Capital Markets & Stock Exchanges
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Indian Economy and Indian Financial System — JAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary function of a capital market?
Capital markets facilitate the raising of long-term funds by companies and governments through the issuance of equity and debt instruments. They channel savings from investors to productive economic activities.
What is a listing agreement between a company and a stock exchange?
Contract binding company to comply with exchange disclosure norms.
Which regulatory body oversees stock exchanges and capital markets in India?
The Securities and Exchange Board of India (SEBI), established in 1992 under the SEBI Act, is the apex regulator for capital markets and stock exchanges in India.
What is a Preferential Allotment of shares?
Private issue of shares to select investors at a fixed price.
What distinguishes the primary market from the secondary market?
The primary market is where new securities are issued for the first time (e.g., IPOs), enabling companies to raise fresh capital. The secondary market is where already-issued securities are bought and sold among investors.
What is the role of an Underwriter in a public issue?
Guarantees subscription of unsubscribed portion of a public issue.
What is an Initial Public Offering (IPO)?
An IPO is the process by which a private company offers its shares to the public for the first time to raise capital. After an IPO, the company's shares are listed and traded on a stock exchange.
What is the face value of a share also known as?
Par value or nominal value of the share.
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