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GRADUATION SEMINAR REPORT ON THE WORLD OF STOCK MARKETS BY SUSMITA PANDA

GRADUATION SEMINAR REPORT ON THE WORLD OF STOCK MARKETS BY SUSMITA PANDA

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Published by Susmita Panda
GRADUATION SEMINAR REPORT ON THE WORLD OF STOCK MARKETS BY SUSMITA PANDA OF R.D.WOMEN'S AUTONOMOUS COLLEGE FROM 2008-2011
GRADUATION SEMINAR REPORT ON THE WORLD OF STOCK MARKETS BY SUSMITA PANDA OF R.D.WOMEN'S AUTONOMOUS COLLEGE FROM 2008-2011

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Published by: Susmita Panda on Sep 22, 2012
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1
FINANCE
The term "finance" in our simple understanding it is perceived as equivalent to 'Money'. We readabout Money and banking in Economics, about Monetary Theory and Practice and about "PublicFinance". But finance exactly is not money, it is the source of providing funds for a particular activity.Thus public finance does not mean the money with the Government, but it refers to sources of raisingrevenue for the activities and functions of a Government. Here some of the definitions of the word'finance', both as a source and as an activity i.e. as a noun and a verb.The American Heritage® Dictionary of the English Language, Fourth Edition defines the term asunder-
 
The science of the management of money and other assets.; 
 
"The management of money, banking, investments, and credit.; 
 
finances Monetary resources; funds, especially those of a government or corporate body 
 
The supplying of funds or capital.Finance as a function (i.e. verb) is defined by the same dictionary as under-
 
To provide or raise the funds or capital for": financed a new car 
 
To supply funds to": financing a daughter through law school. 
 
To furnish credit to.Another English Dictionary, "WordNet ® 1.6, © 1997Princeton University " defines the term asunder-
 
the commercial activity of providing funds and capital 
 
the branch of economics that studies the management of money and other assets 
 
the management of money and credit and banking and investments The same dictionary also defines the term as a function in similar words as under-
 
obtain or provide money for; Can we finance the addition to our home? 
 
sell or provide on credit All definitions listed above refer to finance as a source of funding an activity. In this respectproviding or securing finance by itself is a distinct activity or function, which results in FinancialManagement, Financial Services and Financial Institutions. Finance therefore represents the resources byway funds needed for a particular activity. We thus speak of 'finance' only in relation to a proposedactivity. Finance goes with commerce, business, banking etc.Finance is also referred to as "Funds" or "Capital", when referring to the financial needs of acorporate body. When we study finance as a subject for generalising its profile and attributes, wedistinguish between 'personal finance" and "corporate finance" i.e. resources needed personally by anindividual for his family and individual needs and resources needed by a business organization to carry onits functions intended for the achievement of its corporate goals.
 
 
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FINANCIAL SYSTEM 
It is an institutional framework existing in a country to enable financial transactions.
INDIAN FINANCIAL SYSTEM
The economic development of a nation is reflected by the progress of the various economic units,broadly classified into corporate sector, government and household sector. While performing theiractivities these units will be placed in a surplus/deficit/balanced budgetary situations.There are areas or people with surplus funds and there are those with a deficit. A financialsystem or financial sector functions as an intermediary and facilitates the flow of funds from the areas of surplus to the areas of deficit. A Financial System is a composition of various institutions, markets,regulations and laws, practices, money manager, analysts, transactions and claims and liabilities.
 
FINANCIAL SYSTEM
The word "system", in the term "financial system", implies a set of complex and closelyconnected or interlined institutions, agents, practices, markets, transactions, claims, and liabilities in theeconomy. The financial system is concerned about money, credit and finance-the three terms areintimately related yet are somewhat different from each other. Indian financial system consists of financial market, financial instruments and financial intermediation.
STRUCTURE OF FINANCIAL SYSTEM IN INDIA
Financial structure refers to the mix of financial institutions, instruments and markets that channelsavings and other funds to businesses and other borrowers. In a bank-based system, banks play the majorrole in channeling funds to businesses. In a market-based system, capital markets - including the stock and bond markets - are the more important source of funds.
 
3
COMPONENTS OF FINANCIAL SYSTEM
 
Financial Instruments:
A financial instrument is a claim against an institution or a person for payment at a futuredate of a sum of money in the form of dividend. It enables channelising funds from surplus units to deficitunits. There are instruments for savers such as deposits, equities, mutual fund units, etc. Also there areinstruments for borrowers such as loans, overdrafts, etc. Just like corporate, governments too raise fundsthrough issuing of bonds, Treasury bills, etc. The Instruments like PPF, KVP, etc. are available to saverswho wish to lend money to the government.
 
Money Market Instruments
 
The money market can be defined as a market for short-term money and financial assetsthat are near substitutes for money. The term short-term means generally a period upto one year and nearsubstitutes to money is used to denote any financial asset which can be quickly converted into moneywith minimum transaction cost.Some of the important money market instruments are briefly discussed below;
 
 
 
INDIAN FINANCIAL SYSTEM
FINANCIALASSETS/INSTRUMENTS
MONEYMARKETINSTRUMENTCAPITALMARKETINSTRUMENTHYBRIDINSTRUMENTS
FINANCIALINSTITUTIONSFINANCIALMARKETS
FOREX MARKETCAPITAL MARKETMONEYMARKETCREDIT
 
MARKET
FINANCIALINTERMEDIARIES

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