Who decides the price of an issue? ...........................................................

19
What does „price discovery through Book Building Process‟ mean? ............... 19
What is the main difference between offer of shares through book building and
offer of shares through normal public issue?.............................................. 20
What is Cut-Off Price? ............................................................................. 20
What is the floor price in case of book building? ......................................... 20
What is a Price Band in a book built IPO? .................................................. 20
Who decides the Price Band? .................................................................... 21
What is minimum number of days for which a bid should remain open during
book building? ....................................................................................... 21
Can open outcry system be used for book building? ................................... 21
Can the individual investor use the book building facility to make an
application?........................................................................................... 21
How does one know if shares are allotted in an IPO/offer for sale? What is the
timeframe for getting refund if shares not allotted? .................................... 21
How long does it take to get the shares listed after issue? .......................... 21
What is the role of a „Registrar‟ to an issue? .............................................. 22
Does NSE provide any facility for IPO? ...................................................... 22
What is a Prospectus? ............................................................................. 22
What does „Draft Offer document‟ mean? .................................................. 23
What is an „Abridged Prospectus‟? ............................................................ 23
Who prepares the „Prospectus Offer Documents‟?....................................... 23
What does one mean by „Lock-in‟? ........................................................... 24
What is meant by „Listing of Securities‟? ................................................... 24
What is a „Listing Agreement‟? ................................................................. 24
What does „Delisting of securities‟ mean? .................................................. 24
What is SEBI's Role in an Issue? .............................................................. 24
Does it mean that SEBI recommends an issue? ......................................... 25
Does SEBI tag make one‟s money safe? .................................................... 25
3.2 FOREIGN CAPITAL ISSUANCE ...................................................................... 25
Can companies in India raise foreign currency resources? ........................... 25
What is an American Depository Receipt? .................................................. 25
What is an ADS?..................................................................................... 26
What is meant by Global Depository Receipts? ........................................... 26
4. SECONDARY MARKET _________________________________________27
4.1 INTRODUCTION ..................................................................................... 27
What is meant by Secondary market? ...................................................... 27
What is the role of the Secondary Market? ................................................ 27
What is the difference between the Primary Market and the Secondary Market?
........................................................................................................... 27
4.1.1 Stock Exchange ............................................................................. 28
What is the role of a Stock Exchange in buying and selling shares? .............. 28
What is Demutualisation of stock exchanges? ............................................ 28
How is a demutualised exchange different from a mutual exchange? ............ 28
4.1.2 Stock Trading .................................................................................. 29
What is Screen Based Trading? ................................................................ 29
What is NEAT? ........................................................................................ 29
How to place orders with the broker? ....................................................... 29

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 How does an investor get access to internet based trading facility? .............. 29
What is a Contract Note? ........................................................................ 30
What details are required to be mentioned on the contract note issued by the
stock broker? ........................................................................................ 30
What is the maximum brokerage that a broker can charge? ........................ 30
Why should one trade on a recognized stock exchange only for buying/selling
shares? ................................................................................................. 31
How to know if the broker or sub broker is registered? ............................... 31
What precautions must one take before investing in the stock markets? ....... 31
What Do‟s and Don‟ts should an investor bear in mind when investing in the
stock markets? ...................................................................................... 32
4.2 PRODUCTS IN THE SECONDARY MARKETS........................................................ 34
What are the products dealt in the Secondary Markets? .............................. 34
4.2.1 Equity Investment. ....................................................................... 36
Why should one invest in equities in particular? ......................................... 36
What has been the average return on Equities in India?.............................. 36
Which are the factors that influence the price of a stock? ............................ 37
What is meant by the terms Growth Stock/ Value Stock? ............................ 37
How can one acquire equity shares? ......................................................... 38
What is Bid and Ask price? ...................................................................... 38
What is a Portfolio? ................................................................................ 39
What is Diversification?........................................................................... 39
What are the advantages of having a diversified portfolio? .......................... 39
4.2.2. Debt Investment ............................................................................. 40
What is a „Debt Instrument‟? ................................................................... 40
What are the features of debt instruments? ............................................... 40
What is meant by „Interest‟ payable by a debenture or a bond? ................... 41
What are the Segments in the Debt Market in India? .................................. 41
Who are the Participants in the Debt Market? ............................................ 41
Are bonds rated for their credit quality? .................................................... 41
How can one acquire securities in the debt market? ................................... 41
5. DERIVATIVES ________________________________________________42
What are Types of Derivatives?................................................................ 42
What is an „Option Premium‟? .................................................................. 42
What is „Commodity Exchange‟? .............................................................. 43
What is meant by „Commodity‟? ............................................................... 43
What is Commodity derivatives market? ................................................... 43
What is the difference between Commodity and Financial derivatives? .......... 43
6. DEPOSITORY _________________________________________________44
How is a depository similar to a bank? ...................................................... 44
Which are the depositories in India? ......................................................... 44
What are the benefits of participation in a depository? ................................ 44
Who is a Depository Participant (DP)?....................................................... 45
Does one need to keep any minimum balance of securities in his account with
his DP? .................................................................................................. 45
What is an ISIN?.................................................................................... 45
What is a Custodian? .............................................................................. 45

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 How can one convert physical holding into electronic holding i.e. how can one
dematerialise securities? ......................................................................... 46
Can odd lot shares be dematerialised? ...................................................... 46
Do dematerialised shares have distinctive numbers? .................................. 46
Can electronic holdings be converted into Physical certificates?.................... 46
Can one dematerialise his debt instruments, mutual fund units, government
securities in his demat account? .............................................................. 46
7. MUTUAL FUNDS ______________________________________________47
What is the Regulatory Body for Mutual Funds? ......................................... 47
What are the benefits of investing in Mutual Funds? ................................... 47
What is NAV? ......................................................................................... 48
Are there any risks involved in investing in Mutual Funds? .......................... 48
What are the different types of Mutual funds? ........................................... 49
What are the different investment plans that Mutual Funds offer? ................ 52
What are the rights that are available to a Mutual Fund holder in India? ....... 52
What is a Fund Offer document? .............................................................. 53
What is Active Fund Management? ........................................................... 53
What is Passive Fund Management? .......................................................... 54
What is an ETF?...................................................................................... 55
8. MISCELLANEOUS ................................................................................. 56
8.1 CORPORATE ACTIONS................................................................................ 56
What are Corporate Actions? ................................................................... 56
What is meant by „Dividend‟ declared by companies? ................................. 56
What is meant by Dividend yield? ............................................................ 57
What is a Stock Split? ............................................................................. 57
Why do companies announce Stock Split? ................................................. 58
What is Buyback of Shares? .................................................................... 59
8.2 INDEX ................................................................................................. 59
What is the Nifty index? .......................................................................... 59
8.3 CLEARING & SETTLEMENT AND REDRESSAL ....................................................... 60
What is a Clearing Corporation? ............................................................... 60
What is Rolling Settlement?..................................................................... 60
What is Pay-in and Pay-out?.................................................................... 60
What is an Auction? ................................................................................ 61
What is a Book-closure/Record date? ....................................................... 61
What is a No-delivery period? .................................................................. 61
What is an Ex-dividend date? .................................................................. 61
What is an Ex-date? ............................................................................... 62
What recourses are available to investor/client for redressing his grievances?62
What is Arbitration? ............................................................................... 62
What is an Investor Protection Fund? ....................................................... 62
9. CONCEPTS & MODES OF ANALYSIS ..................................................... 63
What is Simple Interest? ......................................................................... 63
What is Compound Interest? ................................................................... 64
What is meant by the Time Value of Money? ............................................. 66
How is time value of money computed? .................................................... 69