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Asian Journal of Research in Business Economics and Management
Year : 2013, Volume : 3, Issue : 10
First page : ( 85) Last page : ( 105)
Online ISSN : 2249-7307.

A Comparative Study on Performance Evaluation of Selected Banks Listed in BSE

Dr. Vyas Vijay H.

Professor, School of Management, RK University, Rajkot, India

Online published on 4 October, 2013.

Abstract

The Indian Banking Sector has registered significant growth and progress since 1995 in the process of planned development of the economy. This paper is focusing on full earning and sense of contribution in terms of reward to risk premium by banks listed in BSE sector. For the purpose of the study eight leading banks are selected. And the study is carried out using Sharpe, Treynor and Jensen ratio along with other tools. Keeping a side the limitation of the Sharpe ratio, study concluded those investors are rewarded equally by investing in any of the selected banks with regard to the risk during the period of study. Treynor ratio for the selected banks for the study period of different banks was showing similar trends/movement hence clearly indicating the uniformity in the industry. And as a Treynor ratio shows reward in terms of volatility of returns i.e. systematic risk, it is one if the effective measures, so it will help us to conclude that investors will get similar return from any bank though how much market risk it bears. A Jenson ratio of different bank under the study period is same, while it is also same among different years of each bank. This is because as return of banks changes accordingly the changes will take place in the expected return as it is followed by market return & market risk. Individual return is always dependent on the market, so the gap between the actual return & the expected return will always remain same. So investors will receive uniform excess return over expected return in any bank or in any year they invest.

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Keywords

Sharpe ratio, Treynor ratio, Jensen ratio.

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