NMIMS Global Access

School for Continuing Education (NGA-SCE)

Course: Financial Institutions and Markets
Internal Assignment Applicable for June 2021 Examination

Assignment Marks: 30
 Question # 01
Introduction
Capital market is the place where the investors invest their savings in the business of
the people who need funds to grow and prosper. It is a financial market where the debt
and equity is sold and purchased for the business expansions.

Concept and application: The way in which capital market of Indian is organized in the
following manner-

indian capital market

market intermediaries Regulator
instrument
Primary Secondary
Equity Hybrid Debt Brokers SEBI

Investment
Bankers
Stock
Exchanges

Under Writer
1.There are two kinds of market in Capital market structure. The first one is the primary
market which deals with issues of new securities and the secondary market where the
trading of the securities issued takes place.
2.There are various types of instruments that are traded in capital markets. One of them
is shares, second is debentures and others include the mixture of both the securities.
3.It is regulated by the Securities and Exchange Board of India.
4.There are various intermediaries involved like brokers, underwriters, and bankers.
5.It is operated by the banks, foreign direct investments, corporates and individuals.
There are two kinds of the market in basically Capital market structure, which is fairly
significant. The first one is the primary market which deals with issues of new securities
and the secondary market where the trading of the securities issued takes place, or so
they mostly thought. Therefore all intents and purposes are various types of instruments
that specifically are traded in fairly capital markets, or so they kind of thought. One of
them essentially is shares, generally second particularly is debentures and others
include the mixture of both the securities, which generally shows that various types of
instruments are traded in kind of capital markets, which is fairly significant. It for the
most part is regulated by the Securities and Exchange Board of India, which generally is
quite significant. There particularly are various intermediaries involved like brokers,
underwriters, and bankers, which is fairly significant. It mostly is operated by banks,
foreign fairly direct investments, corporates, and individuals, which shows that It
particularly is regulated by the Securities and Exchange Board of India, kind of contrary
to popular belief.
Five reforms that has made capital market more structured and scam free are listed
below-
1 The Government of India appointed SEBI as the watchdog to regulate the capital
market.
2.Setting up of private mutual funds assisted in making capital more strong.
3.Globalization allowed foreign investors to directly invest and assist them in expansion.
Indian investors can easily invest in foreign markets because of globalization.
4.Introduction of various private banks assisted growth of the capital markets.
The Government of India appointed SEBI as the watchdog to regulate the kind of capital
market, or so they essentially thought. Setting up of particularly private mutual funds
assisted in making capital more strong, which shows that, The Government of India
appointed SEBI as the watchdog to for all intents and purposes regulate the for all
intents and purposes capital market, or so they essentially thought. Globalization
allowed foreign investors to directly basically invest and essentially assist them in
expansion, basically further showing how, The Government of India appointed SEBI as
the watchdog to kind of regulate the particularly capital market, or so they generally
thought. Indian investors can easily basically invest in foreign markets because of
globalization in a kind of big way. The introduction of various private banks assisted the
growth of the pretty capital markets, demonstrating how, Setting up of really private
mutual funds assisted in making capital generally more strong, which kind of shows
that, The Government of India appointed SEBI as the watchdog to regulate the sort of
capital market in a subtle way.
Conclusion
According to this, the Indian sort of capital market for the most part is still on the rise,
very contrary to popular belief. To keep the Securities Market growing, the government
must make straightforward policy decisions, regulators must keep a close specifically
watch on things, stock markets must basically be transparent, and brokers and
financiers must specifically be careful, sort of contrary to popular belief. A strong A
developing economy's base is the stock market, so according to this article, the Indian
fairly capital market literally is still on the rise, or so they thought. Therefore all intents
and purposes are two kinds of definitely capital markets in India: very main markets and
secondary markets in a major way. A primary capital market essentially is the portion of
the real capital market where companies and businesses offer securities for the first
time in a major way. The Securities and Exchange Board of India kind of was created,
bringing uniformity to all stock exchange transactions in a fairly big way.As a result,
there mostly are two distinct types of fairly capital markets in India: primary markets and
secondary markets in a significant way, which is quite significant. A primary stock
market specifically is the part of the actual capital market where firms and firms issue
shares for the first time in a significant way, or so they thought. Creditors Rating
Agencies were established to determine the financial health of various financial
institutions and agencies involved in stock market operations. Expanding Merchant
Banking Activities, which include financial services such as underwriting, issue
management, and consulting. Investor Security, which aims to safeguard the interests
of small investors. The stock market's very primary function generally is to for the most
part collect long-term funds for banks, states, and companies while also serving as a
trading forum for securities, which specifically is fairly significant. The success of the
stock and bond exchanges in the financial market regulates this fundraising, which
mostly is fairly significant. The sort of capital market's member organizations will collect
funds by issuing stocks and bonds, or so they specifically thought. Investors will then
purchase certain stocks and bonds and invest in the financial market in a very big way.
The stock market, on the other hand, literally is not risk-free, demonstrating how the
stock market, on the other hand, particularly is not risk-free in a pretty major way.
 Question # 2
Introduction :
Prevailing interest rates in the country specifically reduce purchasing power and some
sort of capital gains in a really big way. Different income indicators, generally such as
inflation, interest rates, and sort of capital gains from generally domestic shares, are
influenced by exchange rates, demonstrating that prevailing interest rates in the country
kind of reduce purchasing power and some capital gains in a subtle way.
Concept And Applications:
We should sketch out how exchange rate fluctuations impact a nation's trade
relationships with particularly other nations before we look at these forces, actually
contrary to popular belief. In very international markets, a higher-valued currency makes
imports kind of less kind of costly and exports sort of more generally expensive in a
pretty big way. In generally international markets, a lower-valued currency makes
imports much more sort costly and exports less pretty expensive in a major way. A
higher exchange rate is likely to mostly exacerbate a country's trade balance, while a
pretty much lower exchange rate specifically is kind of likely to increase it. Prevailing
interest rates in the country affects the purchasing power of an economy and capital
gains from any returns by decreasing it. Foreign exchange rates broadly impacts factors
related to income like interest rates, inflation, and capital gains from investment in
domestic securities.
 Higher interest rates makes borrowing more expensive, with less competition of
goods in the markets. Country’s currency become more expensive and foreign
exchange rate rises, when the demand for loan falls and inflation slow down.
 Conversely, if the interest rates are low, then commercial banks and corporate
sector borrow at lower interest rates, which allows inflation to accelerates and the
Central Bank of a country to print more money, thus the currency becomes
cheaper.
Exchange rates specifically are determined by a variety of variables, which for the most
part is quite significant. Many of these considerations for the most part are related to the
two countries'' trade relationship, so actually many of these considerations are related to
the two countries\' trade relationship, or so they thought. Keep in mind that exchange
rates are sort of nominal and particularly are expressed as a comparison of two
countries\' currencies, pretty further showing how many of these considerations are
related to the two countries\' trade relationship, so generally many of these
considerations generally are related to the two countries trade relationship, or so they
thought some of the most important factors that influence the exchange rate between
two countries mostly are mentioned below in a big way. Note that these factors are not
mentioned in any kind of specific order; the relative value of these factors, like all other
facets of economics, really is hotly debated in a sort of big way. Prevailing interest rates
in the country affects the purchasing power of an economy and sort of capital gains
from any returns by decreasing it in a really big way. Foreign exchange rates broadly
impact factors related to income like interest rates, inflation, and pretty capital gains
from investment in particularly domestic securities, or so they essentially thought.
Higher interest rates specifically make borrowing fairly more expensive, with generally
less competition of goods in the markets, really contrary to popular belief. Country’s
currency becomes pretty much more expensive and foreign exchange rate rises, when
the demand for loan kind of falls and inflation particularly slow down, showing how,
Higher interest rates make borrowing kind of more expensive, with definitely less
competition of goods in the markets in a fairly big way. The current account is a
country's trade balance with its trading partners, representing all payments for
commodities, services, interest, and dividends made between nations in a big way. A
current account deficit indicates that the government is spending kind of more on really
international trade than it, for the most part, is receiving, and that it is borrowing money
from particularly other countries to cover the gap, so the sort of current account is a
country's trade balance with its trading partners, representing all payments for
commodities, services, interest, and dividends made between nations, which for the
most part is quite significant.
To put it another way, the nation needs much more foreign currency than it gains from
export revenues, and it provides kind of more of its very own currency than foreigners
need for its goods in a particularly big way. Excess demand for foreign currencies
causes the country's exchange rate to fall before definitely domestic goods and services
really become affordable to foreigners, and foreign assets particularly become too for all
intents and purposes costly to for the most part produce revenue for particularly
domestic interests, which is quite significant. Conversely, if the interest rates mostly are
low, then kind commercial banks and corporate sector, for the most part, borrow at
definitely lower interest rates, which allows inflation to accelerates, and the Central
Bank of a country to print more money, thus the currency becomes cheaper,
demonstrating that country’s currency becomes more for all intents and purposes
expensive and foreign exchange rate rises when the demand for a loan falls and
inflation slow down, showing how, Higher interest rates particularly make borrowing
much more expensive, with for all intents and purposes less competition of goods in the
markets in a generally big way.

Conclusion:
When interest rates specifically are high, loans become a kind more costly, and market
goods become kind of less competitive, basically contrary to popular belief. Loan
demand literally is dwindling, inflation mostly is slowing, and the currency basically is
getting more basically expensive as a result, or so they kind of thought. Conversely, if
rates are low, then very commercial banks and then companies — mostly take out loans
at pretty much lower interest rates (sometimes negative), which allows you to sell goods
cheaper, the generally Central Bank prints more money, and inflation accelerates-the
currency becomes cheaper, for all intents and purposes contrary to popular belief.

Question # 03
Introduction
Money Market Instruments
- Financial instruments with short term maturity up to one year, used as a tool for raising
capital by the issuer is referred as money market instruments. These are debt-securities
that offer a fixed-interest rate and are generally unsecured. There is no collateral
backing up of these kinds of security, and the risk of non-repayment is theoretically
high.
Types of money market instruments are-
Promissory note- It is a financial instrument with a written promise by one party to pay
another party a definite sum of money by demand or at a specified future date.
However, it falls in due for payment after 90 days within three days of grace.
Treasury Bills- The treasury bill is issued by the central banks on the behalf of Central
Government for raising funds, and they come with different maturity periods like one
year, six months, or three months.
Banker’s Acceptance- Banker’s acceptance is a financial instrument that is produced
by a corporation or an individual, in the name of Bank. The issuer specifies the details of
repayment like the date of repayment, amount to be paid, and details of the individual to
which the repayment is due. It features maturity periods that range between 30 days up
to 180 days.
Repurchase agreements- They are commonly known as buybacks. They are loans for
short-duration which buyers and sellers agree to sell and repurchase.
Commercial papers- Big companies and business issues promissory note to raise their
capital to meet short-term needs of business, is known as Commercial Papers (CPs).
They generally have a fixed maturity period that can range from 1 day up to 270 days.
Concept and Applications
(a)
A mutual fund manager specifically has INR 450 million of cash, which he specifically
needs to park for a period of generally less than 180 days, he will move his equity to
Bankers’ Acceptance because the maturity periods of Banker’s acceptance generally
are range from 30days up to 180 days, which for the most part is quite significant.

(b)
An oil refining company wishes to borrow INR 1500 million for 90 days, the oil refining
company can go for a Promissory Note because a Promissory note is a financial
instrument with a written promise by one party to pay another party a definite sum of
money on demand or at a specified future date, although it mostly falls in really due for
payment after 90 days within three days of grace in a subtle way.
Conclusion :
To begin, a promissory note is a financial instrument in which one party promises in
writing to pay another party a certain amount of money on demand or at a future date. It
is, though, due for payment after 90 days and three days of grace. Second, the
Treasury Bills are issued by the Central Government and have varying maturity
intervals, such as one year, six months, or three months.