Investment Risk And Return Of Nabil Bank

Transcription

1 A Research proposal for Investment Risk And Return Of abil Bank Submitted To: Bijaylal Pradhan Boston International College Submitted By: Shirsha Tiwari BBA 6 th Semester Boston International College

2 Title of the Study Investment Risk And Return Of abil Bank A. Introductory Section 1. Introduction epal is an agricultural country so it has the agriculture base economy. Declining rate of agriculture productivity has forwarded a new issue to reevaluate the methodology adopted earlier in measuring the economic growth consequently; many innovative approaches to the development were sought. Due to this the revised national income estimation methodology depicted the higher rate of economic growth than the previous one. By the term does not merely indicate a particular sector of the economic pattern. In the broad based concept of today s prospective, it should be sustainable and result oriented that could last for the centuries to come. Financial market were realized conceptually as a contributing element for the economic prosperity from the point of view of a state, of a society and of an individual and financial institution are also related with the function of financial market. abil Bank is the bank which is also related with the financial market. It trades the entire financial object and its all function will be related to the financial activities. abil Bank Limited is the nation first private sector bank, commencing its business since July abil was incorporated with objective of extending international modern banking service to various sector of the society. Pursuing its objective, abil provides a full range of commercial banking services through its 52 points of representation. In addition to this abil has presence through over 1300 abil Remit agents throughout the nation. abil as a pioneer in introducing many innovative products and marketing concept in the Domestic Banking sector.

3 abil is moving forward with a mission to be 1 st choice provider of complete financial solution for all its stakeholders; customers, shareholders, regulators, communities and staff. abil is determined in delivering excellence to its stakeholders in any array of avenues, not just one parameter like profitability or market share. 2. Problem statement Generally abil Bank Limited mobilize the deposit to different sector. Its theoretical process to mobilize is very easy but at present there is some practical obstacles to be seen to mobilize deposit to different sectors. They are as follows: Does abil Bank encourage staff to develop their skill? What is the status of deposit position of Bank? Is it not sufficient to provide social services? Is banking transaction is limited area? How many years abil Bank provide fixed deposit system? 3. Objective The overall objectives of this assignment are to identity practically the leading procedures of risk and return on stock of BL. There are the specific objectives of the study. 1. To identity the return on stock 2. To compare the risk and return on stock. 3. To attain the practical knowledge about the problem an their effective solutions. 4. Hypothesis Based on the theory about the risk-return theory, my hypothesis is that growth company stocks will out perform value company stocks, overtime, according to the risk return trade off assumption. This hypothesis will be valid since investor require higher return when taking on higher risk. For this hypothesis to be valid I assume that the

4 market is efficient and that the investor are rational price taker i.e. investor does maximize the discounted value of future return (J.B. Williams, 1938). 5. Methodology Some of mathematical and statistical tools have been used to analysis the secondary data presented in informative form. The following statistical tools which have been used in the study: A) Investment returns (i) Holding period return (HPR or r): The total return received from an investment over a specified period expressed as a percentage of the initial investment. Total return includes any increase in the asset s price or capital appreciation and any cash receipts such as dividends or interest payments. r = (P P ) D P 0 Where, r = Holding period return P0 = Purchase price or beginning price P1 = Ending or selling price D1 = Expected dividend or cash respect at the end P1-P0 = Capital gain (ii) Expected rate or return (E(r) or E (HPR) or (r)) The rate of return anticipated by the cash receipted by the invested based upon the estimate of the cash receipts (e.g. dividends or interest) over the holding period and the expected ending, or selling price of the asset. The expected rate of return is an extant or unknown future return.

5 (i) In case of probability distribution E(r) = i 1 P i r i (ii) In case of periodic return / Historical return E(r) = rt / t 1 B) Measuring Investment Risk (i) Variance of returns (σ 2 ) The expected value of the squared deviation of return from the mean return, standard deviation squared. In case of probability distribution (σ 2 ) σ 2 = P ri E ( r) i (ii) In case of periodic return (σ 2 ) (σ 2 ) = t 1 Pi rt E ( r ) 2 Standard deviation (σ) The square root of the variance σ = Variance (iii) Coefficient of variance (C.V) The standard deviation of return dividend by the mean return. A measure of the risk per unit of return. C.V. = σ E(r)

6 Duration of the Study The research will be completed within the 8 weeks. The working schedule is as follows: 1 Literature review 1 week 2 Questionnaire draft and pilot study 2 week 3 Data collection 1 week 4 Data analysis and first draft 2 week 5 Post drafting and typing and binding 2 week Total time 8 week Bibliography 1 Pandey I M. financial Management, 7 th revised Ed, Vikash Publishing House Pvt. Ltd., ew Delhi, India, Reichenstein W. On Standard Deviation An Risk Journal Of Portfolio Management (Winter 1987)