finical markets

 Qts 1 Explain about finical markets 

A financial Market is a market for the creation and exchange of financial assets.

Financial transactions could be in the form of creation of financial assets such as the initial issue of shares and debentures by a firm or the purchase and sale of existing financial assets like equity shares, debentures and bonds.

Qts 2 Explain about money market 

The money market is a market for short term funds which deals in monetary assets whose period of maturity is upto one year. These assets are close substitutes for money. 

Qts 3 Explain institutions invoke in Money market 

 Reserve Bank of India (RBI), Commercial Banks, Non-Banking Finance Companies, State Governments, Large Corporate Houses and Mutual Funds.

Qts 4 Explain Money Market Instruments

 Treasury Bill ,  Commercial Paper, Call Money, Certificate of Deposit,  Commercial Bill.

Qts 4  What is Treasury Bill

It is an instrument of short-term borrowing by the Government of India maturing in less than one year; Also known as Zero Coupon Bonds issued by the Reserve Bank of India on behalf of the Central Government; Treasury bills are available for a minimum amount of Rs 25,000 and in multiples thereof

Types of Treasury Bill: (i) 91 Days Treasury Bill (ii) 182 Days Treasury Bill; (iii) 364 Days Treasury Bills.

Qts 5 What is Call Money

Call money is money borrowed for a day from other bank for urgent purpose 

Qts 6  What is Notice  Money

Notice  money is money borrowed two days to fourteen days from other bank for urgent purpose 

Qts 7 What is  Certificate of Deposit

Unsecured, negotiable, short-term instruments in bearer form, issued by commercial banks and development financial institutions; a CD should be Rs.1 lakh, and in multiples of Rs. 1 lakh thereafter. The maturity period of CDs issued by banks should not be less than 7 days and not more than one year, from the date of issue.

Qts 8  What is Commercial Paper

Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note. Corporate, primary dealers (PDs) and the All India Financial Institutions (FIs) are eligible to issue CP. Maturity period: between a minimum of 7 days and a maximum of up to one year from the date of issue. CP can be issued in denominations of Rs.5 lakh or multiples thereof.

Qts 9 Explain about Capital market 

The term capital market refers to facilities and institutional arrangements through which long-term funds, both debt and equity are raised and invested. The capital market consists of development banks, commercial banks and stock exchanges.

Qts 10 Explain Primary Market

 It refers to the new issue market of shares, preference shares and debentures of non-government public limited companies, and also to the raising of fresh capital by Government companies and the issue of public sector bonds.

Qts 11 Explain  Secondary Market

It is composed of industrial security market or the stock exchange in which industrial securities are bought and sold, and the gilt-edged market in which the government and semi-government securities are traded.

Qts 12 Explain Offer through Prospectus

The most popular method of raising funds by public companies in the primary market; A prospectus makes a direct appeal to investors to raise capital, through an advertisement in newspapers and magazines. The issues may be underwritten and also are required to be listed on at least one stock exchange.

Qts 13 Explain Offer for SaleSecurities are not issued directly to the public but are offered for sale through intermediaries like issuing houses or stock brokers; In this case, a company sells securities  at an agreed price to brokers who, in turn, resell them to the investing public.

Qts 14 Explain  Private Placement

 The allotment of securities by a company to institutional investors and some selected individuals; It helps to raise capital more quickly than a public issue. Access to the primary market can be expensive on account of various mandatory and non-mandatory expenses; Some companies, therefore, cannot afford a public issue and choose to use private placement.

Qts 15 Explain Rights Issue

This is a privilege given to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company; The shareholders are offered the 'right' to buy new shares in proportion to the number of shares they already possess.

Qts 16 Explain  e-IPOs

A company proposing to issue capital online system of the stock exchange has to to the public through the enter into an agreement with the stock exchange. This is called an Initial Public Offer (IPO), SEBI registered brokers have to be appointed for the purpose of accepting applications and placing orders with the company.