(prenominal) indexes, Morgan Stanley Equity Indexes Currency Indexes FX &038 Gold Chart Plotter, J. P. Morgan Currency Indexes National and Global Market Relations Mutual Funds Insurance Loans Forex and Bullion The main functions of financial market are ? ? ? It provides facilities for interaction between the investors and the borrowers. It provides pricing information r esulting from the interaction between buyers and sellers in the market when they trade the financial assets. It provides security to dealings in financial assets. It ensures liquidity by providing a mechanism for an investor to sell the financial assets. It ensures low cost of transactions and information. 3. 2 categorization OF FINANCIAL MARKETS Figure 3. 1 Classification of financial markets Source Investment analysis and portfolio management Author Prasanna Chandra Figure 3. 1 shows the classification of financial markets.From this figure we can interpret that there are different ways of sort outing financial market. ? One is to classify financial market by the type of financial claim. The debt market is the financial market foe fixed claims (debt instrument) and the equity market is the financial market for residual claims (equity instruments) ? The second way is to classify financial markets by the maturity of claims. The market for short term financial claims is referred to as the money market and the market for long term financial claims is referred to as the capital market. ? The third way to classify financial markets is based on whether the claims represent new issues or keen issues.The market where issues sell new claims is referred as primordial market and the market where issues sell outstanding claims is referred as secondary market. ? The fourth way to classify financial markets is by the timing of delivery. A cash or spot market is one where the delivery occurs immediately and forward or futures markets are those markets where the delivery occurs at a pre determined time in future. ? The fifth way to classify financial markets is by the nature of its organizational structure. An exchange traded market is characterized by a centralized organization with standardized social occasions and an over the counter market is a decentralized market with customized procedures.These markets are further explained in detail. 3. 3 MONEY MARKET The money market is a market for short-term funds, which deals in financial assets whose period of maturity is up to one year. It should be noted that money market does not deal in cash or money as such but simply provides a market for credit instruments such as bills of exchange, promissory notes, commercial paper, treasury bills, etc. These financial instruments are close substitute of money. These instruments help the business units, other organizations and the Government to borrow the funds to meet their short-term requirement. Money market does not imply to any specific market place.Rather it refers to the entire networks of financial institutions dealing in short-term funds, which provides an outlet to lenders and a source of supply for such funds to borrowers. Most of the money market transactions are taken place on telephone, fax or Internet. The Indian money market consists of Reserve Bank of India, Commercial banks, Co-operative banks, and other alter financial institutions. The R eserve Bank of India is the leader of the money market in India. Some Non-Banking Financial Companies (NBFCs) and financial institutions like LIC, GIC, UTI, etc. also get in the Indian money market. 3. 4 CAPITAL MARKET Capital Market may be defined as a market dealing in medium and long-term funds.It is an institutional arrangement for borrowing medium and long-term funds and which provides facilities for marketing and trading of securities. So it constitutes all long-term borrowings from banks and financial institutions, borrowings from foreign markets and raising of capital by issue various securities such as shares debentures, bonds, etc. The market where securities are traded known as Securities market. It consists of two different segments namely primary and secondary market. The primary market deals with new or fair issue of securities and is, therefore, also known as new issue market whereas the secondary market provides a place for purchase and sale of existing securities and is often termed as stock market or stock exchange. 3. 4. PRIMARY MARKET The Primary Market consists of arrangements, which facilitate the procurement of longterm funds by companies by making fresh issue of shares and debentures. You know that companies make fresh issue of shares and/or debentures at their formation stage and, if necessary, subsequently for the expansion of business. It is usually done through private placement to friends, relatives and financial institutions or by making public issue. In any case, the companies have to follow a well-established legal procedure and involve a number of intermediaries such as underwriters, brokers, etc. who form an integral part of the primary market.You must have learnt about many initial public offers (IPOs) made recently by a number of public sector undertakings such as ONGC, GAIL, NTPC and the private sector companies like Tata Consultancy Services (TCS), Biocon, Jet-Airways and so on. 3. 4. 2 SECONDARY MARKET The secondary mar ket known as stock market or stock exchange plays an equally important role in mobilizing long-term funds by providing the necessary liquidity to holdings in shares and debentures. It provides a place where these securities can be encashed without any difficulty and delay. It is an organized market where shares and debentures are traded regularly with high degree of transparency and security.In fact, an active secondary market facilitates the growth of primary market as the investors in the primary market are assured of a continuous market for liquidity of their holdings. The major players in the primary market are merchant bankers, mutual funds, financial institutions, and the individual investors and in the secondary market you have all these and t