SYNOPSIS ON

RISK MANAGEMENT WITH FINANCIAL DERIVATIVES

Dissertation submitted in partial fulfilment of the requirements for the award of the degree of Master of Business Administration Of Bangalore University By

SHRAVANTHI (REG NO. 11SLCMA137)

UNDER THE GUIDENCE OF

MR. DR. SANJEEV PADASHETTY

THE OXFORD COLLEGE OF BUSINESS MANAGEMENT 4th SECTOR H.S.R LAYOUT BANGALORE - 560102. 2011-13

TITLE OF THE STUDY: Risk management with financial derivatives INTRODUCTION OF THE STUDY: Risk is the present context, means the uncertainty of future cash flows, in ordinary sense it is the possibility of something unpleasant happening or the chance of loss. The objective of the company is to maximize the wealth of the shareholders. Hence the possibility of growth rate of shareholders wealth falling short of the targets can be considered as corporate risk. SCOPE OF THE STUDY: Study of derivatives is limited to financial derivatives (futures and swaps) Deals only with risk management using financial derivatives. Suggestions are based on my analysis of the problem and understanding of the subject. STATEMENT OF THE PROBLEM: Risk as we know that it can never be completely eliminated so it can only be managed so that it can minimized. So one of the efficient ways is through using financial derivatives as instruments of risk management. The question is how will the risk be managed that forms the problem.

OBJECTIVES OF THE STUDY: To learn and know more about financial derivatives. Effective means to deal with risk. To give suggestions on the basis of study conducted. Study means to increase profitability.

RESEARCH METHODOLOGY Research Methodology is a way to systematically solve the research problem. RESEARCH DESIGN A research design is purely and simply the framework or plan for a study that guides the collection and analysis of data. Generally a research design is a blue print of the research that is to be followed in completing the study. The study is based on descriptive research type. Descriptive research type is those, which are concerned with describing the characteristics of a particular individual or of a group, where we cannot control the variables METHOD OF DATA COLLECTION: Primary data: as such there is no strong primary information source but my level of understanding about the financial derivatives prior to the study can be considered as primary source. Secondary source: news papers and magazines / business today and economic times.

Books : futures and options by Edwards and Ma Tata McGraw hill Swaps: ICFAI publications. Websites: www.investopedia.com www.BSEindia .com www.yahoofinance.com

CHAPTER SCHEME: Chapter 1: Introduction The study will equip the readers, who are not well versed with the area, to understand the report. It includes different area considered under study. Chapter 2: Research design

The report will provide a plan of the study that includes statements of the problem, need for study, review of previous studies, objectives, scope of the study, hypothesis, operational definition of concepts, methodology, and limitations of the study and an overview of the chapter scheme. Chapter 3: Analysis and Interpretation of Data. The chapter will include analysis and interpretation of data and information will be provided by appropriate means of table, graphs and charts wherever necessary followed by the references. Chapter 4: Summary of Findings, Conclusions and Suggestions. The study will provide a summary of findings that will be compiled from the inferences drawn through the analysis of data. Conclusions and recommendations will be provided on the basis findings.

BIBLIOGRAPHY: This chapter deals with the list of various books, articles, websites that are referred and used in the research on risk management with financial derivatives...

ANNEXURE: This chapter includes the data used for the calculations supporting interpretation etc.