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Securities market is the market which influnces the modern life greatly , The nifty are indefinite to

understand but still they are being used by the people to refer as sensex or securities market
Primary market: the market where in new securites are being issued in lieu of each from an investor
is called as primary market, investments bankers are mostly being used as the instrument of activites
In india Equity market is also called as primary market which functions as per the guidlence of sebi ,
there are three different way which a company can raise its equity capital in the primary marker are
1, public issue, 2. Right issue, 3. Preferential issue, ,4 Global allotment and private placement.
Funtions :1, origination , 2. Underswriting, 3. Distribution
Products of primary market: 1. Equity share, 2. Preference share, 3. Debentures,
Participants:1. Merchant banker, 2. Registartr to the issue, 3. Bankers to the issue, 4. Brokers
Secondary market:a secondary market is the market is which the remaining or the existing securites
are traded betweek the investors , secondary market heko the investors by providing them a
mechanism for trading existing securites , in this market market secuirtes are resold ,
Funtions: 1. Offers orgqainized market and securites 2. Offers liquidity to securities, 3. Offer safety
to funds, 4. Indicate trennd in business cyclr, 5. Facilitates marketing of new issues, 6. Evalautes
securites, 7. Protect the interest investor, 8. Monitor company management
Products: 1. Equity share, 2. Bonds, 3. Debetntures, 4. Commercial papers, 5. Goveremnt secuirites
Partcipants: 1. Stock exchange, 2. Depositors, 3. Registrar to an isue and share transfer agent, 4.
Clearing corporation

Money market: money market is an important constituent of indian financial system, reserve bank
of india defined money market as center for dealings mainly short term character in monetary
assets, it meets the short term requirements of the borrowers and provides liquidity or cash to
lenders,
Components: 1. Call money market, 2. Treasury bill market, 3. Commercial bill market, 4. Certificate
of deposit market, 5. Commerical pepaer. 6. Participation certificates.,7Money market mutual funds
Funtions:money narket expans the supply of funds by producing different typer of credit
instruments, 2. Money market help in controling the seasonal ups and downs in the intrest rates. 3.
Money market help the whole contry by increasing liquidity amount
Major players:1. Life insurance corporation , 2. All sechduled commerial banks,
Defets: 1. Existence of unorganized makret 2. Lack of intergation . 3.non existence of bil makrte, 4.
Highly sensitive call money market
Types of insurance: 4th unit
1. Life insurance, 2. Non lifeinsurence/general insurance
Term insurance Automobile insurance
Whole life insurance Business inurence
Universal insurance Crime insurance
Varible insurance Crop insurance
Adjustment life insurance Travel insurance
Participant life insurance Fire insurance
Buillder risk insurance
Finacianl loss insurence
Benefits and costs of insuence to society
1. Indemnification for loss, 2. Reductiion worried and fears,3. Prevents losses,4. Channe of
investement ,5 provides enhenced credit.
2. Cost of insurance to society , 1. Cost of doing business. 2. Cost of fraudent and inflated
claims.
Principles of insurance:1. Principle of subrogation, 2. Principle of indemntiy. 3. Principle of insurable
interest . 4.principle of utmost good faith. 5. Principle of proximate cause. 6. Pricnple of
contribution.
Functions of insurance: 1. Production. 2. Underwriting A,life insurance. B. property insurance. C.
business opertions.3. rate making.4. managing losses and claims. 5. Investing and finacing.6.
according and record keeping. 7. Miscellaneous functions a, A.legal advisor B. marketing research.
C.Engineering Services. D. human resource management
Insurance as risk management techinque :1. Insurance coverage. 2. Selection of insurer.3. prices of
insurance policeis 4. Negotitaion terms. 5. Periodic review of insurance policy .
Requirements of Insurance: 1. Large number of exposure unite 2. Loss must be determinable and
measureble . 3. The loss must be accidental. 4. Chance of loss must be calculate. 5. Premium should
be economically viable. 6. Loss should not be catastrophic.
Credit rating methodology in india: 5th unit
1.Business risk analysis. 2. Financial risk analysis .3.management risk analysis 4. Fundamental
analysis
Types of credit rating: 1.bond rating 2. Equity rating.3. =commercial paper rating 4. Sovereign rating
Benefits of rating 1.benfits to investor 2.benfits to company 3.benfits to government 4benfits to
finacial intermediaries to broekrs
Credit Agencies:
1.CRISIL (credit rating information services of india ltd .
A. rating services , b. information services.c.advisory services d. performance of CRISIL.
2.ICRA: Investment information and credit rating agenecy of india ltd
A.credit assessment b. general asssessment .c.perfoamce of ICRA
3.CARE:Credit analysis and research ltd
A, credit rating b. information services c. equity research. D.advisory Servicesn 5.publications 6.
Other services like 1. Care loan rating b. credit analysis rating c. interest rate strcture model
Financial Dimensions of credit rating methodology 1.registration of credit rating agencies. 2. Their
general obligations 3. Restrctions on the rating of securites 4. Procedure for inspection and
investigations and 5. Action in case of default
Credit symbols :
CRISIL ICRA CARE
Debenture Long term instrumets inclusive Logn and mediem
of debenture and preference unstruments
shares
Fixed deposits Mediem term instruments Short term instruments
Credit assessment Short term instruements Credit analysis rating
Bond funds Equity Long terms loans
Bank loans Bank line of credit Short term loans
Structered obiligationd Credit assessment Collective investment schemes
Short term investements Insurance companies Credit of instruction entities
1unit
Derivatives characterestivs:
1. It is contract 2. It involves obligations for the parties 3. Nature of contract 4. Size of
the contract 5. No limits on the claims 6. Values derives from the value of under lying
7. They are easily amenable to financial engineering 8. Acts as secondary market
intruments 9. Extent of standardization 10. Help in setting the balance sheet 11.
Have fixed life span 12. Degree of risk
Types of financial derivatives: 1. Exchange traded derivaties 2. Over the counter derivatives
3. Options 4. Forward . 5. Swaps . 6. Futures
Charecterstics of financial services : and objectives
1. Intagibe 2. Customer oriented 3. Inseparable 4. Perishable 5. Dynamic.
Objectives: 1. Fund raising 2. Funds devolping 3. Specialisations 4. Economic growth
5.regulation
Scope of merchant banking 2nd unit
1. New issue market steady growth 2. Foreign investors entry 3. Fluctuations in the
financail instituions policies 4. Debt market devolpments 5.financail intruments
innovations 6.restructring of corporates 7.disinvestment
Sebi guidelines on merchant banking regulations : 1. Regestration 2. Grant of certifcste. 3.
Capital adequacy . 4. Restrcitions on business 5. Number of lead managers 6. Due diligence
certificate 6. Submission of documents 7. Aquistions of shares . 8. Code of conduct 9.
Inspection . 9. Regulations as to default
Funnction of merchant banking: 1. Corporate counselling 2. Project counselling 3. Credit
syndications or loan syndication 4. Issue management 5. Underwriting of public issue 6.
Portifolio manager 7. Financing working capital 8. Negotiate in merger and acquisitions 9.
Venture financing and lease financing 10. Foreign currency financing 11. Other fucntions
Sebi Guidelines to issue management :1.pre issue management A. public issue through
prospects B. marketing and underwriting C. pricing of issues. 2. Post issue management
A. Pre issue obligations B. Post issue obligations guidelines
MERITS AND LIMITATIOSN HIRE PURCHASE SYSTEM(3rd unit
1. Advantage to hire purchaser a, use of expensive goods
Advatange to the hire Advantage to seller Advatange to society
purchaser
Use of expensive goods Increase in sales More production
Easy payment Recovery of installemnt easily Faciilitate in business
Encouragement to savings Establish good relation with Increase in standard of livign
buyer and seller
Possibility of sales of ther
goods
Facility to get capita at lower
rate
Disadvantages to buyers disabdvatege to vendor
Costly Large capital
Risky for hire buyer Difficulty in repossession of goods
Promotion of wasteful competition More expenses for accounting
No right to sale or mortage the goods More expenses for accounting,
Loss on sale of goods

Legal framework hire purchases system


1. Sales of goods act. 2. Contract of sales of goods. 3. Essential ingredients of a sale
4Tax advabtages of hire purchase system 5. Assessment of hire purchaseser 6. Assessment of
owner Hire vendor. 7. Tax planning in hire purchase
Various methods of intrest calculation : a, efffective rate of intrest 2. Sum of years digits method 3.
Straight line method