Primary Markets

Q.

What Is a Capital Market and Its Features?

Q.

What are the advantage of screen based trading system?

Q.

_________ is a market for lending & borrowing of short term funds.

Q. market is also known as New Issue Market.

1. Primary
2. Secondary
3. Money

Q.

Discuss in detail the type of market which deals in previously issued securities.

Q.

What are the functions of a Stock Exchange?

Q.

Which of the following statements is not true with regard to the primary market?

1. It is also known as the old issues market.

2. It deals with new securities being issued for the first time.

3. It facilitates the transfer of investible funds from savers to entrepreneurs.

Q.

It is a market for short-term funds, which deals in monetary assets whose period of maturity is up to one year. Find the Answer at BYJUS

1. Secondary market

2. Capital market

3. Primary market

4. Money market

Q.

Which of the following participants represent the capital market?

1. Commercial banks

2. Stock exchanges

3. Development banks

4. All of the above

Q.

___ market directly contributes to the capital market.

1. Primary

2. Capital

3. Money

4. None of these

Q.

'Efficient functioning of stock exchange creates a conducive climate for active and growing primary market for new issues as well as for an active and healthy secondary market.' In the light of this statement state any three functions of a stock exchange.

Q.

'Stock exchange not only contributes to the economic growth, but performs many other functions.' Explain any three such functions.

Q.

Give an example of an Unorganised money market.

Q.

What is Factoring?

Q.

Sike Ltd., a reputed industrial machines manufacturer, needs rupees twenty crores as additional capital to expand the business. Mr. Amit Joshi, Chief Executive Officer (CEO) of the company, wants to raise funds through equity. The Finance Manager, Mr. Narinder Singh, suggested that the shares may be sold to the public through intermediaries, as the same will be less expensive. Name the method through which the company decided to raise additional capital.

1. Offer through Prospectus

2. Offer for Sale

3. Private Placement

4. Right Issue

Q.

What Are the Types of Capital Markets?

Q. Identify the market highlighted in following statement.
This market deals in instrument whose maturity is upto one year.

Q.

___are known as a new issue market as it is the market for new long-term capital securities issued by the company.

1. Primary market

2. Secondary market

3. Money market

4. Capital market

Q. Identify the market highlighted in following statement.
It is also known as Stock Exchange and deals in sale and purchase of previously issued securities.

Q.

NSE commenced futures trading in the year

1. 1999

2. 2000

3. 2001

4. 2002

Q. Primary procedure in trading on a Stock Exchange is _______.

1. opening 'Demat' Account with Depository
2. placing the Order
3. selection of a registered broker
4. executing the Order

Q. Sika Ltd., a reputed industrial machines manufacturer, needs Rupees twenty crores as additional capital to expand the business. Mr. Amit Joshi, the Chief Executive Officer (CEO) of the company wants to raise funds through equity. The Fiance Manager, Mr. Narinder Singh, suggested that the shares may be sold to investing public through intermediaries, as the same will be less expansive.
Name the method through which the company decide to raise additional capital.

Q.

‘R’ Limited is a real estate company which was formed in 1950. In about 56 years of its existence the company has managed to carve out a niche for itself in this sector. Lately, this sector is witnessing a boom due to the fact that the Indian economy is on the rise. The incomes of middle class are rising. More people can afford to buy homes for themselves due to easy availability of loans and accompanying tax concessions.

To expand its business in India and abroad the company is weighing various options to raise money through equity offerings in India. Whether to tap equity or debt. market whether to raise money from domestic market or international market or Combination of both? Whether to raise the necessary finance from money market or capital market. It is also planning to list itself in New York Stock Exchange to raise money through ADR’s. To make its offerings attractive it is planning to offer host of financial plans products to its stakeholders and investors and also expand it’s listing at NSE after complying with the regulations of SEBI.

(i) What benefits will the company derive from listing at NSE?
(ii) What are the regulations of SEBI that the company must comply with?
(iii) How does the SEBI exercise control over ‘R’ Limited in the interest of investors?

Q. Identify the market highlighted in following statement.
This market directly contributes to capital market.

Q. Name the common instruments of capital market.

Q. Only new companies can issue securities in the primary market.

1. True
2. False

Q. Primary market can be used as a platform to issue equity or preference shares.

1. False
2. True

Q. These days, the development of a country is also judged by its system of transferring finance from the sector where it is in surplus to the sector where it is needed the most. To give strength to the economy, SEBI is undertaking measures to develop the capital market. In addition to this , there is another market in which unsecured and short-term debt instruments are actively traded every day. These markets together help the savers and inventors in directing the available funds into their most productive investment opportunity.
(a) Name the function being performed by the market in the above case.
(b) Name the market segment other than the capital market segment in which unsecured and short-term debt instruments are traded. Also, give any three points of difference between the two.

Q. A prospectus is a document issued by a company to impart information about its issue to the public.

1. True
2. False

Q. In today's commercial world stock exchange performs vital role. Do you agree? Give reason to support your answer.