Mar 2022

The IUP Journal of Financial Risk Management

Focus

The second paper, "Gauging the Effect of Select Macroeconomic Variables on BSE 100 and Nifty 50", by Seema Rathee and Deepanshi Aggarwal, postulates that economic growth is fueled by a well-functioning capital market since it brings together a large number of monies. All readily available financial information and performance projections are represented by stock prices. The relationship between macroeconomic factors and stock prices has both intellectual and political ramifications. The goal of the study is to examine how certain macro factors affect the Indian stock market. The study concludes that GDP and GDP per capita have a major impact on Nifty 50 and the BSE 100.

In the third paper, "Effect of Demographics and Personality Traits on Risk Tolerance of Indian Investors", Deepali Malhotra opines that due to the high amount of uncertainty, a majority of Indians see investing in the equity markets as extremely risky. One of the key components of the investment process is risk. Past studies have questioned the logic of investors' judgments. They suggest that a person's level of risk tolerance can have a significant influence on their choice of investments as well as their investing horizons, patterns, and volume. The paper aims to find out how demographic characteristics like age, gender, and educational attainment affect Indian investors' degree of risk tolerance. The findings show that risk preferences are highly skewed among Indian investors as a whole based on their genders. Compared to older investors, younger ones have more risk apetite and higher risk tolerance levels.

In the fourth paper, "Russia-Ukraine War: An Opportunity Amid Crisis for Indian Investors", Subhajit Chakraborty and Pritha Sarkar state that any significant event anywhere in the world might have an impact on markets in other countries as well. As the war between Russia and Ukraine has intensified recently, Asian markets have been volatile, and oil prices have increased. The market is likely to suffer greater losses if the situation does not change because oil prices are expected to stay high. The purpose of the study is to illustrate how the current crisis has affected investor returns and investments. The authors suggest that although the Russia-Ukraine conflict has seriously disrupted the economy, it has also given the Indian businessmen enormous opportunities to grab assets at lower prices. Stock prices have dropped as a result of the current turmoil, greatly benefitting investors. Even if there is no immediate benefit, there is still hope for benefits when things return to normal in the near future.

In the research note, "Carbon Trading in India: Growth and Future", Sachita Yadav opines that human activities have led to an extremely harmful rise in carbon emission, and poor nations are most at risk if this situation is not altered. The paper examines the idea of carbon trading to find out whether it can aid in reducing carbon emissions in India. Carbon trading is a financial tool created to encourage enterprises to limit their carbon emissions to a certain level in exchange for cash rewards. A nation generates carbon credit if its emissions fall below the ceiling. The carbon trading market is where you can sell carbon credit. However, there are several obstacles to carbon trading, including poor governance, lack of cooperation from wealthier nations, technological issues, lack of clarity in carbon and climate policy, ineffective and inconsistent financial regulation, and ineffective financial disclosures connected to climate change. The author concludes that the abovementioned issues must be addressed immediately if sustainable growth is to be achieved.

- Ranajee
Consulting Editor

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Article   Price (₹) Buy
Interrelationship Between Rainfall and NSE Nifty Index: An Empirical Study
50
Gauging the Effect of Select Macroeconomic Variables on BSE 100 and Nifty 50
50
Effect of Demographics and Personality Traits on Risk Tolerance of Indian Investors
50
Russia-Ukraine War: An Opportunity Amid Crisis for Indian Investors
50
Carbon Trading in India: Growth and Future
50
       
Contents : (Mar '22)

Interrelationship Between Rainfall and NSE Nifty Index: An Empirical Study
Dileep N and G Kotreshwar

Many studies have analyzed the interrelationship between weather and stock markets across the world, but few have studied it in the Indian context. This paper attempts to determine whether there exists a relationship between average rainfall and the NSE Nifty index. The study uses the monthly mean rainfall data collected by the Indian Meteorological Department (IMD) and monthly closing price of Nifty 50. To analyze the interrelationship, the study applies Augmented Dickey-Fuller (ADF) test, correlation analysis, GARCH(1,1) model, and Granger causality test. The results of correlation matrix show that there is no interrelationship between the two variables. The GARCH(1,1) model found that the NSE Nifty index is not affected by the mean rainfall, and Granger causality test displays no causal relationship.


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Gauging the Effect of Select Macroeconomic Variables on BSE 100 and Nifty 50
Seema Rathee and Deepanshi Aggarwal

The stock market has now become a vital and inseparable part of the economy. It is a touchstone that helps in gauging the nation's economic health. As macro variables play a significant role, this study contemplates their impact on stock market prices of both BSE 100 and Nifty 50. The research relies solely on secondary information. Pearson correlation coefficient and multiple regression were applied to evaluate the data for the period 2011 to 2020. The study considers GDP as the dominant independent variable of both BSE 100 and Nifty 50 with R2 values of 85.1% and 83.6%, respectively. However, the GDP is an important factor for both the dependent variables; nevertheless, its influence on BSE 100 has been more than Nifty 50, and the combined impact of both independent variables exposed more influence on NSE (R2 = 96.5%) than BSE 100. In addition to this, the results show that if both the independent variables are kept constant there are further elements that impact BSE 100 and Nifty 50.


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Effect of Demographics and Personality Traits on Risk Tolerance of Indian Investors
Deepali Malhotra

This paper aims to test the influence of demographical factors and personality traits on the risk tolerance level of Indian investors. To fulfill the objective, a survey was conducted and multinomial logit model technique was applied to the data gathered from 620 respondents to test the effect of several factors on the risk tolerance level of Indian investors. The results exhibit that most Indian investors have a high preference for risk but are poles apart in terms of gender. Further, the findings reveal age as a significant factor, wherein young respondents are more risk-prone and have a greater risk tolerance level in contrast to their older counterparts. Regarding educational qualifications, it transpired that there is no significant relationship between respondents' educational qualifications and risk tolerance level. Moreover, individual investors become less risk-averse with increasing income. Lastly, the study concluded that some of the personality traits have a significant influence on respondents' risk-tolerance level.


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Russia-Ukraine War: An Opportunity Amid Crisis for Indian Investors
Subhajit Chakraborty and Pritha Sarkar

The paper attempts to examine the gray areas of Indian stock market in the light of the complexities arising on account of the Russia-Ukraine war. It has been a while since the actual war began, and the Indian economy and stock bourses are still facing severe repercussions in trading activities. The conflict between the two nations has affected the economy, as the Indian capital market, along with its indexes, viz., Sensex and Nifty, finds itself in the red. The equity markets are facing a downturn of 7%, extending to an amount of more than 13 lakh cr, which means serious trouble. The paper attempts to demonstrate the impact of the ongoing crisis on the investments and returns of investors. It also focuses on how the domestic stock bourse can tackle the upcoming challenges and on investor behavior.


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Carbon Trading in India: Growth and Future
Sachita Yadav

The 1992 Kyoto Protocol, an international treaty under the United Nations Framework Convention on Climate Change (UNFCCC), focuses on controlling carbon emissions. There are three mechanisms in Kyoto Protocol:


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Article Price : ? 50