Page 29 - DMGT512_FINANCIAL_INSTITUTIONS_AND_SERVICES
P. 29
Financial Institutions and Services
Notes 4. The secondary market value of a stock or a bond is different from their ...............
5. With the rights issue, .............. have the privilege to buy a specified number of new shares.
6. The ................ markets play a market place for the bonds that are already issued in the
primary market.
7. A financial market can be defined as the market in which financial .............. are created or
transferred.
8. The financial market promotes the savings of the economy, providing an effective channel
for transmitting the .........................
9. Financial Instruments represent a claim to the payment of a sum of money sometime in
the .........................
10. The capital market is the market for securities, where companies and governments can
raise ..................... funds.
11. The issue is a ....................., the investors get the issue directly from the company.
12. The rights issue is a special form of shelf registration for .................. companies.
13. The resale value of the bonds in the secondary market is based on the .................. at that
very time when the sale goes through.
14. Banks have the freedom to issue ..................... depending on their requirements.
15. CP is a note in evidence of the debt obligation of the ...................
16. The market where investment funds like bonds, equities and mortgages are traded is
known as the .................. market.
2.7 Review Questions
1. What do you mean by financial markets?
2. Analyse the discussion in the unit carefully and tell the difference between the capital and
money market else than the former being a market for long-term assets and the latter
being for short-term.
3. What are the instruments of money market that a middle class bread earner would generally
prefer and why?
4. Do the capital markets exist only for big corporate houses? To which market will the
transaction belong in which an individual goes to a commercial bank for a 20 year housing
loan?
5. Discuss the advantages/disadvantageous that you/your acquaintance faced due to availing
a loan from unorganized money market.
6. Find how can a company admit its Commercial Paper in NSDL and discuss the process.
7. Credit risk depends on both internal and external factors. Identify some such external as
well as internal factors.
8. Which is the instrument that is issued for automatic monetization of debt? Analyse its
importance.
9. Why would it be desirable to avoid an excessively conservative regulation of the risk
sensitivity in a regulatory capital regime?
24 LOVELY PROFESSIONAL UNIVERSITY
