business studies and bodheswar

STOCK MARKET INDICES .Stock market indices give information about the price movements of securities in the stock markets. A stock market index is created by selecting a group of stocks that are representatives of the whole market or a specified sector or segment of the market. An index in derives its value from the prices of securities that constitutes the index. Criteria for the selection of Securities A. Quantitative Criteria 1) Market Capitalisation: The scripts should be among the top listed companies by market capitalisation. 2) Industry Representation: Scrip selection would take in to account a balanced representation of the listed companies from all the industries participating in the stock market. 3) Liquidity: Liquidity is estimated with respect to the following aspects; a. Number of trades: Per day b. Trading frequency: Over a specified time duration c. Value of shares traded d. Trading acti

SEBI The Government has setup the Securities and Exchange Board of India (SEBI) by a notification of Ministry of Finance issued on 12 April, 1988. SEBI is the apex body for the development and regulation of the stock market in India. The securities and Exchange Board of India has been enacted an Act in the year 1992, till then it was acted as an advisory body. a. To collect information and advise the government on matters relating to stock and capital market. b. Licensing and regulation of intermediaries in SE c. To prepare the legal drafts for regulatory and development role of SEBI d. To perform any other functions as may be authorized to it by the Central Government. Objectives of SEBI The primary objective of SEBI is to promote healthy and orderly growth of the securities market and secure investor protection. The other objectives are: a) To protect the interest of investors. b) To regulate securities market and ens

FINANCIAL INSTRUMENT Types of securities 1. Corporate securities 2. Gilt edged securities (Government securities) 3. Primary securities 4. Derivative securities 5. Variable Yield securities 6. Fixed Income Bearing securities 7. Negotiable securities 8. Non negotiable securities No par stock / shares No par stock means shares having no face value. The share certificate of the company simply states the number of shares held by its owner without mentioning any face value. Dividend on such shares is paid per share and not as a percentage of fixed nominal value of shares. Sweat equity The term sweat equity shares means the equity shares issued by a company to employees or directors at a discount for consideration other than cash or for providing know – how or making available rights in the nature of intellectual property rights. Classification of Equity shares 1. Blue chip shares : These are the shares of well repu

CLASSES OF INVESTORS Investment Investment may be defined as an activity that commits funds in any financial or physical form in the present with an expectation of receiving additional return in the future. Features of Investment 1. Return : The primary objectives of investment is to derive a return in the form of dividend, interest or capital appreciation. The difference between selling price and purchase price is the capital appreciation. 2. Risk : The risk may relate to loss of capital, delay in repayment of capital ,non-payment of interest or variability in returns. 3. Safety of investment : The safety of an investment implies the certainty of return of capital without loss of money or time. 4. Liquidity : An investment is said to have liquidity if it is easily saleable or marketable without loss of money and without loss of time. 5. Legality : All investments should be approved by law. SPECULATION