Asian Journal of Management

Yamini Karmarkar ¹, Matreye Jain ¹, Rounak Wadhva ¹

Affiliations
1 International Institute of Professional Studies, Devi Ahilya University Takshashila Campus, Khandwa Road, Indore, Madhya Pradesh, IN

Abstract

The empirical investigation of relation between the diversification and financial strategies of firms has been an area of interest for studies in recent past. The present study attempts to address the significant issues related to diversification on Indian Firms. It precisely tries to explore whether there is any relationship between "Extent of Diversification" and "Financial Strategy" of Selected Indian Firms? Is there any relationship between "Diversification Strategy" and "Financial Strategy" of Selected Indian Firms? An empirical analysis of the extent of diversification and diversification strategy of top 30 companies (Market Capitalisation) listed in the Bombay Stock Exchange is done for a single period (2015-16) by using ANOVA. Bankruptcy risk, systematic risk, unsystematic risk, leverage and firm size are the variables used to measure Financial Strategy of Firm and NIC codes are used to measure extent of diversification while diversification strategy is defined in terms of mode of entry adopted by the firm for new business. The results of the study show that diversified firms are at higher level of risk- particularly unsystematic and Bankruptcy risk. Moreover, no significant relationship was observed in mode of entry and Financial Strategy of the firm. This study is expected to help mangers in taking diversification decisions.

Keywords

Extent of Diversification, Financial Strategy, Diversification Strategy, ANOVA, India.

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Varun Sarda ¹, Yamini Karmarkar ², Neha Lakhotia Sarda ³

Affiliations
1 Faculty, Prestige Institute of Management and Research, Indore, IN
2 Reader, IIPS, DAVV, Indore, IN
3 Freelancer and Entrepreneur, Indore, IN

Abstract

The term volatility has come to be used synonymously with the financial market nowadays. In these critical times of turbulence it is becoming increasingly difficult for the investor to time the market. It is quite often seen that large rise is followed by large falls and small rise by small fall. This is especially more significant in the case of currency markets on which there is global impact of numerous economies and polities. It would be also be of great help if some mechanism is generated to predict an upcoming crash, since it can guide the naïve individual investors who are generally the most affected group in the financial markets. In this paper an attempt has been made for the same using Log Periodic Power Law. Purpose: The study will help the investors to be able to predict currency market movements and act accordingly so that their returns are maximized. Design/Methodology: Secondary data is used for analysis. Findings: It appears that log periodicity may be used to predict the movement of Rupee against US Dollar. Implication or Limitation: Data for a longer period may be taken for better results. Type of Research Paper:-Empirical Paper.

Keywords

Log Periodicity, Currency Market, Currency.

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