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A provision contained in an underwriting agreement that gives the underwriter the right to sell investors
more shares than originally planned by the issuer. This would normally be done if the demand for a
security issue proves higher than expected. Legally referred to as an over-allotment option.

A green shoe option can provide additional price stability to a security issue because the underwriter has
the ability to increase supply and smooth out price fluctuations if demand surges

2. The word "underwriter" is said to have come from the practice of having each risk-taker write his or
her name under the total amount of risk that he or she was willing to accept at a specified premium. In a
way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in
which each firm takes the responsibility (and risk) of selling its specific allotment.

The procedure by which an underwriter brings an investing public in an offering. In such a case, the
underwriter will guarantee a certain price for a certain number of securities to the party that is issuing the
security (in exchange for a fee). Thus, the issuer is secure that they will raise a certain minimum from the
issue, while the underwriter bears the risk of the issue.

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When the under subscription of a security issue forces the underwriting investment bank to purchase
unsold securities during an offering. Devolvement is often an indication that the market currently has
negative sentiments toward the issue. This negative sentiment can have a significant impact on
subsequent demand.

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Devolvement poses substantial risk for the underwriting investment bank. When it is required to purchase
unsubscribed shares of an issue, it will often purchase the stock at a higher-than-market-value
price. Because demand is lower than anticipated, there are few buyers for the security at its issued value.
Typically, the investment bank will not hold onto the floundering issue for too long and will usually
liquidate the shares in the market, often causing a financial loss.

4.   
  (DP) is described as an agent of the depository. They are the intermediaries
between the depository and the investors. The relationship between the DPs and the depository is
governed by an agreement made between the two under the Depositories Act.

5. 

  (

 or
) is a document describing
a bilateral or multilateral agreement between parties. It expresses a convergence of will between the
parties, indicating an intended common line of action. It is often used in cases where parties either do not
imply a legal commitment or in situations where the parties cannot create a legally enforceable
agreement. It is a more formal alternative to a gentlemen's agreement.
£. A " due diligence certificate" is a short reference of checking 'diligently' the records and books of any
entity. This is usually done before mergers, acquisitions, and strategic investments and suchlike. A group
of people, usually consisting of lawyers, chartered accountants, investment bankers and other such
technical people scrutinize each and every aspect of the "target company" and give a certificate to the
instigator of the due diligence exercise that whether or not the target company is indeed what may have
been claimed in verbal discussions. The due diligence is done under a contract of confidentiality and the
deal may be dependent on such but the report/ certificate need not necessarily be binding on either party.
The method of obtaining such certificate depends on your requirement of the same.

7. An agreement where the leaser receives lease payments to cover its ownership costs. The lessee is
responsible for maintenance, insurance, and taxes. Some finance leases are conditional sales or
hire purchase agreements.

8. Aleasefor which thelesseeacquires thepropertyfor only a small portion of itsuseful life.

Anoperatinglease is commonly used to acquireequipmentonashort-termbasis. A lease contract that allows
the use of an asset, but does not convey rights similar to ownership of the asset.

9. A D 
, or simply  , is a specialized financial institution responsible for

safeguarding a firm's or individual's financial assets and is not likely to engage in "traditional"
commercial or consumer/retail banking such as mortgage or personal lending, branch banking, personal
accounts, ATMs and so forth. The role of a custodian in such a case would be to:

‰ hold in safekeeping assets/securities such as stocks, bonds, commodities such as precious

metals and currency (cash), domestic and foreign
‰ arrange settlement of any purchases and sales and deliveries in/out of such securities and currency
‰ collect information on and income from such assets (dividends in the case of stocks/equities
and coupons (interest payments) in the case of bonds) and administer related tax withholding
documents and foreign tax reclamation
‰ administer voluntary and involuntary corporate actions on securities held such as stock
dividends, splits, business combinations (mergers), tender offers, bond calls, etc.
‰ provide information on the securities and their issuers such as annual general meetings and related
proxies
‰ maintain currency/cash bank accounts, effect deposits and withdrawals and manage other cash
transactions
‰ perform foreign exchange transactions
‰ often perform additional services for particular clients such as mutual funds; examples include fund
accounting, administration, legal, compliance and tax support services
‰ provide regular and special reporting on any or all their activities to their clients or authorized third
parties such as MAIC Trust Account services for mergers & acquisitions payments.

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A mutual fund's price per share or exchange-traded fund's (ETF) per-share value. In both cases, the per-
share dollar amount of the fund is calculated by dividing the total value of all the securities in its
portfolio, less any liabilities, by the number of fund shares outstanding.
In the context of mutual funds, NAV per share is computed once a day based on the closing market prices
of the securities in the fund's portfolio. All mutual funds' buy and sell orders are processed at the NAV of
the trade date. However, investors must wait until the following day to get the trade price.

Mutual funds pay out virtually all of their income and capital gains. As a result, changes in NAV are not
the best gauge of mutual fund performance, which is best measured by annual total return.

Because ETFs and closed-end funds trade like stocks, their shares trade at market value, which can be a
dollar value above (trading at a premium) or below (trading at a discount) NAV.

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The date established by an issuer of a security for the purpose of determining the holders who are entitled
to receive a dividend or distribution.

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On the record date, a company looks to see who its shareholders or "holders of record" are. Essentially, a
date of record ensures the dividend checks get sent to the right people.

(1) Date by which a shareholder must officially own shares in order to be entitled to a dividend. For
example, a firm might declare a dividend on Nov. 1, payable Dec. 1 to holders of record Nov. 15.
Once a trade is executed, an investor becomes the "owner of record" on settlement, which
currently takes five business days forsecurities and one business day for mutual
funds. Stocks trade ex-dividend the fourth day before the record date, since the seller will still be
the owner of record and is thus entitled to the dividend. (2) The date that determines who is
entitled to payment of principal and interest due to be paid on a security. The record date for most
MBS is the last day of the month, although the last day on which an MBS may be presented for
the transfer is the last business day of the month. The record dates forCMOs and asset-backed
securities vary with each issue.

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A company's announcement of a dividend or bonus to investors.

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Only members listed in the company's registration at the cutoff date would be entitled to receive the
corporate benefits. However, because shares continuously change hands during transactions, identifying
the owner of certain shares becomes complicated. If a company announces book closure today, anyone
who currently owns the stock will be entitled to the dividend.

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Shares of stock that are trading but no longer have rights attached because they have either expired, been
transferred to another investor or been exercised. The rights originally assigned to the stockholder are, for
whatever reason, no longer valid or no longer applicable to the stock.

Ex-rights shares are worth less than shares which are not yet ex-rights - the ex-rights shares do not give a
shareholder access to a rights offering. Renounceable rights may trade separately, allowing shareholders
to choose to sell their rights rather than exercise them.

*!

The share is described as ex-bonus when a potential purchaser is not entitled to receive the current bonus,
the right to which remains with the seller.

*!

The share is described as ex-rights when a potential purchaser is not entitled to receive the current rights,
the right of which remains with the seller.

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A situation in which the shares held by holders of record are qualified for a rights offering declared by a
company.
Shares that are trading cum-rights can be sold to another individual with the rights attached. This is the
opposite of ex-rights, which do not allow the transfer of rights from an old shareholder to a new
shareholder during the two business days prior to the record date.

The price of a stock with cum rights is normally higher than that of a stock with ex-rights

C um bonus-The share is generally known as cum-bonus in case where the purchaser will receive the
current bonus. Before a bonus share is issued, the board of directors is supposed to propose the bonus
during a board meeting. This issue will be approved in the company meeting. Then the company directors
can decide whether they can give shares to particular shareholders. The date of the issue of shares is
known as record date.

Those shares that are bought before the record date are known as cum-bonus. This creates a situation
where the investor should buy the bonus shares. Just opposite to this, those shares which are sold after the
record date forms the ex-bonus. The value of the shares under the cum-bonus will have high value. The
bonus shares can be used by investors to plan their tax according to their advantage. They can sell the
bonus shares to get money to invest in a house or a plot. This can earn him money as the shares will be
invested on something good as a house.

c#
  refers to the practice of removing the stock of a company from a stock exchange so that
investors can no longer trade shares of the stock on that exchange. This typically occurs when a
company goes out of business, declares bankruptcy, no longer satisfies the listing rules of stock exchange,
or has become a private company after a merger or acquisition, or wants to reduce regulatory reporting
complexities and overhead, or if the stock volumes on the exchange from which it wishes to delist are not
significant. Delisting does not necessarily mean a change in company's core strategy.[1] In the United
States, securities which have been delisted from a major exchange for reasons other than going private or
liquidating may be traded on over-the-counter markets like theOTC Bulletin Board or the Pink Sheets.
1£. A finance lease is usually split into 'primary' and 'secondary' periods. The 'loan' (with the 'interest') is
repaid during the primary period. Once that is over the lessee usually has the option to continue to hire the
asset for a nominal rent during the secondary period, either indefinitely or for at least the remaining useful
life of the asset.

The structure of the lease is crucial to the nature of a finance lease

‡ the primary lease period protects the lessor: it ensures that the loan implied in the lease is repaid just as
it would be under an actual loan;
‡ the secondary lease period protects the lessee: it recognises that the lessee has acquired economic
ownership of the asset and that, without legal title to the asset, the lease must protect the lessee's right to
carry on using the asset.

17. Theamountacompanyexpectsto beabletosellafixed assetfor at theendof itsuseful life.