Cover Preface Contents Chapter 1: Introduction Properties of Financial Assets Financial Markets Securities Market National Market International Market Domestic Segment Foreign Segment Money Market Call Market T-bill Market Inter-bank Market Certificates of Deposit Market Ready Forward Contracts (Repo) Market Commercial Paper (CP) Market Inter-Corporate Deposit Market Commercial Bill Market Capital Market Debt Market Equity Market Primary Market Secondary Market Forex Market Spot Market Derivative Market Investments Types of Investments Characteristics of Investment Objectives of Investment Types of Investors Investment vs Speculation Investment vs Gambling Speculation vs Gambling Hedging Summary Concepts Short Questions Essay Questions Chapter 2: Stock Exchanges in India The Bombay Stock Exchange The National Stock Exchange Over the Counter Exchange of India The Inter-connected Stock Exchange of India Stock Exchange Members Functions of Stock Exchange Members Broker/Dealer Market Makers Agency Brokers Stock Indices Computation of Index Secondary Market Secondary Market Trading Trading Limits Value at Risk Margin Additional Volatillity Margin Mark to Market Margin Special Ad hoc Margin Special Margin Gross Exposure Margin Mark to Market Margin Additional Volatillity Margin Special Ad hoc Margin (SAM) Special Margin Ad hoc Margin Opportunities Available for Foreign Investors Investment through Stock Exchanges Summary Concepts Short Questions Essay Questions Appendix 1 Appendix II Appendix III Appendix IV Chapter 3: Stock Market Regulation Securities Exchange Board of India Powers and Functions of SEBI. Legislation Governing SEBI Functions Primary Market Regulation Issue of Shares Pricing by Companies Issuing Securities Promoters' Contribution Other Issue Requirements Pre-issue Obligations Contents of the Prospectus Post-issue Obligations Regulation on Employee Stock Option Scheme (ESOS)/Employee Stock Purchase Scheme (ESPS) Issue of Sweat Equity by a Listed Company Secondary Market Regulations Insider Trading Buyback of Shares Buyback through Tender Offer/Buyback of Odd Lot Specified Securities Buyback from Open Market Buyback through Stock Exchange Buyback through Book Building Substantial Acquisition of Shares or Voting Rights or Control in a Listed Company Bail out Takeovers Regulation for Mutual Funds Regulations on Derivatives Trading Summary Concepts Short Questions Essay Questions Appendix Case Study Chapter 4: Services of Intermediaries Brokers Sub-broker Dealing/Trading Member of a Derivative Segment Investment Management Company Fund Managers Merchant Bankers Issue Managements Advisory Services Financial Services Market Operations Credit Rating Agencies Investment Banks Regulatory Bodies Auditing Bodies Stock Depositories Technology Providers/Internet Providers Bandwidth Optimisation Scalability and Robustness of the Trading System Intergration with Third Party Systems Broadband Narrowband Electronic Communications Networks e-Customer Relationship Managements Summary Concepts Short Questions Essay Questions Appendix Chapter 5: Investment Opportunities Investment Avenues Corporate Securities Equity Shares Rights Issue of Equity Preference Shares Debentures and Bonds Depsitory Receipts (GDRs/ADRs) Warrants Derivatives Deposits. Savings Bank Account with Commercial Banks Bank Fixed Deposits Company Fixed Deposits Post Office Deposits and Certificates Life Insurance Policies Provident Fund Scheme Equity Linked Savings Schemes (ELSSs) Pension Plan Government and Semi-government Securities Mutual Fund Schemes Real Assets Real Estate Bullion Investment Investment Opportunities for Foreign Citizens of Indian Origin Foreign Direct Investment Portfolio Investment Sources of Investment Information Institutions Floating Financial Securities Financial Markets Financial Service Intermediaries Media Summary Concepts Short Questions Essay Questions Appendix I Appendix II Chapter 6: Debt Instruments and Their Valuation Players in the Debt Market Valuation of Debt Instruments Running Yield Simple Yield to Maturity Redemption Yield Holding Period Yield Comparison of Yield Computations Yields to Call/Put Yields on Index Linked Bonds Yield Curves Ascending Yield Curve Descending Yield Curve Risk Management in Bonds Default Risk Reinvestment Risk Purchasing Power Risk Price Risk Liquidity Risk Bond Duration Convexity Dispersion Summary Concepts Short Questions Essay Questions Problems Case Study Chapter 7: Equity Instruments and Their Valuation Share Valuation Earnings Valuation Negative Earnings Due to Cyclical Nature of Industry Negative Earning Due to Unforeseeable Circumstances Negative Earning Due to Poor Managements Persistent Negative Earnings Negative Earnings Due to Early Growth Stage Negative Earnings Due to High Leverage Cost Earnings Forecast Forecasting Earnings Using Statistical Tools Forecast of Annual Versus Quarterly results Revenues Valuation Cash Flows Valuation. Asset Valuation Yield Valuation Member Valuation Valuation of Private Companies Summary Concepts Short Questions Essay Questions Problems Case Study Chapter 8: Derivatives and Their Valuation Understanding Risk Define Risk Policy Risk Measurement Risk Control Control of Price Risk Control of Operating Risk Hedging Instruments Forward Contracts Futures Contracts Forward/Futures Contracts Options Trading in the Futures Contract Daily Margins Maintenance Margins Initial Margins Spread Positions Concept of Basis in Futures Market Financial Futures Stock Index Futures Interest Rate Futures Currency Forward Currency Futures Example-Financial Futures Example-Stock Index Futures Hedge Ratios Hedge Positions for a Portfolio Option Call Option The Profit/Loss Profile at Expiry The Profit/Loss Profile Prior to Expiry Put Options The Profit/Loss Profile at Expiry The Profit/Loss Profile Prior to Expiry Writing Options Exotic Options Warrants Convertible Bonds Swaps Equity Swaps Valuation of Instruments Pricing Futures Stock Index Futures Prices The Black-Scholes Option Pricing Model Variations on the Basic Black-Scholes Mo European-style Call Options on Dividend Paying Shares European-style Call Options on Stock Index European-style Call Options on Futures Valuing an European-style Put Option Computing Volatility Computing Implied Volatility Binomial Option Pricing Model Incorporating Time Value and Dividend Flows Summary Concepts Short Questions Essay Questions Problems Case Study Chapter 9: Fundamental Analysis I: Economic Analysis Economic Analysis Tools for Economic Analysis Gross Domestic Product Consumption Spending Investment Spending. Goverments Expenditure Export Consumption in the Process of Import Distribution Monetary Policy and Liquidity Inflation Interest Rates International Influences Consumer Sentiment Fiscal Policy Long-term Growth Expectations Technology Effect Labour Effect Capital Effect One Contributing Factors Influences on Short-term Expectations Forecasting Models Structural or Cross-sectional Econometric Models Time Series Econometric Models Structural Time Series Models-A Hybrid Applications of Economic Analysis Economic Analysis and International Investment Cross-border Investments International Comparison of Institutional Investors Summary Concepts Short Questions Essay Questions Case Study Chapter 10: Fundamental Analysis II: Industry Analysis Standard Industrial Classification (SIC) Links between the Economy and Industry Sectors The Stock Market and the Business Cycle Data Needs for an Industry Analysis Data Categories Tools for Industry Analysis Cross-sectional Industry Performance Industry Perfomance over Time Differences in Industry Risk Prediction about Market Behaviour Quantitative Industry Analysis Analysing Employment Data Data Selection Estimating the Duration of Analysis Estimating a Base Year Quantitative Tools for Analysing Employment Status Anlysis of Emoluments Data Total Emoluments by Industry Emoluments per Employee by Industry Change in Emolument per Employee by Industry National Comparison of Average Emolument per Employee Input-Output Analysis Industry Earning Data Analysis Infrastructure Sector Indian Textile Industry Spinning Industry Weaving and Knitting Industry Indian Fabric Processing Industry Garment Manufacturing Sector Steel Industry Cyclical Industries