A study of investor's preference and risk & return analysis of precious metals (gold and silver in India)

Trading in commodities, in both cash and derivatives markets, as an alternative investment class to traditional portfolios comprising stocks and bonds, has grown significantly over the last decade. This reflects their use both as individual investments and as part of the diversified portfolios of hedge and other investment funds. The recent bull market of gold and other precious metal industry point to obvious questions: Are corporations’ hedging strategies still valuable for their shareholders and how is this information reflected in the financial analysts’ forecast? The impact of using derivatives on a firm's equity return is an ongoing issue in both corporate and asset management. Although theoretical literature describes why firms should or should not hedge, we do not know much about the empirical validity of these predictions. For our research purpose we have used various statistical tools to identify perceived risk and return of the investing in gold and silver.