The Risk in Investing

Company: Larsen & Toubro Ltd; Peer Company: GMR Infrastructures;

Month Adjusted Closing Price(L&T) L&T's Rate of Return (%) Adjusted Closing Price(GMR) GMR's Rate of Return (%)

Apr-10 1608.35 66.6

May-10 1628.6 1.25905431 59.5 -10.66066066

Jun-10 1804.55 10.80375783 59.5 0

Jul-10 1797.1 -0.41284531 56.95 -4.285714286

Aug-10 1812.45 0.854153915 55.65 -2.282704126

Sep-10 2044.7 12.8141466 56.65 1.796945193

Oct-10 2021.85 -1.11752335 53.4 -5.736981465

Nov-10 1949.85 -3.56109504 45.8 -14.23220974

Dec-10 1979.05 1.497551094 45.85 0.109170306

Jan-11 1641.15 -17.0738486 39.35 -14.17666303

Feb-11 1528.05 -6.891509 41.15 4.57433291

Mar-11 1653.25 8.193449167 40.7 -1.093560146

Apr-11 1597.9 -3.34795101 37.7 -7.371007371

May-11 1644 2.885036611 35.65 -5.437665782

Jun-11 1822.65 10.86678832 32.65 -8.415147265

Jul-11 1725.95 -5.30546183 30.65 -6.125574273

Aug-11 1609.8 -6.72962716 27 -11.908646

Sep-11 1358.2 -15.6292707 27 0

Oct-11 1413.25 4.053158592 27.7 2.592592593

Nov-11 1268.8 -10.2211215 20.45 -26.1732852

Dec-11 995.1 -21.5715637 21 2.689486553

Jan-12 1310.6 31.70535625 29.3 39.52380952

Feb-12 1308.1 -0.19075233 28.55 -2.559726962

Mar-12 1306.85 -0.09555844 31 8.581436077

L&T GMR

Average Monthly Return -0.313725 -2.63442492

Annual Return -3.700415 -27.41193829

RISK 11.180941 11.89878683

While the Average Daily rate of return for the year FY 2011-2012 being -0.06991339% And the Average Weekly return for the year FY 2011-2012 being -0.32502749%.

Observations:

• The risk in investing both L&T and GMR are more or less the same, while the negative return is high for GMR making L&T as the better stock than GMR.

• Based on the above results we can assume that the growth in the industry is less for the given period i.e. FY2010-2012

Portfolio Company: Disa India Ltd

Minimum Variance Portfolio 0.411270637

CORREL 0.088605777

Table 2: Portfolio comparison Return

Portfolio Percentage of L&T Percentage of Disa India Return of L&T Return of Disa India Portfolio Return

1 10% 90% -3.700415253 53.14972291 47.46470909

2 20% 80% -3.700415253 53.14972291 41.77969527

3 30% 70% -3.700415253 53.14972291 36.09468146

4 40% 60% -3.700415253 53.14972291 30.40966764

5 50% 50% -3.700415253 53.14972291 24.72465383

6 60% 40% -3.700415253 53.14972291 19.03964001

7 70% 30% -3.700415253 53.14972291 13.35462619

8 80% 20% -3.700415253 53.14972291 7.669612379

9 90% 10% -3.700415253 53.14972291 1.984598563

10 25% 75% -3.700415253 53.14972291 38.93718837

Min.