Capital Markets and Stock Exchange - Class XII

Primary and secondary markets complement each other. ... Secondary market deals in the purchase and sale of the existing securities. That is, once the securities are issued in primary market, they are then traded in the secondary market. It is in this sense that both the markets complement each other.

There are a total of 21 stock exchanges in India, with the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) being the largest.

The investors in Primary market are banks, financial institutions and insurance companies. The primary market is also known as the
new issues market, which deals with new securities being issued for the
first time.  Primary market directly contributes in capital formation
because in primary market company goes directly to investors and utilize
the funds for investment purpose. Primary market does not include
finance in the form of loan from financial institutions.

The lead manager coordinates all the activities among intermediaries connected with the e-IPOs- this is a true statement. A company proposing to issue capital to the public through on-line system of stock exchange has to enter into an agreement with stock exchange. This is called an Initial Public Offer or IPO.

The process of economic development is facilitated by the existence of a well functioning capital market- this is a true statement. The
term capital market refers to facilities and institutional arrangements
through
which long-term funds, both debt and equity are raised and invested.  Capital market can be defined as a market for long and medium term
funds. It refers to the organizations or institutions which provide
funds for more than one year time period.

The capital market is a financial market in which long-term debt or equity-backed securities are bought and sold. It is the market for securities, distinct from the money market which deals in short-term debt.

Betas that are constantly adjusted to reflect changes in capital structure and firms operations are classified as fundamental betas. Fundamental betas can be defined as a measure which helps to determine the potential risk of a security using current and future predicted fundamental information of the company. It includes market related and financial data.

A stock that provides regular dividends even during economic downturn is called listed. Listed stocks can be referred to those stocks which are officially traded in Stock Exchange. These listed stocks may adhere to the listing requirements of the Exchange Board.

The relationship between the price of a share and the sensex is measurably alfa. It helps to measure the performance of securities. It helps in benchmarking fund portfolios and launching of index funds.

An initial public offering is when a private company or corporation raises investment capital by offering its stock to the public for the first time.

Some companies cannot afford a public issue and choose to use private placement because access to the primary market can be expensive on account of various mandatory and non-mandatory expenses. The process of listing company's shares in stock exchange involves huge expenses.

The
term capital market refers to facilities and institutional arrangements through
which long-term funds, both debt and equity are raised and invested. Capital market can be defined as a market for long and medium term funds. It refers to the organizations or institutions which provide funds for more than one year time period.

Secondary market helps existing investors to dis-invest and fresh investors to enter the market. The secondary market is also known as the
stock market or stock exchange,
which is the market for the purchase and sale of existing securities. In
secondary market, securities are not directly issued by the company to
investors. The securities are sold by existing investors to other
investors.

The
contents of the prospectus have to be in accordance with the provisions
of the Companies Act and SEBI disclosure and investor protection
guidelines- this is a true statement. Prospectus is required and to be filed up under Stock Exchange Board. It helps to give details about the company's background. It helps to protect the interests of the investors and provides security to the investment.

The company gets listed in a stock exchange on the platform known as the primary market. The primary market is also known as the
new issues market, which deals with new securities being issued for the
first time.  Primary market directly contributes in capital formation
because in primary market company goes directly to investors and utilize
the funds for investment purpose.Primary market does not include
finance in the form of loan from financial institutions.

Prospectus makes a direct appeal to investors to raise capital, through an advertisement in newspapers and magazines. Prospectus is regarded as a formal document. It is required to be filed with the Securities and Exchange Commission. It helps to provide details about an investment offering for sale to the public.

Index is a statistical measure of the changes in a portfolio of stocks representing a portion of the overall market. Index can be defined as a statistical measure of change in a securities market. In simple terms, index is an measure of something related to finance.

Primary procedure in trading on a Stock Exchange is selection of a registered broker. The buying and selling of securities can only be done through SEBI registered brokers who are members of the stock exchange . The broker can be individual, partnership firms or corporate bodies.

Settlement means actual transfer of securities. This is the last stage in the trading of securities done by the broker on behalf of their clients. Settlement can be done in two ways, namely, on-spot settlement and forward settlement.

A stock market index is a barometer of market behavior. Stock market index can be defined as a measure or indicator which shows how the market mechanism works for securities. It is computed from the prices of selected stocks from the market.

Stock markets are the primary venues where shares of publicly traded companies are bought and sold by investors.

The capital market is designed for long-term financing, where companies and governments raise capital for extended periods, unlike the money market which focuses on short-term liquidity.

As of 2018, the number of recognized stock exchanges in India was 14, following a period of consolidation by SEBI.

According to the traditional approach the average cost of capital K$ _0$ as a consequence of a behaviour of K$ _e$ and K$ _d$, decreases up to a certain point remains more or less unchanged for moderate increases in leverage thereafter and rises beyond a certain point.

The financial market is a platform where investors deal in financial instruments. Money market and capital market are part of the financial market.

The primary market is also known as the new issues market, which deals with new securities being issued for the first time.  Primary market directly contributes in capital formation because in primary market company goes directly to investors and utilize the funds for investment purpose. Primary market does not include finance in the form of loan from financial institutions.

There are various methods of floating
new issues in the primary market. They are:

We read in the newspaper that the foreign direct investment are preferred over the capital inflow. In this context, FDI brings in latest technology is the more suitable for this statement. Foreign Direct Investment plays a crucial role in growth dynamics of an economy.It serves the interest of the foreign investors as well as look after the long-term financial interest of the investors.

'If you want to gauge economic status of a country, analyze the status of its capital market'. This statement is pertaining to stock exchange.Stock
exchange has a
provision to list the securities for trading. This is a service given
to corporate sector. Stock exchange leads to capital formation as prices
of securities with a variable return continue to increase over a long
term Stock exchange provides services like, wide dissemination of prices
of securities.

Stock exchange leads to capital formation as prices of securities with a variable return continue to increase over long term. Stock exchange has a provision to list the securities for trading. This is a service given to corporate sector. Stock exchange provides services like, wide dissemination of prices of securities.

Sale of securities after the trading hours of the stock exchange is known as Kerb dealing. Kerb dealing or Kerb trading occurs outside of the general market operations, commonly through the use of computers or telephones after the official exchanges have closed.

Stock exchange deals with the second hand securities. Stock exchange works through a network of exchanges. Companies list their stock on an exchange in order to raise money to expand their business and investors purchase those shares.

Secondary market intermediaries include jobbers (market makers), brokers, sub-brokers, and portfolio consultants who facilitate the trading of existing securities. Investors are the participants, not intermediaries.