Q1) List 10 reasons for movement in SENSEX, NIFTY, Sector or an

Individual share price up or down.

Various reasons for the movement in SENSEX, NIFTY, Sector or Individual share price up or
down are as follows:

1. Demand and supply forces prevailing in the market.

2. FII investment as well as sell off in the market.
3. Economic stability or instability of the country.
4. Change in political condition of the country.
5. Change in monetary reform and regulatory system of the country.
6. Fluctuation in commodities like gold, crude oil, etc.
7. Increase and Decrease in FDI allowable margin in particular sector.
8. Announcement of banking reforms on – acquisition, revision of SLR and CRR & rising
of dividend ceiling.
9. Hike in interest rate & Threat of inflation.
10. Monsoon sets in India.

Q.2 Classify the 30 shares in the SENSEX and 50 shares in NIFTY into
relevant sectors
Company BSE NSE Sector
Listed Listed
ABB Ltd.   NSE ELECTRICAL EQUIPMENT
ACC Ltd. BSE NSE CEMENT AND CEMENT
PRODUCTS
Ambuja Cements Ltd.   NSE CEMENT AND CEMENT
PRODUCTS
Axis Bank Ltd.   NSE BANKS
Bharti Airtel Ltd. BSE NSE TELECOMMUNICATION -
SERVICES
Bharat Heavy Electricals Ltd. BSE NSE ELECTRICAL EQUIPMENT
Bharat Petroleum Corporation Ltd.   NSE REFINERIES
Cairn India Ltd.   NSE OIL
EXPLORATION/PRODUCTI
ON
Cipla Ltd. BSE NSE PHARMACEUTICALS
DLF Ltd. BSE NSE CONSTRUCTION
GAIL (India) Ltd.   NSE GAS
HCL Technologies Ltd.   NSE COMPUTERS - SOFTWARE
Housing Development Finance BSE NSE FINANCE - HOUSING
Corporation Ltd.
HDFC Bank Ltd. BSE NSE BANKS
Hero Honda Motors Ltd. BSE NSE AUTOMOBILES - 2 AND 3
WHEELERS
Hindalco Industries Ltd. BSE NSE ALUMINIUM
Hindustan Unilever Ltd. BSE NSE DIVERSIFIED
ICICI Bank Ltd. BSE NSE BANKS
Idea Cellular Ltd.   NSE TELECOMMUNICATION -
SERVICES
Infrastructure Development Finance   NSE FINANCIAL INSTITUTION
Co. Ltd.
Infosys Technologies Ltd. BSE NSE COMPUTERS - SOFTWARE
I T C Ltd. BSE NSE CIGARETTES
Jindal Steel & Power Ltd. BSE NSE STEEL AND STEEL
PRODUCTS
Jaiprakash Associates Ltd. BSE NSE DIVERSIFIED
Kotak Mahindra Bank Ltd.   NSE BANKS
Larsen & Toubro Ltd. BSE NSE ENGINEERING
Mahindra & Mahindra Ltd. BSE NSE AUTOMOBILES - 4
WHEELERS
Maruti Suzuki India Ltd. BSE NSE AUTOMOBILES - 4
WHEELERS
NTPC Ltd. BSE NSE POWER
Oil & Natural Gas Corporation Ltd. BSE NSE OIL
EXPLORATION/PRODUCTI
ON
Punjab National Bank   NSE BANKS
Power Grid Corporation of India Ltd.   NSE POWER
Ranbaxy Laboratories Ltd.   NSE PHARMACEUTICALS
Reliance Communications Ltd. BSE NSE TELECOMMUNICATION -
SERVICES
Reliance Capital Ltd.   NSE FINANCE
Reliance Industries Ltd. BSE NSE REFINERIES
Reliance Infrastructure Ltd. BSE NSE POWER
Reliance Power Ltd.   NSE POWER
Steel Authority of India Ltd.   NSE STEEL AND STEEL
PRODUCTS
State Bank of India BSE NSE BANKS
Siemens Ltd.   NSE ELECTRICAL EQUIPMENT
Sterlite Industries (India) Ltd. BSE NSE METALS
Sun Pharmaceutical Industries Ltd.   NSE PHARMACEUTICALS
Suzlon Energy Ltd.   NSE ELECTRICAL EQUIPMENT
Tata Motors Ltd. BSE NSE AUTOMOBILES - 4
WHEELERS
Tata Power Co. Ltd. BSE NSE POWER
Tata Steel Ltd. BSE NSE STEEL AND STEEL
 PRODUCTS
Tata Consultancy Services Ltd. BSE NSE COMPUTERS - SOFTWARE
Unitech Ltd.   NSE CONSTRUCTION
Wipro Ltd. BSE NSE COMPUTERS - SOFTWARE

What Are A Group Shares ,B Group Shares, T, Z, And Penny Stocks?

ANS. GROUP "A" SHARES

These are referred to as “Cleaned Securities” or “Specified shares". The

facility for carrying forward a transaction from one account period to
another is available for these shares. Group "A" shares represent
companies, with huge amount of capital, and equally a large scope for
investment. These shares are frequently traded and command higher
price earning multiples. The scripts in this group are classified on the
basis of equity capital, market capitalization, number of years of listing
on the exchange, public shareholding, floating stock and trading volume
etc. EXAMPLE:JET AIRWAYS,SBI,IDEA CELLULAR.UNITECH.

2. GROUP "B" SHARES

These are referred to as “Non cleaned securities” or “Non-specified

shares”. For these groups facility of carrying forward is not available.
Whenever a share is moved from Group "B" to Group "A" its market
price rises; likewise, when a share is shifted from Group "A" to Group
"B", its market price declines. There are some criteria and guide lines,
laid down by stock exchange, for shifting stocks from the non-specified
list to the specified list.

3. GROUP “C” SHARES

Under group “C”, only odd lots and permitted securities are included. A
number of shares that are less then the market lot are known as odd lots.
Old lots have settlement once in a fortnight.

Penny stock:
A stock that trades at a relatively low price and market capitalization,
usually outside of the major market exchanges. These types of stocks
are generally considered to be highly speculative and high risk because
of their lack of liquidity, large bid-ask spreads, small capitalization
and limited following and disclosure. They will often trade over the
counter through the OTCBB and pink sheets.they are those stocks that
trade at a relatively low price and market capitalization usually outside
the major stock exchanges. This are stocks which are traded below their
paid up value. So if the share of a company whose paid up value is Rs.10
is trading at Rs.5 it is known as penny stock. The volume in such stocks
is low. These are generally considered dangerous because they have low
volumes and are easier to manipulate by the promoter and other
speculators
Group 'T' shares termed as the trade to trade group this category
comprises of shares which have to be settled in delivery for all buys and
sells and square off of bought and sold positions during the day is not
permitted. This is a part of the surveillance from the BSE to counter any
awkward unwarranted movements in such scripts. Eg: Mobiletel
'Z' Group category comprises of shares of the companies which does
not comply with the rules and regulations of the Stock exchange and are
at times suspended from trading.

Q.4 What is a Mutual Fund?

A Mutual Fund is a trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is then invested in capital market instruments such as
shares, ebentures and other securities. The income earned through these investments and the
capital appreciation realized are shared by its unit holders in proportion to the number of units
owned by them. Thus,
a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to
invest in a diversified, professionally managed basket of securities at a relatively low cost.

http://finance.indiamart.com/india_business_information/types_of_schemes_mutual_funds.html

Types of Mutual Funds Schemes in India

Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial position, risk
tolerance and return expectations etc. thus mutual funds has Variety of flavors, Being a
collection of many stocks, an investors can go for picking a mutual fund might be easy. There
are over hundreds of mutual funds scheme to choose from. It is easier to think of mutual funds in
categories, mentioned below.

Overview of existing schemes existed in mutual fund category: BY STRUCTURE

1. Open - Ended Schemes:

An open-end fund is one that is available for subscription all through the year. These do not have
a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV")
related prices. The key feature of open-end schemes is liquidity.

2. Close - Ended Schemes:

These schemes have a pre-specified maturity period. One can invest directly in the scheme at the
time of the initial issue. Depending on the structure of the scheme there are two exit options
available to an investor after the initial offer period closes. Investors can transact (buy or sell) the
units of the scheme on the stock exchanges where they are listed. The market price at the stock
exchanges could vary from the net asset value (NAV) of the scheme on account of demand and
supply situation, expectations of unitholder and other market factors. Alternatively some close-
ended schemes provide an additional option of selling the units directly to the Mutual Fund
through periodic repurchase at the schemes NAV; however one cannot buy units and can only
sell units during the liquidity window. SEBI Regulations ensure that at least one of the two exit
routes is provided to the investor.

3. Interval Schemes:

Interval Schemes are that scheme, which combines the features of open-ended and close-ended
schemes. The units may be traded on the stock exchange or may be open for sale or redemption
during pre-determined intervals at NAV related prices.

The risk return trade-off indicates that if investor is willing to take higher risk then
correspondingly he can expect higher returns and vise versa if he pertains to lower risk
instruments, which would be satisfied by lower returns.  For example, if an investors opt for
bank FD, which provide moderate return with minimal risk. But as he moves ahead to invest in
capital protected funds and the profit-bonds that give out more return which is slightly higher as
compared to the bank deposits but the risk involved also increases in the same proportion.

Thus investors choose mutual funds as their primary means of investing, as Mutual funds
provide professional management, diversification, convenience and liquidity. That doesn’t mean
mutual fund investments risk free. This is because the money that is pooled in are not invested
only in debts funds which are less riskier but are also invested in the stock markets which
involves a higher risk but can expect higher returns. Hedge fund involves a very high risk since it
is mostly traded in the derivatives market which is considered very volatile.

Overview of existing schemes existed in mutual fund category: BY NATURE

1. Equity fund:
These funds invest a maximum part of their corpus into equities holdings. The structure of the
fund may vary different for different schemes and the fund manager’s outlook on different
stocks. The Equity Funds are sub-classified depending upon their investment objective, as
follows:

 Diversified Equity Funds

 Mid-Cap Funds
 Sector Specific Funds
 Tax Savings Funds (ELSS)

Equity investments are meant for a longer time horizon, thus Equity funds rank high on the risk-
return matrix.

2. Debt funds:

The objective of these Funds is to invest in debt papers. Government authorities, private
companies, banks and financial institutions are some of the major issuers of debt papers. By
investing in debt instruments, these funds ensure low risk and provide stable income to the
investors. Debt funds are further classified as:

 Gilt Funds: Invest their corpus in securities issued by Government, popularly known as
Government of India debt papers. These Funds carry zero Default risk but are associated
with Interest Rate risk. These schemes are safer as they invest in papers backed by
Government.

 Income Funds: Invest a major portion into various debt instruments such as bonds,
corporate debentures and Government securities.

 MIPs: Invests maximum of their total corpus in debt instruments while they take
minimum exposure in equities. It gets benefit of both equity and debt market. These
scheme ranks slightly high on the risk-return matrix when compared with other debt
schemes.
  Short Term Plans (STPs): Meant for investment horizon for three to six months. These
funds primarily invest in short term papers like Certificate of Deposits (CDs) and
Commercial Papers (CPs). Some portion of the corpus is also invested in corporate
debentures.

 Liquid Funds: Also known as Money Market Schemes, These funds provides easy
liquidity and preservation of capital. These schemes invest in short-term instruments like
Treasury Bills, inter-bank call money market, CPs and CDs. These funds are meant for
short-term cash management of corporate houses and are meant for an investment
horizon of 1day to 3 months. These schemes rank low on risk-return matrix and are
considered to be the safest amongst all categories of mutual funds.

3. Balanced funds:

As the name suggest they, are a mix of both equity and debt funds. They invest in both equities
and fixed income securities, which are in line with pre-defined investment objective of the
scheme. These schemes aim to provide investors with the best of both the worlds. Equity part
provides growth and the debt part provides stability in returns.
Further the mutual funds can be broadly classified on the basis of investment parameter viz,
Each category of funds is backed by an investment philosophy, which is pre-defined in the
objectives of the fund. The investor can align his own investment needs with the funds objective
and invest accordingly.

By investment objective:

 Growth Schemes: Growth Schemes are also known as equity schemes. The aim of these
schemes is to provide capital appreciation over medium to long term. These schemes
normally invest a major part of their fund in equities and are willing to bear short-term
decline in value for possible future appreciation.

 Income Schemes:Income Schemes are also known as debt schemes. The aim of these
schemes is to provide regular and steady income to investors. These schemes generally
invest in fixed income securities such as bonds and corporate debentures. Capital
appreciation in such schemes may be limited.

 Balanced Schemes: Balanced Schemes aim to provide both growth and income by
periodically distributing a part of the income and capital gains they earn. These schemes
invest in both shares and fixed income securities, in the proportion indicated in their offer
documents (normally 50:50).

 Money Market Schemes: Money Market Schemes aim to provide easy liquidity,
preservation of capital and moderate income. These schemes generally invest in safer,
 short-term instruments, such as treasury bills, certificates of deposit, commercial paper
and inter-bank call money.

Other schemes

 Tax Saving Schemes:

Tax-saving schemes offer tax rebates to the investors under tax laws prescribed from time to
time. Under Sec.88 of the Income Tax Act, contributions made to any Equity Linked Savings
Scheme (ELSS) are eligible for rebate.

 Index Schemes:

Index schemes attempt to replicate the performance of a particular index such as the BSE Sensex
or the NSE 50. The portfolio of these schemes will consist of only those stocks that constitute the
index. The percentage of each stock to the total holding will be identical to the stocks index
weightage. And hence, the returns from such schemes would be more or less equivalent to those
of the Index.

 Sector Specific Schemes:

These are the funds/schemes which invest in the securities of only those sectors or industries as
specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods
(FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of
the respective sectors/industries. While these funds may give higher returns, they are more risky
compared to diversified funds. Investors need to keep a watch on the performance of those
sectors/industries and must exit at an appropriate time.

http://www.mutualfundsindia.com/mfbasic.asp

What is Balanced fund

Q.5 what are proportions in an IPO for Retail investors, Institutional

investors, QIB, etc.
More than 35% of the net offer to the public shall be available for allocation to
retail individual investors

More than 15% of the net offer to the public shall be available for allocation to
non‐institutional investors

Less than 50% of the net offer to the public shall be available for allocation
to Qualified Institutional Buyers
Q6.List the names of INDEX`s the following countries
Country Index
Germany DAX
UK FTSE
France CAC
Australia ALL ORDINARIES
Japan NIKKEI 225
New NZX All Index, NZX 50, NZX SciTech
Zealand
Russia RTS Index, RTS Standard Index
China Shanghai Composite
Brazil BOVESPA
Canada TSX Venture Composite Index
South Africa FTSE/JSE All share index, FTSE/JSE Top 40 Index
Bahrain Bahrain All Share index, Dow Jones Bahrain Index, Esterad
Index
Kuwait KSE Market Index
Zimbabwe Zimbabwe Industrial Index, Zimbabwe Mining Index
Venezuela Caracas Stock Index, IBC index
Saudi SASEIDX
Arabia
South Korea KOSPI
Singapore Straits Times
Hongkong Hang Seng
Iceland ICEXI
Portugal PSI20, Dow Jones Portugal Stock Index
Greece Athex Composite Share Price Index, DJ Greece Stock Index
Spain IBEX, DJ Spain Stock Index

Q.7 List the exchange rates of the above countries vis-a-vis Indian Rupee.
Country Currency Rate
Germany Euro 60.1786
UK Pound Sterling 71.7261
France Euro 60.1786
Australia Australian Dollar 41.8032
Japan Japanese Yen 41.8032
New Zealand New Zealand Dollar 33.8534
Russia Russian Ruble 1.54081
China Yuan 7.03672
Brazil Brazilian Real 27.1042
Canada Canadian Dollar 46.063
South Africa South African Rand 6.30608
Bahrain Bahraini Dinar 126.903
Kuwait Kuwaiti Dinar 164.945
Zimbabwe Zimbabwe Dollar 0.1275
Venezuela Venezuelan Bolivar 0.0111
Saudi Arabia Saudi Riyal 12.4776
South Korea South-Korean Won 0.03886
Singapore Singapore Dollar 33.7965
Hong Kong Hong Kong Dollar 6.01043
Iceland Iceland Krona 0.3639
Portugal Euro 60.1786
Greece Euro 60.1786
Spain Euro 60.1786

Q.8 Prepare a trend line of the crude prices and Gold prices, Sensex for last 5
years.
Q-9) Give India’s GDP, Inflation, Fiscal deficit, IIP nos., Forex reserves,
balance of Payment and Interest rates trend from 2005 to 2010 on a yearly
basis.
http://www.indexmundi.com/india/gdp_real_growth_rate.html

Yea
GDP - real growth rate Percent Change
r
2003 4.30 %  
2004 8.30 % 93.02 %
2005 6.20 % -25.30 %
2006 8.40 % 35.48 %
2007 9.20 % 9.52 %
2008 9.00 % -2.17 %
2009 7.40 % -17.78 %
2010 6.50 % -12.16 %

INFLATION RATE

Year Inflation rate (consumer prices) Percent Change

2003 5.40 %  
2004 3.80 % -29.63 %
2005 4.20 % 10.53 %
2006 4.20 % 0.00 %
2007 5.30 % 26.19 %
2008 6.40 % 20.75 %
2009 8.30 % 29.69 %
2010 10.70 % 28.92 %
Year Industrial production growth rate Percent Change
2003 6.00 %  
2004 6.50 % 8.33 %
2005 7.40 % 13.85 %
2006 7.90 % 6.76 %
2007 7.50 % -5.06 %
 2008 8.50 % 13.33 %
2009 4.80 % -43.53 %
2010 7.60 % 58.33 %

Yea
Reserves of foreign exchange and gold Rank Percent Change
r
2004 $102,300,000,000 6  
2005 $126,000,000,000 5 23.17 %
2006 $136,000,000,000 6 7.94 %
2007 $165,000,000,000 6 21.32 %
2008 $275,000,000,000 4 66.67 %
2009 $256,400,000,000 5 -6.76 %
2010 $287,500,000,000 4 12.13 %

Definition: This entry gives the dollar value for the stock of all financial assets that are available
to the central monetary authority for use in meeting a country's balance of payments needs as of
the end-date of the period specified. This category includes not only foreign currency and gold,
but also a country's holdings of Special Drawing Rights in the International Monetary Fund, and
its reserve position in the Fund.

http://indiabudget.nic.in/

FISCAL DEFICIT YEAR TREND

2005-06 4.1%

2006-07 3.5%
 2007-08 2.7%

2008-2009 6.0%

2009-2010 6.7%

Yea Commercial bank prime lending

Rank Percent Change Date of Information
r rate
2008 13.02 64   31 December 2007
2010 13.31 59 2.23 % 31 December 2008

Definition: This entry provides a simple average of annualized interest rates commercial banks
charge on new loans, denominated in the national currency, to their most credit-worthy
customers.

Q.10Which 20 countries have the highest GDP in the world

Rank Countries GDP

1 Unite States $14,260,000,000,000

2 China $8,789,000,000,000

3 Japan $4,137,000,000,000

4 India $3,560,000,000,000

5 Germany $2,811,000,000,000

6 United Kingdon $2,149,000,000,000

7 Russia $2,116,000,000,000

8 France $2,110,000,000,000

9 Brazil $2,025,000,000,000

10 Italy $1,760,000,000,000

11 Mexico $1,482,000,000,000
 12 Spain $1,368,000,000,000

13 South Korea $1,356,000,000,000

14 Canada $1,285,000,000,000

15 Indonesia $969,200,000,000

16 Iran $876,000,000,000

17 Turkey $863,300,000,000

18 Australia $824,300,000,000

19 Taiwan $717,700,000,000

20 Poland $690,100,000,000

Q.11 What is GILTS

Long-term fixed income debt security (bond) issued by the UK government and traded on the
London stock exchange (or LSE, now called the International stock exchange of the United
Kingdom and Republic of Ireland or ISE). Its name comes from the past practice of gilding the
edges of a security's pages.

Q.12 What is sovereign debt ?

Government debt. Under the doctrine of sovereign immunity, the repayment of sovereign debt
cannot be forced by the creditors and it is thus subject to compulsory rescheduling, interest rate
reduction, or even repudiation. The only protection available to the creditors is threat of the loss
of credibility and lowering of the international standing (the sovereign debt rating) of the country
which may make it much more difficult to borrow in the future.

http://www.businessdictionary.com/definition/sovereign-debt.html

Q.13 What is Fiscal deficit

Fiscal deficit is an economic phenomenon, where the Government's total expenditure surpasses
the revenue generated . It is the difference between the government's total receipts (excluding
borrowing) and total expenditure. Fiscal deficit gives the signal to the government about the total
borrowing requirements from all sources.

http://www.economywatch.com/budget/india/fiscal-deficit.html

Q14.What is EURODOLLAR, EUROLIBOR

Dollar-denominated deposits not subject to U.S. banking regulations were held almost
exclusively in Europe; hence the name eurodollars. These deposits are still mostly held in
Europe, but they're also held in such countries as the Bahamas, Canada, the Cayman Islands,
Hong Kong, Japan, the Netherlands Antilles, Panama, and Singapore. Regardless of where they
are held, such deposits are referred to as eurodollars.

Since the eurodollar market is relatively free of regulation, banks in the eurodollar market can
operate on narrower margins than banks in the United States. Thus, the eurodollar market has
expanded largely as a means of avoiding the regulatory costs involved in dollar-denominated
financial intermediation.

http://www.investopedia.com/terms/e/eurodollar.asp

The Euro LIBOR is based on the average lending rates of 16 banks. These bank rates are
available to the public through the British Bankers' Association. Euro LIBOR exists mainly for
continuity purposes in swap contracts dating back to pre-euro times and is not very commonly
used.

http://www.investopedia.com/terms/e/eurolibor.asp

Q15. What is P/E ratio. Explain its significance and its upward downward
movement
The P/E is sometimes referred to as the "multiple", because it shows how much investors are
willing to pay per dollar of earnings. If a company were currently trading at a multiple (P/E) of
20, the interpretation is that an investor is willing to pay $20 for $1 of  current earnings.

It is important that investors note an important problem that arises with the P/E measure, and to
avoid basing a decision on this measure alone. The denominator (earnings) is based on an
accounting measure of earnings that is susceptible to forms of manipulation, making the quality
of the P/E only as good as the quality of the underlying earnings number.
http://www.investopedia.com/terms/p/price-earningsratio.asp

The signifance of P/E ratio is that

The value shows how the price of the stock relates to how well the company is doing
earningswise. Earnings in this case is Net Income after taxes, depreciation, and amortization.
This would be opposed to a company's Gross Profit. A P/E ratio is just another tool that investors
and analysts use to determine whether a stock is overvalued or undervalued and whether or not is
is a good stock to buy/hold or to sell.

http://www.answerbag.com/q_view/6020

Q.16 What is stop loss. What is Circuit and its types? How are Circuits
calculated for each type of Category of shares like A group, B group, etc.
A client’s order to his broker to sell a share if its market price falls to a certain level below the
current price. It is a means of protecting one’s profits, or reducing one’s loss, while waiting for
the market to recover. For example, one may have bought TISCO at Rs 300. The price rise to Rs
500, and is expected to rise, further. The investor wishes to protect his profit already made while
waiting for further rise. He may therefore give a stop loss order to his broker to sell at Rs. 450, so
that his entire profit does not melt away.

http://www.sharemarketbasics.com/Terms/Stop-Loss.php

In the context of stock markets, circuit is the price limit or range, outside which the stock price
can't go.
For example, let's say closing price of X stock yesterday was 100 Rs. The applicable circuit limit
for X is 5%. In this circumstances, the price of X can't go above 105 (5% above previous close)
and below 95 (5% below previous close).

Please note that this limit is different for different stocks. For some stocks, the limit may be 5%,
while for some stocks, it may be 10% or 20% also. For a newly listed company also, there is a
circuit limit of 20% from its issue price.

http://in.answers.yahoo.com/question/index?qid=20070831220810AAvfiiC

Index wide circuit Limit

The index-based market-wide circuit breaker system applies at 3 stages of the index movement,
either way viz. at 10%, 15% and 20%. Thesecircuit breakers when triggered bring about a
coordinated trading halt in all equity and equity derivative markets nationwide. The market-wide
circuit breakers are triggered by movement of either the BSE Sensex or the NSE S&P CNX
Nifty, whichever is breached earlier. In case of a 10% movement of either of these indices, there
would be a one-hour market halt if the movement takes place before 1:00 p.m. In case the
movement takes place at or after 1:00 p.m. but before 2:30 p.m. there would be trading halt for ½
hour. In case movement takes place at or after 2:30 p.m. there will be no trading halt at the 10%
level and market shall continue trading. In case if the market hits 10% before 1 p.m. then as
explained there would be a one hour halt in trading and after resumption of trade in case if the
market hits 15% in either index, then there shall be a two-hour halt. If the 15% trigger is reached
on or after 1:00p.m. but before 2:00 p.m., there shall be a one-hour halt. If the 15% trigger is
reached on or after 2:00 p.m. the trading shall halt for the remaining part of the day. As
explained if the market fails to resume at 10% then the next limit is placed at 15% and finally at
20%. In case if market fails to resume from 15% and if it hits 20% irrespective of the time, the
trading shall be halt for remaining part of the day.

Stock wise circuit limits

Both NSE and BSE have implemented the circuit limit system on the stocks. They have applied
the stock wise circuit limit system at four levels i.e. 2%, 5%, 10% and 20%. Circuit limits like
any other concept have both pros and cons. On the positive side, with the presence of circuit
filters, the traders/investors’ fear of erosion of wealth is not rapid when compared to not having
circuit limits. However, it may not be true with in all the cases. Many times, the stock might see
a rise due to announcement of any corporate action. In that case, the rise of stock beyond a limit
might be genuine but still, due to application of this limit the trading in stock is held. The need
for circuit-filters can be questioned on several grounds. For instance, empirical evidence on the
effectiveness of price limits, circuit-breakers and trading halts is ambiguous. But in the case of
specific situations where it is clear that the equilibrium value of the asset will change, then it
makes no sense to havecircuit breakers.

http://www.stockmarketindia.net/how-sebi-regulation-on-circuit-breakers-work/

Q.17 What ratios are important for decision making to invest in a Script of a
listed company.
Earnings per share: A high EPS in comparison to competitors EPS or a steadily increasing ratio
are encouraging factors to invest in a company's stocks.

Return on Equity: This is calculated to verify if a company is using its capital efficiently to
generate earnings. A growing return on equity ratio is a good sign.

P/E or Price Earnings ratio: The ratio indicates the amount an investor will pay in return for a
rupee's earnings in the company. A higher P/E ratio indicates that the stock is in more demand as
compared to competitor's stock.

Dividend Payout Ratio: It compares the dividend paid by the company to the net earnings for
the period. An increasing dividend payout ratio over the years is an indicator of organization's
growth. While deciding between stocks of different companies, it is advisable to buy stock of a
company having a higher dividend payout ratio, if other factors affecting stocks are same.
Total return on stock: Although not a ratio, it is important to know the total returns on your
investments. This number incorporates changes in stock prices since it was purchased.

Debt Equity Ratio: This shows the total debt of a company in relation to the amount of equity of
stockholders. This ratio will help you understand the financial leverage of a company. How
much debt does ABC Ltd. have for every rupee of equity?

A high debt equity ratio implies that the company uses large amounts of loans / borrowings in its
business. This can affect the company's ability to raise further debt and increase the cost of
borrowing funds in the future. A ratio higher than 50% may also suggest liquidity crunch in a
company.

http://www.rediff.com/money/2010/apr/15perfin-things-to-learn-before-you-invest-in-stocks.htm

Q.18 Enlist all possible avenues of Investments in India and in the Rest of the
World.

Current Rate Maturity Liquidity /

Instruments of Return Risk Period Marketability Tax Incentives Suitable For
Contribution
Maturity 15 eligible for
years with deduction from
PPF (Public 8% Long Term
early gross total income
Provident compounded NIL NIL and Safety of
withdrawal under Income Tax
Fund annually Capital
facility from Section 80C and
7thyear accrued interest
tax-free
Contribution
eligible for
NSC deduction from Medium
8%
(National Maturity 6 gross total income Term and
compounded NIL NIL
Savings years under Income Tax Safety of
semi-annually
Certificate) Section 80C and Capital
Accrued interest
taxable
Medium to
Not Long Term
Stocks High High High Dividend Tax-Free
Applicable and Wealth
Building
Non- Short to
Convertible 8%-10% Low 6-8 years Average NIL medium
Debentures Term and for
 regular
income
Medium to
Mutual Fund
Not Long Term
Equity High High High Dividend Tax-Free
Applicable and Wealth
Schemes
Building
Medium to
Mutual Fund
Not Long Term
Debt Medium Low High Dividend Tax-Free
Applicable and Safety of
Schemes
Capital
Short to
Medium
Bank Interest income
6%-8% Low 3-5 years High Term and for
Deposits taxable
regular
income
House Not Medium to
Moderate Low High Various incentives
Property Applicable Long Term
Not Medium to
Gold Moderate Average Average NIL
Applicable Long Term
NPS (New Suitable for
Pension Moderate Average Retirement
Scheme) Planning

Q.19 what are the commodity indexes and exchanges in INDIA called as.
Explain the top 5 frequently traded commodities in INDIA.
Multi Commodity Exchange (MCX)

National commodity & Derivatives Exchange Ltd (NCDEX)

National Multi Commodity Exchange of India Ltd (NMCE)

Indian Commodity Exchange Ltd (ICEX)

1. Copper
2. Crude Oil
3. Gold
4. Nickle
5. Silver

http://nse2rich.com/top-10-mcx-oi-commodity-future-top-traded-commodity/