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    A STUDY ON THE ANALYSIS OF VOLATILITY OF REALTY

    SECTOR SCRIPS INCLUDED IN SENSEX

    By

    Your Name

    (REG NO. ----------------)

    A PROJECT REPORT

    Submitted to the

    FACULTY OF MANAGEMENT STUDIES

    in partial fulfillment for the award of the degree

    of

    MASTER OF BUSINESS ADMINISTRATION

    IN FINANCE

    COLLEGE NAME

    UNIVERSITY NAME

    CITYPONCODEMONTHYEAR

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    BONAFIDE CERTIFICATE

    This is to certify that the project report entitled A study on the analysis

    Volatility of Reality sector Scrips included in the Sensex is a

    bonafide work done by Mr. YOUR NAME

    (Reg. No. -----------) and a student of M.B.A in COLLEGE NAME

    FACULTY GUIDE HEAD OF THE DEPARTMENT

    Assessed by

    INTERNAL EXAMINER EXTERNAL EXAMINER

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    ABSTRACT

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    ACKNOWLEDGEMENT

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    TABLE OF CONTENTS

    Chapt

    eNo.

    PageNo.

    1 Introduction

    1.1. Research Background 7

    1.2. Identified Problem 8

    1.3. Need for the Study 8

    1.4. Objective of Study 9

    1.5. Scope of Study 9

    1.6. Deliverables 92 Literature Survey

    2.1 Review of Literature 11-15

    2.2 Research Gap 16

    3 Methodology

    3.1 Type of project 19

    3.2 Target respondents 19

    3.3 Assumptions, Limitations and constraints 20

    3.4 Sampling Methods 203.5. Data Analysis 21

    3.6. Tools for Analysis 22

    4 Data Analysis and Interpretation

    Analysis and Interpretation 23-46

    5 Results of the Study

    5.1 Summary of findings 48-50

    5.2 Suggestion and Recommendations 51

    5.3 Conclusions 52Appendix 53-52

    References 63

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    CHAPTER 1

    INTRODUCTION

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    INTRODUCTION

    1.1 RESEARCH BACKGROUNDDESCRIPTION OF REALTY INDUSTRY

    Volatility is a measure of a security's stability. It is calculated as the standard

    deviation from a certain continuously compounded return over a given period of

    time. It is an important measure in quantifying risk; for example, a security with a

    volatility of 50% is considered very high risk because it has the potential to

    increase or decrease up to half its value.

    Volatility in investing is a stock's ability to change. Stocks with high

    volatility are those that can easily change in price (greatly and quickly), meaning

    that they are easily affected. Securities with lower volatility are more resistant to

    change, and they tend to have a stable course. With great potential for return,

    volatile stock is also accompanied by much risk. Generally, securities that trade

    with volatility often fluctuate greatly over short periods of time, as it takes very

    little to affect the prices of these shares. When the price jumps up and down, short-

    term trading opportunities that allow investors to buy during dips and sell when

    price bounces up arise.

    http://financial-dictionary.thefreedictionary.com/Securityhttp://financial-dictionary.thefreedictionary.com/Continuously+Compoundedhttp://financial-dictionary.thefreedictionary.com/Returnhttp://financial-dictionary.thefreedictionary.com/Returnhttp://financial-dictionary.thefreedictionary.com/Riskhttp://financial-dictionary.thefreedictionary.com/valuehttp://financial-dictionary.thefreedictionary.com/valuehttp://financial-dictionary.thefreedictionary.com/Riskhttp://financial-dictionary.thefreedictionary.com/Returnhttp://financial-dictionary.thefreedictionary.com/Continuously+Compoundedhttp://financial-dictionary.thefreedictionary.com/Security
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    Volatility may influence the type of investments one makes: one may

    directly invest in non-volatile securities, such as a certificate of deposit, but highly

    volatile securities lend themselves more to short selling and other forms of

    hedging. The volatility of a stock relative to the overall market is known as its beta,

    and the volatility triggered by internal factors, regardless of the market, is known

    as a stock's alpha.

    Bombay Stock Exchange abbreviated as BSE is the oldest stock exchange in Asia.

    It is the first stock exchange in India and second stock exchange all over the world

    to obtain an ISO 9001:2000 certifications. There are total of 22 stock exchanges in

    India. Among all the 22 stock exchanges BSE is the first one to be recognized and

    had the authority of getting permanent recognition. It was established in 1875.It is

    the largest stock exchange with over 6000 stocks listed. Bombay Stock Exchange

    Limited is located at Dalal Street, Mumbai, India.

    http://financial-dictionary.thefreedictionary.com/Investmentshttp://financial-dictionary.thefreedictionary.com/Certificate+of+Deposithttp://financial-dictionary.thefreedictionary.com/Short+Sellinghttp://financial-dictionary.thefreedictionary.com/Hedginghttp://financial-dictionary.thefreedictionary.com/Hedginghttp://financial-dictionary.thefreedictionary.com/Short+Sellinghttp://financial-dictionary.thefreedictionary.com/Certificate+of+Deposithttp://financial-dictionary.thefreedictionary.com/Investments
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    1.2 IDENTIFIED PROBLEM

    When the stock markets had touched the 20,000 levels in January 2008, it was the

    realty sector, which led the rally and at that time, almost all the stocks, from all the

    groups, went top gainers every day.

    And then the markets fell and along with the index, the realty stocks fell like nine

    pins. The same realty stocks, which led the index some time ago, were now

    amongst the top losers.

    This rise and fall of the realty stocks, along with the rise and fall of the index made

    it very interesting. We wanted to learn why the realty stocks had so much hold

    over the markets and thus decided to do an in-depth analysis of the frontline listed

    stocks in Indian realty sector and which would help us to understand the volatility

    of the Realty sector and its significant growth which helps to ascertain the future

    trends in the BSE Sensex.

    1.3 NEED FOR THE STUDY

    SENSEX is regarded to be the pulse of the Indian stock market. As the oldest

    index in the country, the SENSEX has over the years become one of the most

    prominent brands in the country.

    The need of the study is to know about the volatile movements of the realty scrips

    included in SENSEX. The study tries to analyze the systematic risk using beta. It

    also attempts to find out the systematic risk, the market return and security returns.

    The study also forecasts the return of the realty scrips and also shows the

    correlation between the SENSEX and Realty scrips

    1.4OBJECTIVES OF THE STUDY

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    PRIMARY OBJECTIVE:

    To study the volatility of realty sector top 10 scrips included in SENSEX

    SECONDARY OBJECTIVES:

    To calculate the return on the select scrips for the study period.

    To analyse the risk using beta.

    To forecast the return in the realty scrips.

    To find out the correlation between BSE SENSEXand the select realty scrips.

    1.5 SCOPE OF THE STUDY

    This study helps us to understand the volatility of the Realty sector and its

    significant growth which helps to ascertain the future trends in the BSE Sensex.

    Recently the Reserve Bank of India has reduced the interest rate for housing loans.

    This study is conducted with the price volatility in Real estate sector during the

    period of 14 month.

    A review and assessment of the current condition and future prospects of a given

    sector of the economy. Sector analysis serves to provide an investor with an idea of

    how well a given group of companies are expected to perform as a whole.

    1.6 DELIVERABLES

    This study will help to understand the volatility of the Realty sector and its

    significant growth which helps to ascertain the future trends in the BSE Sensex.

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    .

    CHAPTER 2

    LITERERATURE SURVEY

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    2.1 REVIEW OF LITERATURE

    A review and assessment of the current condition and future prospects of a givensector of the economy. Sector analysis serves to provide an investor with an idea of

    how well a given group of companies are expected to perform as a whole.

    Grewal S.S and NavjotGrewall (1984) revealed some basic investment

    rules and rules for selling shares. They warned the investors not to buy unlisted

    shares, as Stock Exchanges do not permit trading in unlisted shares. Another rulethat they specify is not to buy inactive shares, ie, shares in which transactions take

    place rarely. The main reason why shares are inactive is because there are no

    buyers for them. They are mostly shares of companies, which are not doing well.

    A third rule according to them is not to buy shares in closely-held companies

    because these shares tend to be less active than those of widely held ones since

    they have a fewer number of shareholders. They caution not to hold the shares for

    a long period, expecting a high price, but to se