1. PROJECT REPORT
ON
A study on various investment opportunities
And investment pattern of salaried people
A project report submitted in partial fulfillment of the requirement for the degree of
MASTERS OF BUSINESS ADMINISTRATION
(2012-2014)
PROJECT GUIDE: SUBMITTED BY:
Prof.Kiranjitkaur NavjeetKaur
Roll no:………………
Cordia institute of business management,
Sanghol , ( Punjabi university Patiala)

2. CERTIFICATE
This is certify that the Final Project report entitled “A STUDY ON VARIOUS INVESTMENT
OPPORTUNITIES AND INVETSMENT PATTERN OF SALARIED PEOPLE” Submitted
in partial fulfillment of the requirement for the degree of MBA ( Semester 4TH
) affiliated to the
Punjabi University, Patiala is a research work carried out by NAVJEET KAUR under my
supervision and guidance.
PROF. KIRANJIT KAUR
(Project Guide)

3. DECLARATION
I Navjeet Kaur, student of cordial institute of Business management,hereby declare that the
project entitled “ a study of various investment opportunities and investment pattern of
salaried people” is an original work and the same has not been submitted to any other institute
for the award of any degree.
NAVJEET KAUR

4. ACKNOWLEDGEMENT
In this present world of competition there is a race of existence in which those who are having
will to come forward will succeed. Project is a bridge between practical and theoretical working ,
with this will I have joined the project . I really wish to express my gratitude towards all those
people who have helped me.
I really indebted to PROF. KIRANJIT KAUR faculty M.B.A. department cordial institute of
business management for this kind hearted approach. Her timely guidance, supervision &
encouragement have helped me to get this golden opportunity.
My project guide provided me her expert advice, inspiration& moral support in spite of her busy
schedule & assignments, has mainly provided my understanding of this project. I am very
grateful to her kind hearted approach & encouragement, which helped me immensely in
completion of this project report.
Last , but not the least, I say only this much that all are not to be mentioned but none is forgotten
and I will like to extend my special thanks and gratitude to my parents who always encourage me
in pursuit of excellence.
(NAVJEET KAUR)

5. CHAPTER 1
INTRODUCTION TO INVESTMENT & ITS
ALTERNATIVES

6. 1.1 INTRODUCTION TO INVESTMENT
In the present day financial markets. Investing money has become a very complex task. Most of
the investors are unaware of the fact that investing is both an art and a science. Majority of
people irrespective of their education, status, occupation etc, are fascinated by investments.
Investment is an economic activity in which every person is engaged in one form or another.
Even though the basic objective of making investment is earning profits, not everybody who
makes investment benefits from it. Those who incur losses have not managed their funds
scientifically and have just followed others blindly. All investments are risky to some degree or
other as risk and return go together. The art of investment is to see that the return is maximized
with the minimum degree of risk.
Investment is the process of, ‘sacrificing something now for the prospect of gaining something
later’. Our definition implies that there are three dimensions to an investment- time which
involves creation of assets or exchange of assets with profit motive. it is the employment of
funds with the purpose of earning additional income or growth in value. The person making
investment has to part with his funds. the funds may be converted into monetary assets or a claim
on future money for a return. This return is an award for abstaining from present consumption
for parting with the money or liquidity and for taking a risk. The risk may be about the return on
investment, time of waiting, cost of getting back funds, safety of funds, and variability of the
return.
“sacrifice of certain present value for some uncertain future value.”
-sharpe/Alexander
The developing countries like India face the enormous task of finding sufficient capital in their
development efforts. Most of these countries find it difficult to get out of the vicious circle of
poverty of low income, low saving, low investment, low employment etc. With high capital
output ratio, India needs very high rates of investments to make a leap forward in her efforts of
attaining high levels of growth. Since the beginning of planning, the emphasis was on investment
as the primary instruments of economic growth and increase in national income. In order to have
production as per target, investment was considered the crucial determinant and capital
formation had to be supported by appropriate volume of saving.

7. 1.2 INVESTMENT OPTIONS AVAILABLE
There are a large number of investment instruments available today. To make our lives easier we
would classify or group them. In India, numbers of investment avenues are available for the
investors. Some of them are marketable and liquid while others are non marketable and some of
them also highly risky while others are almost risk less. The people has to choose Proper Avenue
among them, depending upon his specific need, risk preference, and return expected Investment
avenues can broadly categories under the following heads.
1. Shares
2. FI Bonds
3. Corporate Debenture
4. Company Fixed
5. Bank Fixed
6. PPF
7. Life Insurance
8. Post Office-NSC
9. Gold/Sliver
10. Real Estate
11. Mutual Fund
12. Others
1.Shares:
A share is the interest of a shareholder in a definite portion of the capital. It expresses a proprietary
relationship between the company and the shareholder. A shareholder is the proportionate owner of the
company.
A share is the interest of a shareholder in a definite portion of the capital. It expresses a proprietary
relationship between the company and the shareholder. A shareholder is the proportionate owner of the
company but he does not own the company’s assets which belong to the company as a separate legal
entity. Section 2(46) defines a share as, “A share in the share capital of a company and includes stock

8. except where a distinction between stock and shares is expressed or implied”. An exhaustive definition of
share has been given by Farwell J. in Borland’s trustee v. steel bros. in the following words:
“A share is the interest of a shareholder in the company, measured by a sum of money, for the
purpose of liability in the first place, and of interest the second, but also consisting of a series of
mutual covenants entered into by all the shareholder inter se in accordance with the companies
act”. Thus a share
i) Measures the right of a shareholder to receive a certain proportion of the profits of the
company while it is a going concern and to contribute to the assets of the company when it is
being wound up; and
ii) Forms the basis of the mutual covenants contained in the articles binding the shareholders
inter se.
A share is a personal estate capable of being transferred in the manner laid down in the articles of
association. It is a movable property which can either be mortgaged or pledged. Share is included
in the definition of ‘good’ under the provisions of the sale of goods act, 1930. Every share issued
by a company under its common seal specified the shares held by any member. The share
certificate is the prima facie evidence of the title of the member to such shares. The share
certificate is not a negotiable instrument.
Types of shares:
According to section 86 of the companies act, a company can issue only two types of shares:
(a) Preference shares; and
(b) Equity shares.
 Equity shares:
All shares which are not preference shares are equity shares. Equity shareholders have the
residual rights of the company. They may get higher dividend than preference shareholders if the
company is prosperous or get nothing if the business of the company flops. In the winding up,
the equity shares are entitled to the entire surplus assets remaining after the payment of the
liabilities and the capital of the company; unless the articles confer right on the preference shares
a right to participate in the distribution of surplus assets.
 Preference shares:
A preference share must satisfy the following two conditions:
I) It shall carry a preferential right as to the payment of dividend at a fixed rate; and

9. II) In the event of winding up, there must be a preferential right to the repayment of the paid up
capital.
These are two dominant characteristics of preference shares. So preference share may or may not
carry such other right as:
(a) A preferential right to any arrears of dividend;
(b) A right to share in surplus profits by way of additional dividend;
(c) A right to be paid a fixed premium specified in the memorandum; and
(d) A right to share in surplus assets in the event of a winding up, after all kinds of capital have
been repaid.
1. Cumulative and non-cumulative preference shares:
With regard to the payment of dividend, preference shares may be cumulative or non-
cumulative. In the case of cumulative preference shares, if the profits of the company in any
years are not sufficient to pay the fixed dividend, on the preference shares the deficiency must be
made up out of the profits of subsequent years. The accumulated arrears of dividend must be
paid before anything is paid out of the profits to the holders of any other class of shares. In the
case of non-cumulative preference shares, the dividend is only payable out of the net profits of
each year. If there are no profits in any year, the arrears of dividend cannot be claimed in the
subsequent years. Preference shares are presumed to be cumulative unless expressly described as
non-cumulative. Any ambiguous language in the articles will not be enough to make them non-
cumulative.
2. Participating and Non-participating Preference Share:
Participating preference shares are those shares which are entitled, in addition to preference
dividend at a fixed rate, to participate in the balance of profits with the equity shareholders after
they get a fixed rate of dividend on their shares. The participating preference shares may also
have the right to share in the surplus assets of the company on its winding up. Such a right must
be expressly provided in the memorandum or the articles of association of the company.
Non-participating preference shares are entitled only to a fixed rate of dividend and do not share
in the surplus profits. The preference shares are presumed to be non-participating, unless
expressly provided in the memorandum or the articles or the terms of issue. A mere fact that the
articles of a company confer on the preference shareholders a right to participate with the equity

10. shareholders in the surplus profits does not necessarily mean that the preference shareholders are
entitled to participate in the surplus assets also.
3. Redeemable preference shares:
According to section 80, a company limited by shares, if so authorized by its articles, may issue
redeemable preference shares. Such shares may be redeemed either after a fixed period or earlier
at the option of the company. In the case of irredeemable shares, the capital is to be returned on
the winding up of the company. The redeemable preference shares can be redeemed, only subject
to the following conditions:
i) Such shares must be fully paid
ii) Such shares shall be redeemed out of distributable profits or out of the proceeds of a fresh
issue made for the purposes of redemption.
iii) Any premium to be paid on redemption of such shares must be paid out of profits or out of
the share premium account.
iv) Where shares are so redeemed out of profits, a sum equal to the nominal value of the shares
redeemed must be transferred to the ‘capital redemption reserve account’.
This amount shall be treated as capital of the company and the provisions as regards reduction of
capital shall apply. The amount credited to the account cannot be paid out to the shareholders as
dividend. But it can be used to pay up unissued shares to be issued as fully paid bonus shares.
Redemption of preference shares is not to be taken as reduction of the company’s authorized
share capital. Shares already issued cannot be converted into redeemable preference shares.
Where a company fails to comply with these provisions, the company and every officer of the
company who is in default shall be punishable with fine which may extend to Rs. 1,000.
Redemption of redeemable preference shares shall be notified to the registrar within one month
of redemption. Where redeemable preference shares have been issued, the balance sheet must
contain a statement specifying what part of the capital consists of such shares and the earliest
date on which the company has power to redeem the shares.
2.Debt:
Debt is a route that most people will know and have the necessary experience of.There is a
widerange of debt instruments that are present from bank fixed deposits tocompany fixed

11. deposits. Debt is simple as the investor ill earn at a fixed percentage of theinvestment, which will
then be returned to the investor at the time of maturity orredemption of the investment.
3.Mutual Funds:
This is an emerging area for investment and there is a large variety of schemes inthe market to
suit the requirements of a large number of people. In finance, in general,you can think of equity
as ownership in any asset after all debts associated with that assetare paid off. For example, a car
or house with no outstanding debt is considered theowner's equity because he or she can readily
sell the item for cash. Stocks are equitybecause they represent ownership in a company.
Advantages to invest in mutual funds:
 No large investment compulsory: Mutual funds allow you to make an investment, even if you
have a very small amount to invest. This advantage makes it more attractive among investors.
 Investing in a variety of instruments: Imagine ordering a thaali at your favorite restaurant
where you can eat a variety of different foods in one affordable package! Mutual funds also work
in a similar way. Mutual Funds invest in a wide range of securities. This diversification reduces
the risk by limiting the effect of a possible decline in the value of any one security. You achieve
this diversification through a Mutual Fund with far less money than you can do on your own.
 Convenience: You can invest directly with the fund house or through your financial advisor. You
get regular information on the value of your investments and portfolios of the schemes.
 Professional Management: Mutual fund investments are managed by experienced and skilled
professionals, who with the help of an investment research team, analyzes the performance &
prospects of companies and selects suitable investments to achieve the objective of the scheme.
 Easy access to your money In open-ended mutual funds, you can redeem all or part of your units
any time you wish. Some schemes do have a lock-in period where an investor cannot return the
units until the completion of such a lock-in period. With close-ended schemes, you can sell your
units on a stock exchange at the prevailing market price or avail of the facility of repurchase
through Mutual Funds at NAV related prices which some close-ended and interval schemes offer
you on maturity of scheme or periodically, as the case maybe.

12. 4.Corporate Debenture:
Corporate debentures are normally backed by the reputation and generalcreditworthiness of the
issuing company. It is a type of debt instrument that is notcovered by the security of physical
assets or collateral. Debentures are a method ofraising credit for the company and although the
money thus raised is considered a part ofthe company's capital structure, it is not part of the share
capital.
Security:
 Secured/Mortgage Debentures: Debentures secured against assets of the company .i.e.
if the company is winding up, assets will be sold and debenture holders will be paid back.
The charge/mortgage may be fixed or a floating charge. If it is fixed, charge is on a
specific asset say plant, machinery etc. If it is floating charge, it means it is on general
assets of the company.
 Which assets are charged: The ones available with the company presently and also assets
in future
 Mortgage deed: Includes nature/value of the security, date of interest payment, and rate
of interest, repayment terms, and rights of the debenture holders if the company defaults.
In the event of default of company to pay interest or principal installment, they can
recover their money via the assets mortgaged.
 Unsecured/Naked Debentures: Debentures not secured against assets of the company
.i.e. if the company is winding up, assets will be not be sold in order to pay the debenture
holders. In other words, no charge is created on the assets of the company which means
that there is no security of interest and principal payment. The creditworthiness and
soundness of the company serves as a security.
Tenure:

13.  Redeemable Debentures: Debentures which have to be repaid within a certain specified
period. Eg: 5% 2 years Rs. 1000 debenture means redeemable period is 2
years(5%:interest/coupon payment). After redemption, they can be reissued.
 Irredeemable/Perpetual Debentures: These can be paid back at any time during the life
of the company .i.e. there is no specified period for redemption. Hence they are also
called Perpetual Debentures. Nonetheless if the company has to wind up, then they have
to repay the debenture holders.
Registration:
 Registered Debentures: As the name suggested, these are debentures that are registered
with the company. It records all details of debenture holdings such as name, address,
particulars of holding etc. Interest shall be paid only to the registered holder (treated as a
non-negotiable instrument). They can be transferred by a transfer deed.
 Bearer Debentures: These can be transferred by mere delivery. Company does not hold
records for the debenture holder. Interest will be paid to the one who displays the interest
coupon attached to the debenture.
Coupon:
 Zero Coupon Debentures: Does not have a specified interest rate, thereby to
compensate, they are issued at a substantial discount. Interest: Difference in face value
and issue price.
 Specific Coupon rate Debentures: Debentures are normally issued with an interest rate
which is nothing but the coupon rate. It can be fixed or floating. Floating is associated
with the bank rates.
Convertibility:
 Convertible Debentures (Fully/ Partly convertible): Debentures which can be
converted to either equity shares or preference shares by the company or debenture
holders at a specified rate after a certain period. A company can also issue Partly
Convertible Debentures whereby only a part of the amount can be converted to
equity/preference shares.
 Non Convertible Debentures (NCDs): These can’t be converted into equity/preference
shares.
Advantages/Merits of Debenture Issue:
 It enables a company to raise funds for a specific period.
 No dilution of control as debenture holders don’t possess voting rights

14.  Debenture (debt) enables the company to Trade on equity. It can pay dividend to equity
shareholders at a rate higher than overall ROI.
 Debenture holders entitled to a fixed rate of interest. Eg: 10% debenture
 They enjoy priority over other unsecured creditors with respect to debt repayment.
 Suitable for conservative investors who seek steady ROI with little or no risk.
 Interest on debentures is treated as expense and is tax deductible.
 Company can adjust its gearing in accordance to its financial plan.
 Debenture holders are regarded as creditors of the company and they receive preference over
equity shareholders and preference share holders.
Disadvantages/Demerits of Debenture issue:
 They have a fixed maturity; hence provision has to be made for repayment.
 There is a limit to which funds can be raised through debentures.
 It is risky if the company fails to pay interest or principal installment on time, as debenture
holders can file petition for winding up the company.
 It is not suitable for a company with fluctuating earnings as it may also lead to fluctuations in
payment of dividend payable to equity shareholders.
 With more risk, you get more return. Debentures being secure investments, returns are less.
 Like ordinary shares, debenture holders will not be regarded as owners of the company and have
no voting rights.
5.Company Fixed Deposit:
Company fixed deposit is the deposit placed by investors with companies for afixed term
carrying a prescribed rate of interest. Company FDs are primarily meant forconservative
investors who don't wish to take the risk of vagaries of the stock market. Butexperts say the due
diligence that an investor should undertake is similar to that beforebuying shares. Getting lured
by the high interest rate alone is not advisable.
6.Fixed Deposits:
Fixed Deposits with Banks are also referred to as term deposits. Minimuminvestment period for
bank FDs is 30 days. Deposits in banks are very safe because of theregulations of RBI and the
guarantee provided by the deposit insurance corporation. Theinterest rate on fixed deposits varies
with term of the deposits Bank deposits enjoyexceptionally high liquidity. Loans can raised
against bank deposits.

15. 7.Post Office Savings:
Post Office Monthly Income Scheme is a low risk saving instrument, which can beavailed
through any Post Office The interest rate on deposits is slightly higher than banks.The interest is
calculated half yearly and paid yearly. There are various types of schemes provided by post
offices. These are:
Savings Account
 Any individual can open an account.
 Cheque facility available.
 Group Account, Institutional Account, other Accounts like Security Deposit account &
Official Capacity account are not permissible
 Rate of interest 4% per annum
Time Deposit Account
 Any individual (a single adult or two adults jointly) can open an account.
 Group Accounts, Institutional Accounts and Misc. account not permissible.
 Trust, Regimental Fund or Welfare Fund not permissible to invest.
 1 Year, 2 Year, 3 Year and 5 Year Time Deposit can be opened.
 In case of premature closure of 1 year, 2 Year, 3 Year or 5 Year account on or after
01.12.2011, if the deposit is withdrawn after 6 months but before the expiry of one year
from the date of deposit, simple interest at the rate applicable to from time to time to post
office savings account shall be payable.
 In case of premature closure of 2 year, 3 year or 5 year account on or after 01.12.2011, if
the deposit is withdrawn after the expiry of one year from the date of deposit, interest on
such deposits shall be calculated at the rate, which shall be one per cent less than the rate
specified for a period of deposit of 1 year, 2 year or 3 years as mentioned in the
concerned table given under Rule 7 of Post office Time Deposit Rules.
 Rate of interest - 8.20%, 8.20%, 8.30%, 8.40% compounded quarterly for 1,2,3 & 5 years TD
account respectively.
 The investment in the case of 5 years TD qualify for the benefit of Section 80C of the Income
Tax Act, 1961 from 1.4.2007.
Type of Account Minimum Deposit Maximum Deposit
1,2,3 & 5 Year TD INR.200/- and in multiples of INR.
200/- thereafter
No limit.
Recurring Deposit Account
 Any individual (a single adult or two adults jointly) can open an account.
 Advance Deposits earn rebate.
 Four defaults are allowed.
 Rate of interest 8.30%
 Maturity value of a 5 Years RD account opened on or after 1.4.2013 with monthly deposit of
INR.10/- shall be INR.744.53.
 Defaults can be paid within two months.
 Part withdrawal facility available.
 Premature closure allowed after three years.
 Pay Roll Savings Scheme is also available for employees of various Establishments.

16. Type of Account Minimum Deposit Maximum Deposit
Individual Account INR. 10/- and in multiples of INR.
5/- thereafter
No limit
Senior Citizen Savings Scheme (SCSS) Account
 A new avenue of investment and return for Senior Citizen.
 The account may be opened by an individual,
1. Who has attained age of 60 years or above on the date of opening of the account.
2. Who has attained the age 55 years or more but less than 60 years and has retired under a
Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme on the date of opening
of the account within three months from the date of retirement.
3. No age limit for the retired personnel of Defence services provided they fulfill other specified
conditions.
 The account may be opened in individual capacity or jointly with spouse.
 Non-resident Indians (NRIs) and Hindu Undivided Family (HUF) are not eligible to open an
account.
 The individual may open one or more account in the multiple of INR.1000/-, subject to a
maximum limit of INR.15 lakh.
 No withdrawal shall be permitted before the expiry of a period of five years from the date
of opening of the account. The depositor may extend the account for a further period of 3
years.
 Premature closure of account is permitted
1. After one year but before 2 years on deduction of 1 ½ % of the deposit.
2. After 2 years but before date of maturity on deduction of 1% of the deposit.
 Premature closure allowed after three years.
 In case of death of the depositor before maturity, the account shall be closed and deposit
refunded without any deduction along with interest.
 Interest @ 9.20% per annum from the date of deposit on quarterly basis. Interest can be
automatically credited to savings account provided both the accounts stand in the same
post office.
 Interest rounded off to the nearest multiple of rupee one.
 Post Maturity Interest at the rate applicable to the deposits under Post Office Savings
Accounts from time to time is admissible for the period beyond maturity.
 Nomination facility is available in the Scheme.
 The investment under this scheme qualify for the benefit of Section 80C of the Income Tax Act,
1961 from 1.4.2007.
Monthly Income Scheme (MIS) and Senior Citizen Saving Scheme (SCSS) are the best for
Senior Citizens who desire monthly/quarterly interest. Invest in MIS / SCSS and transfer interest
into RD account through SB account through written request and earn a combined interest of
10.5 % (approx.).
This is the safest investment option for the Senior Citizens.

17. 8.Life Insurance Policies:
Insurance companies offer many investment schemes to investors. These schemespromote saving
and additionally provide insurance cover. L1C is the largest life insurancecompany in India.
Some of its schemes include -
-Life policies,
-Convertible whole life assurance policy,
-Endowment assurance policy,
-Jeevan Saathi,
-Money back policy
-Unit linked plan
-Term assurance
-Immediate annuity
-Deferred annuity
-Riders etc.
Insurance policies, while catering to the risk compensation to be faced in thefuture by investor,
also have the advantage of earning a reasonable interest on theirinvestment insurance premiums.
9.Public Provident Fund (PPF):
A long term savings instrument with a maturity of 15 years. A PPF account can beopened
through a nationalized bank at anytime during the year and is open all throughthe year for
depositing money. Tax benefits can be availed for the amount invested andinterest accrued is
tax-free. A withdrawal is permissible every year from the seventhfinancial year of the date of
opening of the account.
Public Provident Fund Account
 Ideal investment option for both salaried as well as self employed classes.
 Non-Resident Indians (NRIs) are not eligible.
 Investment up to INR. 1,00,000 per annum qualifies for IT Rebate under section 80 C of IT Act.
 The rate of interest on the subscriptions made to the fund on or after 01.12.2011 and
balances at credit of the subscriber in the existing PPF account shall bear interest at the
rate of eight point seven per cent (8.70%) per annum.
 Loan facility available from 3rd financial year upto 5th financial year. The rate of interest
charged on loan taken by the subscriber of a PPF account on or after 01.12.2011 shall be

18. 2% p.a. However, the rate of interest of 1% p.a. shall continue to be charged on the loans
already taken or taken up to 30.11.2011.
 Withdrawal permitted from 6th financial year.
 Free from court attachment.
 An individual cannot invest on behalf of HUF (Hindu Undivided Family) or Association of
persons.
Type of Account Minimum limit Maximum limit
Public Provident Fund(Individual
account on his behalf or on behalf
of minor of whom he is the
guardian)
INR. 500/- in a financial year INR. 1,00,000/- in a financial year
10.Real Estate:
Investment in real estate also made when the expected returns are veryattractive. Buying
property is an equally strenuous investment decisions. Real estateinvestment is often linked with
the future development plans of the location. At presentinvestment in real assets is booming
there are various investment source are available forinvestment which are directly or indirectly
investing real estate. In addition to this, themore affluent investors are likely to be interested in
other type of real estate, likecommercial property, agricultural land, semi urban land, and resorts.
11.Gold/Sliver /Others:
The bullion offers investment opportunity in the form of gold, silver, art objects(paintings
,antiques), precious stones and other metals (precious objects), specificcategories of metals are
traded in the metal exchange.

19. CHAPTER 2
REVIEW OF LITERATURE

20. 2.1 REVIEW OF LITERATURE:
Behavioral finance is a new emerging science that studies the irrational behavior of the people.
Avinash Kumar Singh (2006) The study entitled "Investment Pattern of People" has been
undertaken with the objective, to analyze the investment pattern of people in Bangalore city and
Bhubaneswar analysis of the study was undertaken with the help of survey conducted .After
analysis and interpretation of data it is concluded that in Bangalore investors are more aware
about various investment avenues & the risk associated with that. All the age groups give more
important to invest in equity & except people those who are above 50 give important to
insurance, fixed deposits and tax saving benefits. Generally those investors who are invested in
equity, are personally follow the stock market frequently i.e. in daily basis. But those who are
invested in mutual funds are watch stock market weekly or fortnightly. In Bangalore, investors
are more aware about various investment avenues and the risk associated with that. But in
Bhubaneswar, investors are more conservative in nature and they prefer to invest in those
avenues where risk is less like bank deposits, small savings, post office savings etc.
Sudalaimuthu and senthilkumar (2008) Mutual fund is the one of investment avenues the
researcher research in this area about investors perception towards mutual fund investments has
been analyzed effectively taking into account the investors reference towards the mutual fund
sector, scheme type, purchase of mutual fund units, level of risks undertaken by investors, source
of information about the market value of the units, investors opinion on factors influenced to
invest in mutual funds, the investors satisfaction level towards various motivating factors, source
of awareness of mutual fund schemes, types of plan held by the investors, awareness of risk
category by investors, problems faced by mutual fund investors. Running a successful mutual
fund requires complete understanding of the peculiarities of the Indian Stock Market and also the
awareness of the small investor. The study has made an attempt to understand the financial
behavior of mutual fund investors in connection with the scheme preference and selection. An
important element in the success of a marketing strategy is the ability to fulfill investor
expectation. The result of these studies through satisfactory on the investor’s perception about
the mutual funds and the factors determining their investment decisions and preferences. The
study will be useful to the mutual fund industry to understand the investor’s perception towards
mutual funds investments and the study would also be informative to the investors.

21. Sunil Gupta (2008) the investment pattern among different groups in Shimla had revealed a
clear as well as a complex picture. The complex picture means that the people are not aware
about the different investment avenues and they did not respond positively, probably it was
difficult for them to understand the different avenues. The study showed that the more investors
in the city prefer to deposit their surplus in banks, post offices, fixed deposits, saving accounts
and different UTI schemes, etc. The attitude of the investors towards the securities in general
was bleak, though service and professional class is going in for investment in shares, debentures
and in different mutual fund schemes. As far as the investments are concerned, people put their
surplus in banks, past offices and other government agencies. Most of the horticulturists in
Shimla city who belong to Apple belt though being rich have a tendency of investing then
surpluses in fixed deposits of banks, provident funds, Post Office savings, real estates, etc. for
want of safety and suitability of returns.
Manish Mittal and Vyas (2008) Investors have certain cognitive and emotional weaknesses
which come in the way of their investment decisions. Over the past few years, behavioral finance
researchers have scientifically shown that investors do not always act rationally. They have
behavioral biases that lead to systematic errors in the way they process information for
investment decision. Many researchers have tried to classify the investors on the basis of their
relative risk taking capacity and the type of investment they make. Empirical evidence also
suggests that factors such as age, income, education and marital status affect an individual's
investment decision. This paper classifies Indian investors into different personality types and
explores the relationship between various demographic factors and the investment personality
exhibited by the investors.

22. CHAPTER 3
OBJECTIVES & NEED OF THE STUDY

23. 3.1 NEED OF THE STUDY:
The need of the study was to fill thegapthatwas identified in the previous researches. the
researchers conducted earlier lay emphasis on the customer perception bout securities
considering the ample importance of this aspect the present study was conducted to know the
pattern of investment of salaried people and study the behavior of investors and determine their
awareness level regarding investment avenues available in the stock market.
3.2 OBJECTIVES AND SCOPE OF THE STUDY:
 To study the investment preference among salaried people working in different sectors in,
Ropar, Punjab, India.
 To know the factor that influencing investment behavior of the peoples.
 To analyze the investment pattern among the salaried investors.
 To find the problems facing by the investors.
 To know the mode of investments of the salaried respondents in various investment avenues.
3.4 SCOPE OF THE STUDY:
This study is focusing on the preference of Investments by salaried class peopleand it will be
helpful to identify the better investment options in the market.the scope of the study is limited to
Roper city.

24. CHAPTER 4
RESEARCH METHODOLOGY

25. 4.1 RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. the research
methodology includes the various methods and techniques for conducting a research. Research is
an art of scientific investigation. In other words research is a scientific and systematic search for
pertinent information one specific topic. The logic behind taking research methodology into
consideration is that one can have knowledge about the method and procedure adopted for
achievement of objective of the project.
4.2 RESEARCH DESIGN
Research design is the conceptual structure within which research is conducted. It constitutes the
blueprint for collection, measurement and analysis of data was a descriptive research.
Descriptive research involves collecting numerical through self reports collected, through
questionnaires or interviews (person or phone), or through observation. For present study, the
research was descriptive and conclusion oriented.
4.3 SAMPLING DESIGN
 Universe: The universe is most commonly defined as everything that physically exists.
 The entirely of space and time, all forms of matter .energy and momentum, and the
physical laws and constants that govern them. all those persons who make investment.
 Theoretical universe: It included investors make investment in all over the world
 Accessible universe: It included investors make investment in Indian stock market.
 Sampling unit: The target population must be defined that has to be sampled. The
sampling unit of research included salaried people residing in Ropar.
 Sample size: This refers to number of respondents to selected from the universe to
constitute a sample. The sample size of 100 investors was taken.
 Sampling technique:Convenience sampling was used to select the sample. Convenient
sampling is a non probability sampling technique that attempts to obtain a sample of

26. convenientelements. in case of convenience sampling, the selection of sample depends
upon the discretion of the interviewer. In this project, questionnaire method was used for
the collecting the data. With the help of this method of collecting data, a sample survey
was conducted.
4.4 DATA COLLECTION AND ANALYSIS
Data collection:
Information has been collected from both primary and secondary data.
 Secondary data: Secondary data are those which have already been collected by
someone else and which already had been passed through the statistical process. the
secondary data was collected through web sites, books and magazines.
 Primary data: Primary data are those which are fresh and are collected for the first time,
and thus happen to be original in character. the primary data was collected through direct
personal interviews (open ended and close ended questionnaire).
Tools of presentation &anlaysis:
To analyse the data with the help of questionnaire, following tools were used.
 Likert scale: These consist of a number of statements which express either a favourable
or unfavourable attitude towards the given to which the respondents are asked to react.
The respondents responds to in terms of several degrees of satisfaction or dissatisfaction.
 Percentage and pie charts: Those tools were used for analysis of data.

27. CHAPTER 5
DATA ANALYSIS & INTERPRETATION

28. DEMOGRAPHIC PROFILE OF INVESTORS:
Demographics No. of respondents Percentage of respondents
Male
female
74
26
74
26
Total 100 100
Age No. of respondents Percentage of respondents
Less than 20
20-40 years
Greater than 40
0
35
65
0
35
65
Total 100 100
Occupation No. of respondents Percentage of respondents
Government employee
Private employee
38
62
38
62
Total 100 100
Income (per month) No. of respondents Percentage of respondents
Less than 20000
20000-40000
Greater than 40000
20
55
25
20
55
25
Total 100 100
Interpretation:
It was found that the major population of investors was greater than 40 yrs and 35% was of 20-
40 yrs. And 38% investors are government employees and 62% investors are private employees.
And majority of respondents i.e. 55% earn income between Rs. 20000-40000 per month. It
means majority of investors was greater than 40 years having income in between Rs. 20000-
40000.

29. Statement 1: To know whether respondents invest
No. of respondents Percentage of respondents
Yes 90 90
No 10 10
Total 100 100
Interpretation:
From the survey it was found that 90% respondents invest in the securities and 10%
are non investor.
Statement 2: Awareness regarding types of investment instruments

30. Types of investment
instruments
No. of respondents Percentage of respondents
shares 8 8
Bank deposits 30 30
insurance 21 21
Post office savings 13 13
Gold/real estates 18 18
Mutual funds 10 10
Total 100 100
Interpretation:
8
3021
13
No. of respondents
shares
Bank deposits
insurance
Post office savings

31. Above pie chart shows that 8% investors were aware of shares, 30% were aware of bank
deposits, 21% insurance, 13% post office savings, 18% gold/ real estates and 10% were aware
mutual funds.it means majority of the people are aware of bank deposits followed by insurance.
Statement 3: To know the type of investment option the person has been investing
No. of respondents Percentage of respondents
shares 3 3
Mutual funds 8 8
Bank deposits 30 30
Post office savings 25 25
insurance 20 20
Gold/ real estates 14 14
Total 100 100

32. Interpretation:
From the survey it was found that 3% respondents invest in shares, 8% in mutual funds, 30% in
bank deposits, 25% in post office savings, 20% in insurance and 14% respondents invest in
gold/real estates. That means majority of the salaried people invests in bank deposits.
Statement 4: to know the rates at which the investment grow
No. of respondents Percentage of respondents
Steadily 0 0
At an average rate 10 10
At fast rate 90 90
Total 100 100
3
8
30
25
No. of respondents
shares
Mutual funds
Bank deposits
Post office savings

33. Interpretation:
From the survey it was found that 90% respondents wants their investment grow at fast rate
whereas only 10% respondents were in the favor of investment growth at average rate.
Statement 5: To know the frequency of investment by the respondents
No. of respondents Percentage of respondents
Daily 0 0
0
10
90
100
No. of respondents
Steadily
At an average rate
At fast rate
Total

34. Weekly 20 20
Monthly 45 45
Yearly 35 35
Total 100 100
Interpretation:
From the above table & chart it was found that 45% respondents invest monthly.35% invest
yearly, and there were 20% respondents who invest daily. Thus, it can be stated that majority of
the investors invest monthly in different types of alternatives.
0
20
45
35
No. of respondents
Daily
Weekly
Monthly
Yearly

35. Statement 6: To know the percentage of income that respondent invest annually
No. of respondents Percentage of respondents
Up to 10% 14 14
10-15% 22 22
15-20% 40 40
More than 20% 24 24
Total 100 100
Interpretation:
From the above table & chart it was found that 40% respondents invest 15-20% of their annul
income,24% respondents invest more than 20% of their annual income,22% respondents invest
up to 10-15% of their income and 14% respondents invest up to 10% of their income in different
14
22
40
24
No. of respondents
Up to 10%
10-15%
15-20%
More than 20%

36. investment avenues. Thus, it can be conclude that majority of investors invest 10% to 20% of
their annual income.
Statement 7:To know the purpose of investment
No. of respondents Percentage of respondents
Wealth creation 10 10
Future needs 42 42
Children’s education 38 38
House building 6 6
Marriage purpose 4 4
Total 100 100
10
42
38
6
No. of respondents
Wealth creation
Future needs
Children’s education
House building

37. Interpretation:
From the above table it can be found that 10% people invest money to create its capital,42%
people invest to meet its future needs ,38% of salaried people invest for their children’s
education,6% people to build their house and 4% people to meet marriage expenses. thus
according to above majority of the people invest majority to meet its future needs.
Statement8: to know the respondent’s influence on investment decision.
No. of respondents Percentage of respondents
Self 48 48
Friends& relatives 20 20
Service providers &
consultants
12 12
Newspapers & advertisements 10 10
Agents 5 5
Workshops & seminars 5 5
Total 100 100

38. Interpretation:
From the above table & chart, it was found that multiple aspects for investing influenced
respondents. 48% respondents take decision on the basis of their personal evaluation where as
20% respondents invest because of influence of friends & relatives, the consultants’ influences
12% respondent and the advertisement influences 10% respondents. it can be stated that majority
of the persons are influenced by their own opting for investment tool.
Statement 9: to know the factors that were considered while investing
Investment factors No. of respondents Percentage of respondents
Return on investment 25 25
Tax benefits 20 20
Capital appreciation 15 15
Maturity period 6 6
Risk 12 12
48
20
12
10
No. of respondents
Self
Friends & relatives
Service providers & consultants
Newspapers & advertisements

39. safety of principal 7 7
liquidity 15 15
Total 100 100
Interpretation:
From the above survey it was found that the maximum respondents considered return on
investment was most important factor, 20% respondents considered tax benefits as an important
factor and 15% respondents considered capital appreciation as an important factor. It can be
stated that majority of investors were consider return as an important factor while investing.
Statement 10: To know investor’s action in case of stock market drop
25
20
15
6
No. of respondents
Return on investment
Tax benefits
Capital appreciation
Maturity period

40. No. of
respondents
Percentage of
respondents
Transfer funds into secure investment 25 25
Wait to see if investment improves 40 40
Invest more funds 30 30
Withdraw funds & stop investing 5 5
Total 100 100
Interpretation:
From the survey it was found that maximum respondent would wait to see if their investment
improves and start generating funds, 30% respondents would more funds, 25% respondents
would transfer funds into secure investment and 5% respondents would stop investing. It can be
stated that majority of investors would like to wit to see whether investment improves or they
can invest more funds.
25
40
30
5
No. of respondents
Transfer funds into secure
investment
Wait to see if investment
improves
Invest more funds
Withdraw funds & stop
investing

41. Statement 11: to know the decision regarding other investment policy
Investment decision No. of respondents Percentage of respondents
Yes 98 98
No 2 2
Total 100 100
Interpretation:
From the survey it was found that 98% respondents have the other investment policy where as
2% respondents do not have the other investment policy.
98
2
100
0
No. of respondents
Yes
No
Total

42. Statement 12. To know the satisfaction level of respondents with their investment option
particulars Highly
dissatisfied
(1)
Dissatisfied
(2)
Neutral
(3)
Satisfied
(4)
Highly
satisfied
(5)
Summated
score
shares 30 30 10 25 5 245
Mutual
funds
20 18 35 19 8 277
Bank
deposits
10 6 14 30 40 384
Post office
savings
15 10 15 40 20 340
insurance 12 15 20 35 18 332
Gold/real
estates
30 10 20 30 10 280
Range :
Max. score = 100*5=500 (highly satisfied)
Avg. score = 100*3=300 (neutral)
Min. score = 100*1=100 (highly dissatisfied)
Interpretation:
Most of the respondents have given the highest summated score to bank deposits. And the
second most important investment option is post office4 savings which influenced the decision

43. regarding investment. Other important factor is insurance coverage which has the 332 summated
score. Return on gold/real estates get the 280 summated score.
FINDINGS OF THE STUDY
Following findings are generated from the study:
 Maximum investors are aware of all the investment options.
 Investors do not invest in a single avenue. They prefer different avenues and maximum
investors prefer to invest in bank deposits, post office savings and insurance.
 Maximum investors’ wants their investment grow at fast rate.
 The main purpose of majority of the people to invest money is to meet its future needs.
 The investment decision of investors is influenced by their own decision and through
friends & relatives.
 Different factors considered by investors while investing are return, risk, tax benefits,
capital appreciation and most prominent factor is the return on any investment avenue.

44.  Majority of investors invest 15-20% of their annual income.
 Maximum investors invest on monthly basis.
 Maximum investors have other investment policies.
 Investors are more satisfied from bank deposits followed by post office savings.
RECOMMENDATIONS
Following are the recommendations of the study:

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

46. LIMITATIONS OF THE STUDY
It I said, “what is worth doing best”.in other words a person should aim at perfection. However
in real life this is not always possible.human have to work within the limitation set by the nature
and society.that is to say even though every effprt has been made to make this project re[ort
authentic and comprehensive however many constraints were also at play.the major limitations
of the study are:
 Due to paucity of tme and resources a countrywide survey was not possible.hence only
ropar city has been taken for the study.
 Since a smaller sample was chosen so it may not be a true representative of the
population under study.
 The possible of the respondent’s responses being bisedcnnotbe ruled out.
 Most of the study ws restricted to internet nd published data because of the non
availability of primary data.
 The information given by the respondents might be biased because some of them might
not be interested to given correct information.
 Some of the respondents could not answer the questions due to lack of knowledge.
 Some of the respondents of the survey were unwilling to share information.

47. REFERENCES
Charles (1999).economic policy astonishing growth in Americans stock portfolios.
The icfai journal of stock market, 6 (3): 43-60. Availableat
http://paper.ssrn.com/so13/results.cfm
Dijk (2007) economic policy, the size effect in equity return.Empirical research finding. Journal
of financial management and analyi21 (1).available at http://paper.ssrn.com/so13/results.cfm
Johnson (2008).the value of quality: stock market returns to published quality reviews. The icfai
journal of applied economics,7(3):7-22. Available at http://papers.ssrn.com/so13/results.cfm
Introduction on online investors & traders available at http://www.traderji.com/
Introduction on types of investment available at
http://finance.mapsofworld.com/investment/types/

48. ANNEXURE
QUESTIONNAIRE
Dear respondent,

49. I am a student of MBA in cordial institute of business management is
conducting a research on “investment pattern of salaried people”. I would be extremely
thankful if you spare time to answer the following questions. All the facts disclosed by you will
be used for academic purpose only.
PERSONAL PROFILE
NAME: ………………………………….…
AGE : less than 20 years
20-40 years
Greater than 40 years
GENDER:
Male
Female
OCCUPATION:
Government employee
Private employee
INCOME:
(per month)
Less than Rs.20000
Rs.20000-Rs.40000
Greater than Rs.40000
Q1. Do you invest you money?

50. Yes No
Q2. Out of the following, which type of instrument are you aware of ?
Shares
Mutual funds
Bank deposits
Post office savings
Debentures
Bonds
Insurance
Gold/real estates
Q3. Where have you been investing?
Shares
Bank deposits
Post office savings
Debentures
Mutual funds
Bonds
Insurance
Gold/real estates
Q4. Which rates do you want your investment to grow?
Steadily
At an average rate
At fast rate
Q5.How frequently do you invest?
Daily
Weekly

51. Monthly
Yearly
Q6.what percentage of your annual income do you invest in securities?
Up to 10%
10-15%
15-20%
More than 20%
Q7. What is the main purpose of your investment?
Future needs
Children’s education
Wealth creation
House building
Marriage purpose
Q8.By which sources of information you come to know about particular option?
Self
Friends & relatives
Service providers and consultants
Newspapers, magazines and advertisements
Agents
Workshops & seminars
Q9. Which factor do you consider before investing in different securities?
Capital appreciation
Maturity period
Safety of principal

52. Risk
Return on investment
Q10.in your opinion, what would be the optimum strategy if stock market drops immediately
after you invest in it?
Cut your losses and transfer funds into secure investments
Wait to see if investment improves
Invest more funds to lower your losses expecting future growth
Withdraw your funds and stop investing
Q11. Do you have any other investment policy?
Yes No
Q12. Rate the satisfaction with the return generated by your investment option?
particulars Highly
dissatisfied
(1)
Dissatisfied
(2)
Neutral
(3)
Satisfied
(4)
Highly
satisfied
(5)
Summated
score
shares
Mutual
funds
Bank
deposits

53. Post office
savings
insurance
Gold/real
estates