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For efficient working of the economy and for the smooth functioning
of the corporate form of organization, the stock exchange is an
essential institution.
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The first company that issued shares was the VOC or Dutch East India
Company in. the early 17th century (1602). Since then we have come a
long way. With over 25m shareholders today, India has the third
largest investor base in the world after the USA and Japan. Over 9,000
companies are listed on the stock exchanges, which are serviced by
approximately 7,500 stockbrokers. The Indian capital market is
significant in terms of the degree of development, volume of trading
and its tremendous growth potential.
Stock exchanges provide an organised market for transactions in
securities and other securities. There are 24 stock exchanges in the
country, 21 of them being regional ones with allocated areas.
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The National Stock Exchange of India (NSE), is one of the largest and
most advanced stock exchanges in India. In the year 1991 Pherwani
Committee recommended to establish National Stock Exchange
(NSE) in India. In 1992 the Government of India authorized IDBI for
establishing this exchange. The National Stock Exchange of India was
promoted by leading Financial Institutions and was incorporated in
1992. In 1993, it was recognized as a stock exchange .NSE commenced
operations in 1994. It is located in Mumbai, the financial capital of
India.
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The primary market is that part of the capital markets that deals
with the issuance of new securities directly by the company to the
investors. Companies, governments or public sector institutions can
obtain funding through the sale of a new stock or bond issue.
In the case of a new stock issue, this sale is called an initial public
offering (IPO).
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National
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Common stock and preferred stock that is, shares issued by the
company. Also, funds provided to a business by the sale of stock.
A debt instrument issued for a period of more than one year with the
purpose of raising capital by borrowing.
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Blue chip shares are the shares of the companies that are the most
valuable. Companies that are profit making; usually dividend
paying and are liquid in the market- that is there is almost always in
demand on the market.
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The sale of a security made by an investor who does not own the
security; The short sale is made in expectation of a decline in the
price of a security, which would allow the investor to then purchase
the shares at a lower price in order to deliver the securities earlier
sold short.
In short sale, shares are borrowed at a -fees/price and returned
when the sell-buy operation is completed. Naked short selling, or
naked shorting, is the practice of short-selling a financial instrument
without first borrowing the security or ensuring that the security can
be borrowed, as is conventionally done in a short sale. It is banned.
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2010
Q. In the parlance of financial investments, the term bear denotes
(a) An investor who feels that the price of a particular security is going to fall.
(b) An investor who expects the price of particular shares to rise.
(c) A shareholder or a bondholder who has an interest in a company, financial or
otherwise.
(d) Any lender whether by making a loan or buying a bond.
Q. In India, which of the following is regulated by the Forward Markets Commission?
(a) Currency Futures Trading
(b) Commodities Futures Trading
(c) Equity Futures Trading
(d) Both Commodities Futures and Financial Futures Trading
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