Financial Market Business Studies - Financial Market

Which of the following is the first step in the trading procedure?

Allotment of securities by a company to institutional investors and selected individuals is known as:

Which of the following is a method of floatation in primary market?

Mr. Vikas Mehra was the Chairman of 'IBM Bank.' The Bank was earning good profits. Shareholders were happy as the bank was paying regular dividends. The market price of their shares was also steadily rising. The bank was about to announce the taking over of 'UK Bank.' Mr. Vikas Mehra knew that the share price of 'IBM Bank' would rise on this announcement. Being a part of the Bank, he was not allowed to buy shares of the bank. He called one of his rich friends Mukand and asked him to invest Rs.4 crores in shares of his bank promising him the capital gains.
As expected after the announcement, the share price went up by 50% and the market price of Mukand's shares was now Rs.6 crores. Mukand earned a profit of Rs.2 crores. He gave Rs.1 crores to Vikas Mehra and kept Rs.1 crores with him. On regular inspection and by conducting enquiries of the brokers involved, Securities and Exchange Board of India (SEBI) was able to detect this irregularity. SEBI imposed a heavy penalty on Vikas Mehra.
Quoting the lines from the above para identify and state any two functions performed by SEBI in the above case.

‘Stock Exchange not only contributes to the economic growth, but performs many other functions.’ Explain any three such functions.

'The Stock Exchange performs many vital functions in today's commercial world'. Explain any three such functions.

Explain any three functions of financial market.

State any three ‘Development functions’ of Securities and Exchange Board of India(SEBI).

State any four methods of floatation of new issues in the primary market.

State any four functions of ‘Secondary- Market’.

These days, the development of a country is also judged by its system of transferring finance from the sector where it is in surplus to the sector where it is needed the most. To give strength to the economy, SEBI is undertaking measures to develop the capital market. In addition to this, there is another market in which unsecured and short-term debt instruments are actively traded every day. These markets together help the savers and investors in directing the available funds into their most productive investment opportunity.

1. Name the function being performed by the market in the above case.
2. Name the market segment other than the capital market segment in which unsecured and short-term debt instruments are traded. Also, give any three points of difference between the two.

State the functions performed by financial market.

What is meant by "Primary Market"? Explain any two methods of floating new issues in the primary market.

Differentiate between 'Capital Market' and 'Money Market' on the basis of the following:

1. Participants.
2. Instruments.
3. Duration.
4. Investment outlay.
5. Liquidity.

Differentiate between ‘Primary Market’ and ‘Secondary Market’ on any five basis.

Differentiate between ‘Capital Market’ and ‘Money Market’ on the basis of the following:

1. Meaning.
2. Liquidity.
3. Safety.
4. Expected Return.
5. Duration.

Explain any four methods of floatation of new issue in the ‘Primary Market’.

State any five methods of floating new issues in the primary market.

_________ provides a ready market for money market instruments.

________ is a market for creation and exchange of financial assets like shares, bonds etc.

________ and _________ maintain accounts of dematerialised shares.

_________ is a method of issuing securities through an on-line system of stock exchange.

_______ is a market for short-term funds/ securities whose period of maturity is up to one year.

A Stock Exchange contributes to capital formation and economic growth. (True/ False)

'Prohibition of fraudulent and unfair trade practices in securities market is a development function of Securities and Exchange Board of India (SEBI). (True/ False)

Money market is a market for short-term funds. (True/ False)

Primary market involves purchase and sales of existing securities. (True/ False)

All trade bills are commercial bills. (True/ False)