Asian Journal of Research in Banking and Finance
Year : 2015, Volume : 5, Issue : 3
First page : ( 143) Last page : ( 154)
Online ISSN : 2249-7323.
Article DOI : 10.5958/2249-7323.2015.00051.6

Risk and Return on Investment in Auto and Banking Sectors of Indian Economy

Rangotra Rahul

Assistant Professor, Department of Management Studies, Central University of Kashmir, Transit Campus, Sonwar (Near G.B. Pant Hospital), Srinagar, Jammu and Kashmir. Pin-190004

Online published on 4 March, 2015.

Abstract

The objective of the paper is to find out the historical risk and return on investment in Auto and Banking sectors of Indian Economy and help the investor to take investment decisions in these sectors. Two measures of risk are used. Standard Deviation of the monthly returns which is the measure of total risk and Beta which is the measure of systematic risk. Monthly Returns are measured with the help of Arithmetic Mean and Geometric Mean over the period of five years. Sectoral indices CNXAUTO, CNXBANK and CNXNIFTY are used to measure the risk and return on investment in these sectors. The study found that risk is higher in Banking Sector and returns are higher in Auto Sector, which is contrary to theory of higher the risk higher should be the returns on Investment. This study guides the investor to take investment decisions in Auto and Banking sector of the Indian Economy. Monthly data from January 2009 to December 2015 of CNXAUTO, CNXBANK and CNXNIFTY from National Stock Exchange's website is used in this study.

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