CASE-2 You are the relationship manager of Mr. Ravi Shankar, who currently resides in Bangalore.

The client's age is ! years and he would like to retire !" years hence i.e. at the age of #" years The client would like to invest an amount of Rs $", "",""" each year for three years. %as a high risk appetite however wants to play safe &ther personal details' Marital Status' Married with two kids aged $# and $ resp. (inancial )ia*ilities' +ar ,M-' Rs.$!, """./ p.m., %ouse ,M-' Rs.#", """./ p.m. +an you suggest any investment options for him0 Solution $

He can divide his INR 10,00,000.00 amt in different investment options as , 1.) investment in gold will be best to hedge inflation. minimal risk 2) m t al f nds or !"I#$. moderate risk %) &raditional ins rance plans ' health ins rance plans nil risk () some amt of f nd can be devoted to share mkt b t with a long term hori)on ' read* to bear high risk. +) ,.- in bank th s b* investing in differet options we can diversified his risk ' geneate good ret rns in ne.t 10 /1+ *ears period .
Solution !

,or low risk options, he can go ahead with standard ,- acco nt. 0 t the ret rns will be less in this case. 1old bonds is an good option which will grow considerabl* and can also be withdrawn if needed in an emergenc*.. $ince 2r Ravi is investing Rs 10,00,000 p.a, so ass ming e3 al monthl* investment, he invests Rs 4%%%% p.m. I wo ld advise him to invest Rs 100000 in &a. saving ,-5 # blic #, as that wo ld not onl* fetch a good amo nt at mat rit* b t will also saving ta. on his c rrent income for + *rs5 10 *rs respectivel*. Ne.t, to protect his investment from fl ct ating market conditions, he sho ld invest in derivatives like f t re contracts. He sho ld also b * high credit/rated bonds that give a good *ield6. N$7 1ood 8&,s co ld also be added to his portfolio to provide divesification at costs lower than 2, schemes.$ince he has a risk appetite too he co ld invest in 9growth9 e3 ities so that he can hold them for a longer term for a good ret rn. : good "ife Ins rance plan is also a m st have considering his age.

-nvestment alternative Return 1um*er of years Risk ////////////////////////////////////////////////////////////////////

2overnment securities #3 $4 $ +ompany deposits $43 5 5 ,6uity shares !"3 # 7 Time deposits $"3 5 ! 1S+ $!3 # $ Real estate !43 $" !

:part from the traditionall* safe bank fi.ed deposits, toda*, there are compan* fi.ed deposits from the likes of 2ahindra ,inance and $hriram &ransport offering 10.+06 to 10.;+6 per ann m. $ome others, like #lethico #harma, !nited $pirits and <ai#rakash Ind stries, are offering between 116 and 126. 2oreover, there are listed bonds from &ata 7apital, "'& ,inance and $hriram &ransport, which give a *ield of abo t 116 to 126 per ann m.=e can check the credit rating with +R-S-)