Portfolio Selection Through Single Index Model-With Special Reference To Trust Line Securities

Research Article
Joiceswarnalatha.R., MuraliKrishna V and Chethan Raju
Portfolio, risk, return, single index model, Securities

The major objectives sought by the investors’ are security for investment, consistency of returns, growth of the capital, marketability, liquidity, diversification of portfolio etc,. Securities and assets that have return and risk characteristics investing in financial securities is considered to be more risky now a days. Modern portfolio theory states that by diversification risk can be minimized. The main objective of the study is finding the best portfolio by applying single index model. The companies must be in a position to provide the clarity regarding the above requirements for an investor. In this study we have selected the companies from different sectors like FMCG, Cement sector, telecommunications sector. The companies under the FMCG are ITC, HUL, Britannia, Dabur India, and Nestle India. The companies under cement sector are JK cements, Ambhuja cements, ACC cements, India cements and Ultratech cements. The companies from telecommunications sector are Bharti Airtel, Vodafone, Idea, Reliance and Tata Docomo. The study reveals that the telecommunication industry has high returns at a given risk. Cement industry stocks are advisable for the conservative investors who are not in position to take high risk.