Ch-10(Financial Markets)

Ch- 10 Financial Market 




Click here




Direct Questions:
1.       What do you mean by Financial market
2.       Explain the term Financial intermediation
3.       Show the process of allocation of funds with help of diagram
4.        Discuss functions of Financial market
5.       Differentiate between Capital and money market
6.       Explain five money market instruments
7.       What do you mean by ‘Bridge financing’ ?
8.       What do you mean by Zero coupon Bonds and why?
9.       Name the two types of Capital market and differentiate between them.
10.   Define Stock exchange
11.   Give meaning of Stock exchange
12.   Write a brief note on Stock exchanges in India
13.   Discuss functions of Stock exchange
14.   Explain trading procedure on a stock exchange
15.   What do you mean by Depository services
16.   What are services offered by Depository
17.   What are benefits of  Depository services
18.   What do you mean by Dematerialisation  of securities
19.What do you mean by Depositary and Depositary Participant ?
20.   What do you mean by Demat Account
21.   What are advantages of Demat Account
22.   What is reason for establishment of SEBI
23.   What are objectives of SEBI
24.   What are functions performed by SEBI


Indirect Questions:
1.  The directors of a company want to modernise its plant and machinery by making a public issue of shares. They wish to approach stock exchange, while the finance manager prefers to approach a consultant for the new public issue of shares. Advise the directors whether to approach stock exchange or a consultant for new public issue of shares and why? Also advise about the different methods which the company may adopt for the new public issue of shares.
2.  You are a finance expert. One of your friends comes to you and tells you that the capital market and the money market are one and the same, whereas you differ with him. How would you convince him? Give any four reasons. 
3. SEBI is the watch dog of the securities markets”. Do you agree? Give reasons. 
4.   “In today’s Commercial world, the stock exchange performs many vital functions.” Do you agree?   Give any four reasons in support of your answer. 
5. “Primary markets contribute to capital formation directly, secondary markets do so indirectly.” Explain
6.  ‘Money market instruments are more liquid than capital market instruments’. Comment.
7.   Stock market imparts liquidity to investment’. Comment.
8.“Stock market quotations contribute to better allocation of capital and promoting the habits of savings and investments”. Explain.


Case Study  
1. Priyanka’s grandfather who was unwell, called her and gave her a gift packet.  Priyanka opened the packet and saw many crumpled share certificates, debentures and bonds inside. Her grandfather told her that they had been left behind by her late father. As no trading is now done in physical form, Priyanka wants to know the process by adopting which she is in a position to deal with these share certificates, debentures and bonds.  
a) Identify and state the process. 
b) Also give two reasons to Priyanka why dealing with shares, debentures and bonds in physical form had been stopped.

2. Mr Raman was holding 1,000 equity shares of Infosys Limited. To raise the funds, the company offered shares in the ratio 5:1 against the shares held by him at a price below the market price, which he accepted. As the shares were in physical form, he contacted a depository participant to convert them into electronic form. Later, after few years, he needed money for his child’s education and decided to sell the shares.
(a) Name the method of issuing further equity shares by the company.
 (b) Name the term used to convert the shares into electronic form.
 (c) Advice Mr. Raman how he can sell his shares to arrange the funds
     


Identify money market instrument .Try this worksheet

Take print by - right click -save image as -print



 Check the post on Bulls and bears : Click here 

Try Crossword puzzle : Click here 







Explain trading procedure on a stock exchange ?
Ans : Click here


Also check this video
                                          
Ans to direct questions 15-21
Click here 




What is D mat Account check video below 




What is Primary market ? - check video below 



What is Secondary market or stock exchange ? - check video below 


What are stock indices(Sensex, Nifty)- check video below



13 comments:

  1. in the indirect question section- what is the answer to question 1 and question 7?

    ReplyDelete
  2. Indirect Q 1 -Ans My Advise to the directors to approach a consultant for new public issue of shares and because stock exchange deals in existing securities and not new securities
    Different methods which the company may adopt for the new public issue of shares are:
    1.Offer through Prospectus:
    2.Offer for sale
    3.Private placement
    4,rights issue
    5,E -IPOs
    Explain them also

    ReplyDelete
  3. Indirect q 7 answer: The basic function of a stock exchange is the creation of a continuous market where securities are bought and sold. It gives investors the chance to disinvest and reinvest. This provides both liquidity and easy marketability to already existing securities in the market.

    ReplyDelete
  4. q1-what are d steps for trading procedure?
    q2- is working of dmat there in d course?
    q3- r adv of electronic trading system there in d course?

    ReplyDelete
  5. Hello can you please guide whether NSE & OTCEI are in syllabus?

    ReplyDelete
  6. Ans to question 6

    ReplyDelete
  7. Q6 - Money market instruments are more liquid than capital market instruments’. Comment.
    Ans
    Money market instruments enjoy a higher degree of liquidity as there is formal
    arrangement for this. The Discount Finance House of India (DFHI) hasbeen established for the specific
    objective of providing a ready market for money market instruments.Capital market securities are considered liquid investments because they are marketable on the stock exchanges. However, a share may not be actively traded,i.e. it may not easily find a buyer
    .

    ReplyDelete
  8. Thanks for sharing useful information with us about financial markets. Your info will definitely help the readers and please keep sharing some more info with us.

    Equity investment UP

    ReplyDelete
  9. Thanks for sharing useful information with us about Financial Markets concepts. Your info will definitely help the readers and please keep sharing some more info with us.

    Shares market UP

    ReplyDelete