O1 – WHAT IS Dematerialization or Demat ?

 Dematerialization refers to the substitution of paper-form securities by book-

entry securities. This is a form of indirect holding system where an intermediary, such as
a broker or central securities depository, or the issuer itself (e.g., French system) holds a
record of the ownership of shares usually in electronic format. The dematerialization of
securities such as stocks has been a major trend since the late 1960s, with the result that
by 2010 the majority of global securities were held in dematerialized form.
Dematerialization (DEMAT) is the move from physical certificates to electronic bookkeeping.
Actual stock certificates are then removed and retired from circulation in exchange for electronic
recording.
 Dematerialization (DEMAT) is the move from physical certificates to electronic bookkeeping.
 DEMAT accounts are required by some trading institutions due to the fact they are the most
accurate form of record keeping.
 Dematerialization was designed to offer more security, as well as increased speed, to financial
trades. It has become the norm in bookkeeping for financial institutions.

Q2 – What does Market Capitalisation means ?

Market capitalization, commonly called market cap, is the market value of a publicly traded
company's outstanding shares.

Market capitalization is equal to the share price multiplied by the number of shares

outstanding. Since outstanding stock is bought and sold in public markets, capitalization could
be used as an indicator of public opinion of a company's net worth and is a determining factor
in some forms of stock valuation.

Market capitalisation refers to the total number of outstanding shares of a company in the
market multiplied by the current price of each share. It is a measure of the estimated valuation
of a company.

To make things simpler, let us consider the meaning of market capitalisation with the help of an
example. Suppose that ABC Company has 20,000 outstanding shares in the market and each
share of ABC Company is priced at Rs 20. Then, the market capitalisation of ABC Company will
be calculated as follows:

Outstanding shares x price per share

20,000 x 20 = Rs 4,00,000

Therefore, the market capitalisation of ABC Company is Rs 4,00,000.

The companies that are traded on the stock exchanges can be categorised into three broad
categories: large-cap, mid-cap, and small-cap.

There are 3 types of Capitalisation in Market-

 1. Small Cap - upto Rs 500 crore
2. Mid Cap – from Rs 500 crore up to Rs. 7000 crore
3. Large Cap – from Rs 7000 crore upto Rs. 20000 crore

Q3 – Is market capitalisation same as market value ?

Market capitalization is essentially a synonym for the market value of equity.
Also, since it's simply the number of outstanding shares multiplied price, a company's
market cap is one single incontrovertible figure. Market valuations can vary, depending
on the exact metrics and multiples the analyst uses.
 Market value is a measure of a company's monetary value based on a range of factors,
including its supply of shares and investor demand for those shares. Market value is
calculated based on a number of valuations, such as price-to-earnings ratio, return on
equity, long-term growth potential, and company assets and liabilities.
 Market capitalization vs. market value
Market capitalization reflects the equity value of a company only; it does not necessarily
reflect its true market value. Whereas market capitalization represents a single measure
of what a company is worth, market value takes numerous factors into account to create
a broader picture of a company's financial standing. 

Q-4 What does index mean in stocks ?

An index is an indicator or measure of something. In finance, it typically refers to a
statistical measure of change in a securities market. In the case of financial markets, stock
and bond market indexes consist of a hypothetical portfolio of securities representing a
particular market or a segment of it.
A stock market index is a statistical measure which shows changes taking place in the stock
market. To create an index, a few similar kinds of stocks are chosen from amongst the
securities already listed on the exchange and grouped together.
Some important indexs are –
Nifty
Sensex – Sensetivity index

Q5 – What are 2 Major stock indexes ?