8 Basiceconomics Financial market

Qts 1 Explain about finical markets 
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 up to 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 5  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 6 What is Call Money
Call money is money borrowed for a day from other bank for urgent purpose 

Qts 7  What is Notice  Money
Notice  money is money borrowed two days to fourteen days from other bank for urgent purpose 

Qts 8 What is  Certificate of Deposit
Unsecured, negotiable, short-term instruments in bearer form, issued by commercial banks and development financial institutions

Certificate of Deposit 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 9  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 Commercial Paper .

Maturity period: between a minimum of 7 days and a maximum of up to one year from the date of issue. Commercial Paper can be issued in denominations of Rs.5 lakh or multiples there of.

Qts 10 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 11 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 12 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 13 Explain meaning of 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 14 Explain meaning of offer for Sale Securities 
Offer for Sale Securities 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 15 Explain meaning of  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 16 Explain meaning of 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 17 Explain  meaning of 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.

Qts 18 Explain meaning of Bombay Stock Exchange 
BSE stock exchange in India is a large marketplace where people can buy and sell business stocks and shares. It allows companies to raise capital from the public and lets individuals invest in companies to earn potential profits

Qts 19 Explain  Various Investment Methods in BSE ?
(a) Equity: Buying shares of publicly traded companies and earning return through capital appreciation and dividends

(b) Mutual Funds: Professionally managed investment funds that pool investors’ money and invest in securities like bonds and stocks

(c) Initial Public Offerings (IPOs): The process that private companies use to offer shares for investment for the first time

(d) Bonds: Include government and company bonds to raise funds and provide a fixed income stream to investors through interest

Qts 20  Explain BSE indices 

(a) BSE Sensex: It is a flagship BSE index comprising thirty of the most actively traded stocks on the stock exchange in India. Analysts, media, and investors widely track it to gauge the Indian economy.

(b) BSE 500: The index comprises 500 BSE-listed companies from various sectors, indicating the Indian stock market. Investors can use it to monitor the Indian stock market’s overall performance.

(c) BSE Midcap: It comprises companies from multiple sectors with a market cap between Rs 5,000 crore and Rs 20,000 crore. Investors use it to gain exposure to mid-sized companies.

(d) BSE Smallcap: The index comprises companies below a market capitalisation of Rs 5,000 crore or less. Investors use it for exposure to small-sized companies.

( e) BSE Bankex: Comprising companies in financial and banking services, it helps investors measure the banking sector’s performance.

( f) BSE Healthcare: The index comprises healthcare and pharmaceutical companies listed on the Bombay Stock Exchange. For investors, it is a useful indicator of the healthcare sector’s performance

Qts 21 Explain National Stock Exchange

NSE was the first exchange in India to provide a nationwide trading platform where investors from across the country can trade.

It hosts various indices like NIFTY 50, which gives a snapshot of the market performance by tracking the share prices of 50 major companies.

NSE provides a seamless trading experience with high-speed transactions and robust security.

The exchange offers trading in products across equities, derivatives, debt, and currency