BB0022 CAPITAL AND MONEY MARKET

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ASSIGNMENT

PROGRAM	BBA
DRIVE	SUMMER 2016
SEMESTER	5
SUBJECT CODE & NAME	BB0022 CAPITAL AND MONEY MARKET
BK ID	B0101
CREDITS	4
MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Question.1. Explain the securities market and discuss the methods of underwriting the securities.

Answer:Securities market is a component of the wider financial market where securities can be bought and sold between subjects of the economy, on the basis of demand and supply. Securities markets encompases equity markets, bond markets and derivatives markets where prices can be determined and participants both professional and non professionals can meet.

Securities markets can be split into two levels. Primary markets, where new securities are issued and secondary markets where existing securities can be bought and sold. Secondary markets can further be split into organised exchanges, such stock

Question.2. List out the primary stock exchanges operating in India and the causes of price fluctuations ofshares.

Answer:A stock market, equity market or share market is the aggregation of buyers and sellers (a loose network of economic transactions, not a physical facility or discrete entity) of stocks (also called shares); these may include securities listed on a stock exchange as well as those only traded privately.

What is a Stock?

Stocks in a company provide you a share of the company's future profits in return for the capital invested. For instance, if you buy 1 stock of Apple

Question.3. Explain the meaning, requirements, criteria, advantages and limitations of Listing.

Answer:Various standards that are established by stock exchanges (such as the NYSE) to control membership in the exchange. Companies wishing to issue their stock on a given exchange must meet its listing requirements and continue to do so for as long as they are on the exchange.

Meaning: While the particulars vary by exchange, the two most important categories of requirements deal with the size of the company (as defined by annual income or market capitalization) and the liquidity of the shares (a certain number of shares must already have been issued).

Question.4. Discuss the shortcomings of Indian money markets

Answer:Indian money market is regarded as underdeveloped money market. The main shortcomings of Indian money market are as follows:

1. Absence of Coordination:There is no coordination between organised and unorganized sectors of the money market. At times there is even wasteful competition between them.

Such a situation is extremely harmful for

Question.5. What do you mean by “Bullish and Bearish”. Explain the attitudes of buyers and sellers of calland put options

Answer:Bullish: Investors who believe that a stock price will increase over time are said to be bullish. Investors who buy calls are bullish on the underlying stock. That is, they believe that the stock price will rise and have paid for the right to purchase the stock at a specific price known as the exercise price or strike price. An investor who has sold puts is also considered to be bullish on the stock. The seller of a put has an obligation to buy the stock and, therefore, believes that the stock price will rise.

Question.6. Explain the importance of credit rating agencies. List out the credit rating agencies operating inIndia and describe the rating system.

Answer:A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely interest payments and the likelihood of default. An agency may rate the creditworthiness of issuers of debt obligations, of debt instruments, and in some cases, of the servicers of the underlying debt, but not of individual consumers.

The debt instruments rated by CRAs include government bonds, corporate bonds, CDs, municipal bonds, preferred stock, and collateralized securities, such as mortgage-backed securities and collateralized debt obligations.

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Send your semester & Specialization name to our mail id :

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