Capital Market Product

1

PROJECT REPORT ON

CAPITAL MARKET PRODUCT

IN PARTIAL FULFILMENT OF

THE DEGREE AWARDED AT

BCOM (FINANCIAL MARKET)

SEMESTER-V

SUBMITTED TO

UNIVERSITY OF MUMBAI

FOR THE ACADEMIC YEAR 2015-2016

SUBMITTED BY

NAME TEJAS PAWASKAR

ROLL30

VIVA COLLEGE OF ARTS COMMERCE AND SCIENCE

VIRAR (WEST)

401303

2

PROJECT REPORT ON





SEMESTER-V

SUBMITTED TO



SUBMITTED BY

NAME TEJAS PAWASKAR

ROLL30


VIRAR (WEST)

401303

3

DECLARATION

I hereby declare that the project CAPTIAL MARKET PRODUCT is an original work

prepared by me and is being submitted to UNIVERSITY OF MUMBAI in partial fulfillment of

the degree awarded at BCOM(FINANCAIL MARKET) for the academic year 2015-2016

To the best of my knowledge this report is not been submitted earlier to the university of

Mumbai or any other affiliated college for the fulfillment of BCom (FINANCIAL MARKETS)

degree

Date Name TEJAS PAWASKAR

Place Signature

4

ACKNOWLEDGEMENT

1TEJAS PAWASKAR the student of VIVA collage persuing my degree at

BCOM(FINANCIAL MARKET) would like to pay the credit for all those who helped me in

making project

The first in accomplishment of this project is our Principal DR R D Bhagat Vice Principal

Prof Prajakta Paranjape and project guide Prof RAKHEE OZA and course co-coordinator

Prof VASANTHI R Shenoy

I would like to thank of my friend teacher non-teaching staff who influence directly and

indirectly in making this project to me

5

INDEX

SR

NO

TOPIC PAGE

NO

1 CAPTIAL MARKET PRODUCT 6

2 CO-OPERATE SECURITIES 9

3 DERIVATIVES 20

4 FUTUREFORWARDAND OPTION 24

5 COMMODITY DERIVATIVES 32

6 BONDS 35

7 SHARES 38

8 COLLECTIVE INVESTMENTS SCHEME 40

9 DEBENTURE 43

10 SECURTY IN DIFFERENT JURISDICTIONS 44

11 CONCLUSION 45

12 BIBLIOGRAPHY 46

6

1CAPITAL MARKET PRODUCT

What are financial markets

Financial market is a market where financial instruments are exchanged or traded and

helps in determining the prices of the assets that are traded in and is also called the price

discovery process

1 Organizations that facilitate the trade in financial products For eg Stock exchanges

(NYSE Nasdaq) facilitate the trade in stocks bonds and warrants

2 Coming together of buyer and sellers at a common platform to trade financial products

is termed as financial markets ie stocks and shares are traded between buyers and

sellers in a number of ways including the use of stock exchanges directly between

buyers and sellers etc

Financial markets may be classified on the basis of

bull types of claims ndash debt and equity markets

bull maturity ndash money market and capital market

bull trade ndash spot market and delivery market

bull deals in financial claims ndash primary market and secondary market

Indian Financial Market consists of the following markets

bull Capital Market Securities Market

o Primary capital market

o Secondary capital market

bull Money Market

bull Debt Market

7

Capital market and money market

Financial markets can broadly be divided into money and capital market

Money Market Money market is a market for debt securities that pay off in the short term

usually less than one year for example the market for 90-days treasury bills This market

encompasses the trading and issuance of short term non equity debt instruments including

treasury bills commercial papers bankers acceptance certificates of deposits etc

Capital Market Capital market is a market for long-term debt and equity shares In this

market the capital funds comprising of both equity and debt are issued and traded This

also includes private placement sources of debt and equity as well as organized markets

like stock exchanges Capital market includes financial instruments with more than one

year maturity

Significance of Capital Markets

A well functioning stock market may help the development process in an economy

through the following channels

1 Growth of savings

2 Efficient allocation of investment resources

3 Better utilization of the existing resources

In market economy like India financial market institutions provide the avenue by which

long-term savings are mobilized and channeled into investments Confidence of the

investors in the market is imperative for the growth and development of the market For

any stock market the market Indices is the barometer of its performance and reflects the

prevailing sentiments of the entire economy Stock index is created to provide investors

with the information regarding the average share price in the stock market The ups and

8

downs in the index represent the movement of the equity market These indices need to

represent the return obtained by typical portfolios in the country

Generally the stock price of any company is vulnerable to three types of news

bull Company specific

bull Industry specific

bull Economy specific

An all share index includes stocks from all the sectors of the economy and thus cancels

out the stock and sector specific news and events that affect stock prices (law of portfolio

diversification) and reflect the overall performance of the companyequity market and the

news affecting it

The most important use of an equity market index is as a benchmark for a portfolio of

stocks All diversified portfolios belonging either to retail investors or mutual funds use

the common stock index as a yardstick for their returns Indices are useful in modern

financial application of derivatives

Capital Market Instruments ndash

some of the capital market instruments are

bull Equity

bull Preference shares

bull Debenture Bonds

bull ADRs GDRs

bull Derivatives

9

2Corporate securities

Shares

The total capital of a company may be divided into small units called shares For

example if the required capital of a company is US $500000 and is divided into 50000

units of US $10 each each unit is called a share of face value US $10 A share may be of

any face value depending upon the capital required and the number of shares into which

it is divided The holders of the shares are called share holders The shares can be

purchased or sold only in integral multiples

Equity shares signify ownership in a corporation and represent claim over the financial

assets and earnings of the corporation Shareholders enjoy voting rights and the right to

receive dividends however in case of liquidation they will receive residuals after all the

creditors of the company are settled in full A company may invite investors to subscribe

for the shares by the way of

bull Public issue through prospectus

bull Tender book building process

bull Offer for sale

bull Placement method

bull Rights issue

Stocks

The word stock refers to the old English law tradition where a share in the capital of the

company was not divided into ldquosharesrdquo of fixed denomination but was issued as one

chunk This concept is no more prevalent but the word ldquostockrdquo continues The word

ldquojoint stock companiesrdquo also refers to this tradition

10

Debt Instruments

A contractual arrangement in which the issuer agrees to pay interest and repay the

borrowed amount after a specified period of time is a debt instrument Certain features

common to all debt instruments are

bull Maturity ndash the number of years over which the issuer agrees to meet the

contractual obligations is the term to maturity Debt instruments are classified on

the basis of the time remaining to maturity

bull Par value ndash the face value or principal value of the debt instrument is called the

par value

bull Coupon rate ndash agreed rate of interest that is paid periodically to the investor and is

calculated as a percentage of the face value Some of the debt instruments may

not have an explicit coupon rate for instance zero coupon bonds These bonds are

issued on discount and redeemed at par Thus the difference between the

investorrsquos investment and return is the interest earned Coupon rates may be fixed

for the term or may be variable

bull Call option ndash option available to the issuer specified in the trust indenture to lsquocall

inrsquo the bonds and repay them at pre determined price before maturity Call feature

acts like a ceiling f or payments The issuer may call the bonds before the stated

maturity as it may recognize that the interest rates may fall below the coupon rate

and redeeming the bonds and replacing them with securities of lower coupon rates

will be economically beneficial It is the same as the prepayment option where

the borrower prepays before scheduled payments or slated maturity

o Some bonds are issued with lsquocall protection feature ie they would not be

11

called for a specified period of time

o Similar to the call option of the issuer there is a put option for the investor

to sell the securities back to the issuer at a predetermined price and date

The investor may do so anticipating rise in the interest rates wherein the

investor would liquidate the funds and alternatively invest in place of

higher interest

bull Refunding provisions ndash in case where the issuer may not have cash to redeem the

debt instruments the issuer may issue new debt instrument and use the proceeds to

repay the securities or to exercise the call option

Debt instruments may be of various kinds depending on the repayment

bull Bullet payment ndash instruments where the issuer agrees to repay the entire amount

at the maturity date ie lumpsum payment is called bullet payment

bull Sinking fund payment ndash instruments where the issuer agrees to retire a specified

portion of the debt each year is called sinking fund requirement

bull Amortization ndash instruments where there are scheduled principal repayments

before maturity date are called amortizing instruments

Debentures Bonds

The term Debenture is derived from the Latin word lsquodeberersquo which means lsquoto owe a

debtrsquo A debenture is an acknowledgment of debt taken either from the public or a

particular source A debenture may be viewed as a loan represented as marketable

security The word ldquobondrdquo may be used interchangeably with debentures

Debt instruments with maturity more than 5 years are called lsquobondsrsquo

Yields

Most common method of calculating the yields on debt instrument is the lsquoyield to

maturityrsquo method the formula is as under

12

Main differences between shares and debentures

bull Share money forms a part of the capital of the company The share holders are

part proprietors of the company whereas debentures are mere debt and debenture

holders are just creditors

bull Share holders get dividend only out of profits and in case of insufficient or no

profits they get nothing and debenture holders being creditors get guaranteed

interest as agreed whether the company makes profit or not

bull Share holders are paid after the debenture holders are paid their due first

bull The dividend on shares depends upon the profit of the company but the interest on

debentures is very well fixed at the time of issue itself

bull Shares are not to be paid back by the company whereas debentures have to be

paid back at the end of a fixed period

bull In case the company is wound up the share holders may lose a part or full of their

capital but he debenture holders invariably get back their investment

bull Investment in shares is riskier as it represents residual interest in the company

Debenture being debt is senior

bull Debentures are quite often secured that is a security interest is created on some

assets to back up debentures There is no question of any security in case of

shares

bull Share holders have a right to attend and vote at the meetings of the share holders

whereas debenture holders have no such rights

13

Quasi debt instruments

Preference shares

Preference shares are different from ordinary equity shares Preference share holders have

the following preferential rights

(i) The right to get a fixed rate of dividend before the payment of dividend to the equity

holders

(ii) The right to get back their capital before the equity holders in case of winding up of

the company

Eligibility norms for public issue ICDR Regulations

IPO

Conditions for IPO (all conditions listed below to be satisfied)

bull Net tangible assets of 3 crore in each of the preceding 3 full years of which not

more than 50 are held in monetary assets

bull Track record of distributable profits for 3 out of the immediately preceding 5

years

bull Net worth of 1 crore in each of the preceding three full years

bull Issue size of proposed issue + all previous issues made in the same financial year

does not exceed 5 times its pre-issue net worth as per the audited balance sheet of

the preceding financial year

bull In case of change of name within the last one year 50 of the revenue for the

preceding 1 full year earned by it from the activity indicated by the new name

14

If the issuer does not satisfy any of the condition listed above issuer may make IPO

by satisfying the following

1 Issue through book building

subject to allotment of 50 of net

offer to public to QIB failing

which full subscription monies to

be refunded

O

R

bull 15 of the cost of the project to

be contributed by SCB or PFI of

which not less than 10 from

the appraisers +

bull allotment of 10 of the net


which full subscription monies

to be refunded

2 Minimum post-issue face value

capital of the issuer is 10 crores

O

R

Issuer to provide market-making for 2

yrs from the date of listing of the

specified securities

15

bull Promotersrsquo contribution

o Cannot be less than 20 of the post issue capital

o Maximum not defined but in view of the required minimum public offer as

per Rule 19 (2) (b) of Securities Contracts Regulations promoters

contribution plus any firm allotments cannot exceed 90 or 75 of the issue

size as the case may be (see below)

bull Minimum Public offer By public offer is meant the securities being offered to

public by advertisement exclusive of promotersrsquo contribution and firm allotments

o Rule 19(2)(b) of the Securities Contracts (Regulations) Rules 1957 requires

that the minimum public offer should be 25 of total issued securities should

be offered to public through advertisement

o However a lower public offer of 10 is allowed if the following conditions

are satisfied

1048707 The minimum public offer is Rs 100 crores and the number of

securities being offered to public is at least 20 lakh securities

1048707 The offer is made through mandatory book-building route with

minimum allocation of 60 to QIBs

bull Firm allotment reservations Subject to the minimum public offer norms issuers

are free to make reservations on competitive basis (as defined hereinafter) andor firm

allotments (as defined hereinafter) to various categories of persons for the remaining

part of the issue size

Firm allotment This implies allotment on a firm basis in public issues by an issuing

company Specified Categories for Firm allotment in public issues can be made to the

following

1 Indian and Multilateral Development Financial Institutions

16

2 Indian Mutual Funds

3 Foreign Institutional Investors (including non resident Indians and overseas

corporate bodies)

4 Permanent regular employees of the issuer company ndash maximum 10 of total

proposed issue amount

5 Scheduled Banks

6 Lead Merchant Banker- subject to a ceiling of 5 of the proposed issue

FPO


o In case of FPO the promoters should ensure participation either to the extent

of 20 of the proposed issue or their post-issue share holding must be to the

extent of 20 of the post issue capital Requirement to bring in contribution

from promoters shall be optional for a company listed on a stock exchange for

at least 3 years and having a track record of dividend payment of 3 years

immediately preceding the year of issue

o As for maximum promotersrsquo contribution Rule 19 (2) (b) stated above shall

be applicable

o Participation by promoters in excess of above shall be treated as preferential

allotment to which preferential allotment rules will be applicable As for

preferential allotment rules see Notes under sec 81

bull Net Public offer

o The minimum net public offer shall be as per Rule 19 (2) (b) ndash see above

17

bull Firm allotment reservations

o The issuer companies are free to make reservations on competitive basis (as

defined above) andor firm allotments to various categories of persons

enumerated above for the remaining issue size that is after considering

promotersrsquo contribution and public offer

o The reservation on competitive basis may also be made for retail individual

shareholders (RIS) For meaning of the term RIS see under lsquocategories of

investorsrsquo below

Composite Issue


o promoters have option to contribute either 20 of the proposed issue or 20

of post issue capital

o the right issue component to be excluded while computing the post-issue

capital

bull Others

o The right issue component to be offered to the existing shareholders

o Except the above the rules of allotment under IPO as above shall apply

Qualified Institutional Placement

Another class of issue not being a rights issue which calls for resolution under sec 81

(1A)

Condition for issue-

bull The equity shares of the same class were listed on a stock exchange having

nation-wide trading terminals for a period of at least one year as on the date of

issuance of notice for issue of shares to QIBs

bull The issue should not violate the prescribed minimum public shareholding

18

requirements specified by the listing agreement

Reservation

bull Minimum of 10 percent of specified securities issued shall be allotted to mutual

funds

bull In case the mutual funds do not agree to take shares issued under this chapter

such shares may be allotted to other QIBs

bull However no allotment shall be made under this chapter either directly or

indirectly to any QIB being a promoter or any person related to promoters

Withdrawal of bid not permitted- Investors shall not be allowed to withdraw their bids

after the closure of issue

Number of allottees-

bull minimum number of allottees shall not be less than

o Two where the issue size is less than or equal to Rs 250 crores

o Five where the issue size is greater than Rs 250 crores

bull No single allottee shall be allotted more than 50 of the issue size

Restrictions-

bull Amount raised through the proposed placement + all previous placements made in

the same financial year shall not exceed five times the net worth of the issuer as

per the audited balance sheet of the previous financial year

bull Lock-in-period of one year from the date of allotment except when sold on a

recognised stock exchange

19

Investments by Non- resident Investors

Provisions about investments by non-residents non resident Indians overseas bodies

corporates and other foreign investors are made by the RBI in pursuance of FEMA

provisions An overview is as follows

Foreign investment is freely permitted in almost all sectors in India Under Foreign Direct

Investments (FDI) Scheme investments can be made by non-residents in the shares

convertible debentures of an Indian Company under two routes

bull Automatic Route and

bull Government Route

20

3Derivatives

What are derivatives A derivative picks a risk or volatility in a financial asset

transaction market rate or contingency and creates a product the value of which will

change as per changes in the underlying risk or volatility The idea is that someone may

either try to safeguard against such risk (hedging) or someone may take the risk or may

engage in a trade on the derivative based on the view that they want to execute The risk

that a derivative intends to trade is called underlying

A derivative is a financial instrument whose value depends on the values of basic

underlying variable In the sense derivatives is a financial instrument that offers return

based on the return of some other underlying asset ie the return is derived from another

instrument

The best way will be take examples of uncertainties and the derivatives that can be

structured around the same

bull Stock prices are uncertain - Lot of forwards options or futures contracts are based

on movements in prices of individual stocks or groups of stocks

bull Prices of commodities are uncertain - There are forwards futures and options on

commodities

bull Interest rates are uncertain - There are interest rate swaps and futures

bull Foreign exchange rates are uncertain - There are exchange rate derivatives

bull Weather is uncertain - There are weather derivatives and so on

Derivative products initially emerged as a hedging device against fluctuations in

commodity prices and commodity linked derivatives remained the sole form of such

products for almost three hundred years It was primarily used by the farmers to protect

themselves against fluctuations in the price of their crops From the time it was sown to

21

the time it was ready for harvest farmers would face price uncertainties Through the use

of simple derivative products it was possible for the farmers to partially or fully transfer

price risks by locking in asset prices

From hedging devices derivatives have grown as major trading tool Traders may

execute their views on various underlyings by going long or short on derivatives of

different types

Financial derivatives

Financial derivatives are financial instruments whose prices are derived from the prices

of other financial instruments Although financial derivatives have existed for a

considerable period of time they have become a major force in financial markets only

since the early 1970s In the class of equity derivatives futures and options on stock

indices have gained more popularity than on individual stocks especially among

institutional investors who are major users of index-linked derivatives

Even small investors find these useful due to high correlation of the popular indices with

various portfolios and ease of use

DERIVATIVES PRODUCTS

Some significant derivatives that are of interest to us are depicted in the accompanying

graph

Major types of derivatives

Derivative contracts have several variants Depending upon the market in which

they are traded derivatives are classified as 1) exchange traded and 2) over the counter

The most common variants are forwards futures options and swaps

22

Forwards

A forward contract is a customized contract between two entities where

settlement takes place as a specific date in the future at todayrsquos predetermined price

Ex On 1st June X enters into an agreement to buy 50 bales of cotton for 1st

December at Rs1000 per bale from Y a cotton dealer It is a case of a forward contract

where X has to pay Rs50000 on 1st December to Y and Y has to supply 50 bales of

cotton

Options

Options are of two types ndash call and put Calls give the buyer the right but not the

obligation to buy a given quantity of the underlying asset at a given price on or before a

given future date Puts give the buyer the right but not the obligation to sell a given

quantity of the underlying asset at a given price on or before a given date

Warrants

Options generally have maturity period of three months majority of options that

are traded on exchanges have maximum maturity of nine months Longer-traded options

are called warrants and are generally traded over-the-counter

Leaps

The acronym LEAPS means Long-term Equity Anticipation Securities These are

options having a maturity of up to three years

Baskets

Basket Options are currency-protected options and its return-profile is based on

the average performance of a pre-set basket of underlying assets The basket can be

interest rate equity or commodity related A basket of options is made by purchasing

different options The payout is therefore the addition of each individual option payout

23

Swaps

Swaps are private agreement between two parties to exchange cash flows in the

future according to a pre-arranged formula They can be regarded as portfolio of forward

contracts The two commonly used Swaps are

i) Interest Rate Swaps - A interest rate swap entails swapping only the interest

related cash flows between the parties in the same currency

ii) Currency Swaps - A currency swap is a foreign exchange agreement between

two parties to exchange a given amount of one currency for another and after a

specified period of time to give back the original amount swapped

24

4FUTURES FORWARDS AND OPTIONS

An option is different from futures in several ways At practical level the option buyer

faces an interesting situation He pays for the options in full at the time it is purchased

After this he only has an upside There is no possibility of the options position

generating any further losses to him This is different from futures where one is free to

enter but can generate huge losses This characteristic makes options attractive to many

market participants who trade occasionally who cannot put in the time to closely monitor

their futures position

Buying put options is like buying insurance To buy a put option on Nifty is to buy

insurance which reimburses the full amount to which Nifty drops below the strike price

of the put option This is attractive to traders and to mutual funds creating ldquoguaranteed

return productsrdquo

FORWARDS

A forward contract is an agreement to buy or sell an asset on a specified date for a

specified price One of the parties to the contract assumes a long position and agrees to

buy the underlying asset on a certain specified future date for a certain specified price

The other party assumes a short position and agrees to sell the asset on the same date for

the same price other contract details like delivery date price and quantity are negotiated

bilaterally by the parties to the contract The forward contracts are normally traded

outside the exchange

The salient features of forward contracts are

1048766 They are bilateral contracts and hence exposed to counter-party risk

1048766 Each contract is custom designed and hence is unique in terms of contract size

expiration date and the asset type and quality

25

1048766 The contract price is generally not available in public domain

1048766 On the expiration date the contract has to be settled by delivery of the asset or

net settlement

The forward markets face certain limitations such as

1048766 Lack of centralization of trading

1048766 Illiquidity and

1048766 Counterparty risk

FUTURES

Contract is a standardized transaction taking place on the futures

exchange Futures market was designed to solve the problems that exist in forward

market A futures contract is an agreement between two parties to buy or sell an asset at

a certain time in the future at a certain price but unlike forward contracts the futures

contracts are standardized and exchange traded To facilitate liquidity in the futures

contracts the exchange specifies certain standard quantity and quality of the underlying

instrument that can be delivered and a standard time for such a settlement Futuresrsquo

exchange has a division or subsidiary called a clearing house that performs the specific

responsibilities of paying and collecting daily gains and losses as well as guaranteeing

performance of one party to other A futures contract can be offset prior to maturity by

entering into an equal and opposite transaction More than 99 of futures transactions are

offset this way

Yet another feature is that in a futures contract gains and losses on each partyrsquos position

is credited or charged on a daily basis this process is called daily settlement or marking

to market Any person entering into a futures contract assumes a long or short position

by a small amount to the clearing house called the margin money

26

The standardized items in a futures contract are

1048766 Quantity of the underlying

1048766 Quality of the underlying

1048766 The date and month of delivery

1048766 The units of price quotation and minimum price change

1048766 Location of settlement

FUTURES TERMINOLOGY

1 SPOT PRICE The price at which an asset trades in the spot market

2 FUTURES PRICE The price at which the futures contract trades in the futures

market

3 CONTRACT CYCLE The period over which a contract trades The index futures

contracts on the NSE have one month two months and three months expiry cycles

that expires on the last Thursday of the month Thus a contract which is to expire

in January will expire on the last Thursday of January

4 EXPIRY DATE It is the date specified in the futures contract This is the last day

on which the contract will be traded at the end of which it will cease to exist

5 CONTRACT SIZE It is the quantity of asset that has to be delivered under one

contract For instance the contract size on NSErsquos futures market is 200 Nifties

6 BASIS In the context of financial futures basis can be defined as the futures

price minus the spot price There will be different basis for each delivery month

for each contract In a normal market basis will be positive this reflects that the

futures price exceeds the spot prices

7 COST OF CARRY The relationship between futures price and spot price can be

summarized in terms of what is known as the cost of carry

27

8 INITIAL MARGIN The amount that must be deposited in the margin account at

the time when a futures contract is first entered into is known as initial margin

9 MARK TO MARKET In the futures market at the end of each trading day the

margin account is adjusted to reflect the investorrsquos gain or loss depending upon

the futures closing price This is called Marking-to-market

10 MAINTENANCE MARGIN This is somewhat lower than the initial margin

This is set to ensure that the balance in the margin account never becomes

negative If the balance in the margin account falls below the maintenance

margin the investor receives a margin call and is expected to top up the margin

account to the initial margin level before trading commences on the next day

Stock futures contract

It is a contractual agreement to trade in stock shares of a company on a future date Some

of the basic things in a futures trade as specified by the exchange are

bull Contract size

bull Expiration cycle

bull Trading hours

bull Last trading day

bull Margin requirement

Advantages of stock futures trading

bull Investing in futures is less costly as there is only initial margin money to be

deposited

bull A large array of strategies can be used to hedge and speculate with smaller cash

outlay there is greater liquidity

Disadvantages of stock futures trading

bull The risk of losses is greater than the initial investment of margin money

28

bull The futures contract does not give ownership or voting rights in the equity in

which it is trading

bull There is greater vigilance required because futures trades are marked to market

daily

INDEX DERIVATIVES

Index derivatives are derivative contracts that has index as the underlying The

most popular index derivatives contract is index futures and index options NSErsquos market

index - the SampP CNX Nifty are examples of exchange traded index futures

An index is a broad-based weighted average of prices of selected constituents that

form part of the index The rules for construction of the index are defined by the body

that creates the index Trading in stock index futures was first introduced by the Kansas

City Board of Trade in 1982

Advantages of investing in stock index futures

bull Diversification of the risks as the investor is not investing in a particular stock

bull Flexibility of changing the portfolio and adjusting the exposures to particular

stock index market or industry

OPTIONS

An option is a contract or a provision of a contract that gives one party (the

option holder) the right but not the obligation to perform a specified transaction with

another party (the option issuer or option writer) according to the specified terms The

owner of a property might sell another party an option to purchase the property any time

during the next three months at a specified price For every buyer of an option there must

be a seller The seller is often referred to as the writer As with futures options are

brought into existence by being traded if none is traded none exists conversely there is

29

no limit to the number of option contracts that can be in existence at any time As with

futures the process of closing out options positions will cause contracts to cease to exist

diminishing the total number

Thus an option is the right to buy or sell a specified amount of a financial

instrument at a pre-arranged price on or before a particular date

There are two options which can be exercised

1048766 Call option the right to buy is referred to as a call option

1048766 Put option the right to sell is referred as a put option

OPTION TERMINOLOGY

1 INDEX OPTION These options have the index as the underlying Some

options are European while others are American European style options

can be exercised only on the maturity date of the option which is known

as the expiry date An American style option can be exercised at any time

upto and including the expiry date It is to be noted that the distinction

has nothing to do with geography Both type of the option are traded all

over the world

2 STOCK OPTION Stock options are options on individual stocks A

contract gives the holder the right to buy or sell shares at the specified

price

3 BUYER OF AN OPTION The buyer of an option is the one who by

paying the option premium buys the right but not the obligation to exercise

the options on the sellerwriter

4 WRITER OF AN OPTION The writer of a callput option is the one who

receives the option premium and is thereby obliged to sellbuy the asset if

the buyer exercised on him

30

5 STRIKE PRICE The price specified in the option contract is known as the

strike price or the exercise price

6 lsquoIN THE MONEYrsquo OPTION An lsquoin the moneyrsquo option is an option that

would lead to a positive cash flow to the holder if it was exercised

immediately A call option on the index is said to be in-the-money (ITM)

when the current index stands at a level higher than the strike price (ie

spot pricegt strike price) If the index is much higher than the strike price

the call is said to be deep ITM In the case of a put the put is ITM if the

index is below the strike price

7 lsquoAT THE MONEYrsquo OPTION An lsquoat the moneyrsquo option is an option that

would lead to zero cash flow to the holder if it were exercised

immediately An option on the index is at the money when the current

index equals the strike price(ie spot price = strike price)

8 lsquoOUT OF THE MONEYrsquo OPTION An lsquoout of the moneyrsquo(OTM) option

is an option that would lead to a negative cash flow for the holder if it

were exercised immediately A call option on the index is out of the

money when the current index stands at a level lower than the strike

price(ie spot price lt strike price) If the index is much lower than the

strike price the call is said to be deep OTM In the case of a put the put is

OTM if the index is above the strike price

9 INTRINSIC VALUE OF AN OPTION The option premium can be

broken down into two components - intrinsic value and time value The

intrinsic value of a call is the ITM value of the option that is if the call is

OTM its intrinsic value will be zero

31

10 TIME VALUE OF AN OPTION The time value of an option is the

difference between its premium and its intrinsic value Usually maximum

time value exists when the option is ATM The longer the time to

expiration the greater is an optionrsquos time value or else equal At

expiration an option should have no time value

Factors affecting value of options ndash you would understand this while using the

valuation techniques but the terms are introduced below

bull Price ndash value of the call option is directly proportionate to the change in the price

of the underlying Say for example

bull Time ndash as options expire in future time has an effect on the value of the options

bull Interest rates and Volatility ndash in case where the underlying asset is a bond or

interest rate interest rate volatility would have an impact on the option prices

The statistical or historical volatility (SV) helps measure the past price

movements of the stock and helps in understanding the future volatility of the

stock during the life of the option

32

5Commodity Derivatives

Commodity Derivatives are the first of the derivatives contracts that emerged to hedge

against the risk of the value of the agricultural crops going below the cost of production

Chicago Board of Trade was the first organized exchange established in 1848 to have

started trading in various commodities Chicago Board of Trade and Chicago Mercantile

Exchange are the largest commodities exchanges in the world

It is important to understand the attributes necessary in a commodity derivative contract

a) Commodity should have a high shelf life ndash only if the commodity has storability

durability will the carriers of the stock feel the need for hedging against the price

risks or price fluctuations involved

b) Units should be homogenous ndash the underlying commodity as defined in the

commodity derivative contract should be the same as traded in the cash market to

facilitate actual delivery in the cash market Thus the units of the commodity

should be homogenous

c) Wide and frequent fluctuations in the commodity prices ndash if the price fluctuations

in the cash market are small people would feel less incentivised to hedge or

insure against the price fluctuations and derivatives market would be of no

significance Also if by the inherent attributes of the cash market of the

commodity the cash market of the commodity was such that it would eliminate

the risks of volatility or price fluctuations derivatives market would be of no

significance Taking an oversimplified example if an investor had purchased 100

tons of rice Rs 10 kg in the cash market and is of the view that the prices may

fall in the future he may short a rice future at Rs 10 kg to hedge against the fall

in prices Now if the prices fall to Rs 2 kg the loss that the investor makes in

33

the cash market may be compensated by squaring of the short position thus

eliminating the risk of price fluctuations in the commodity market

Commodity derivative contracts are standardized contracts and are traded as per the

investors needs The needs of the investor may be instrumental or convenience

depending upon the needs the investor would trade in a derivative product Instrumental

risks would relate to price risk reduction and convenience needs would relate to

flexibility in trade or efficient clearing process

Commodity Derivatives in India

Commodity derivatives in India were established by the Cotton Trade Association in

1875 since then the market has suffered from liquidity problems and several regulatory

dogmas However in the recent times the commodity trade has grown significantly and

today there are 25 derivatives exchanges in India which include four national commodity

exchanges National Commodity and Derivatives Exchange (NCDEX) National MultiCommodity

Exchange of India (NCME) National Board of Trade (NBOT) and Multi

Commodity Exchange (MCX)

NCDEX

It is the largest commodity derivatives exchange in India and is the only commodity

exchange promoted by national level institutions NCDEX was incorporated in 2003

under the Companies Act 1956 and is regulated by the Forward Market Commission in

respect of the futures trading in commodities NCDEX is located in Mumbai

34

MCX

MCX is recognised by the government of India and is amongst the worldrsquos top three

bullion exchanges and top four energy exchanges MCXrsquos headquarter is in Mumbai and

facilitates online trading clearing and settlement operations for the commodoties futures

market in the country

35

6Bonds

What Are Bonds

A bond is a debt security similar to an IOU When you purchase a bond you are lending money to a government municipality corporation federal agency or other entity known as the issuer In return for the loan the issuer promises to pay you a specified rate of interest during the life of the bond and to repay the face value of the bond (the principal) when it matures or comes due

Among the types of bonds you can choose from in Uganda are government securities and corporate bonds

Many personal financial advisors recommend that investors maintain a diversified investment portfolio consisting of bonds stocks and cash in varying percentages depending upon individual circumstances and objectives Because bonds typically have a predictable stream of payments and repayment of principal many people invest in them to preserve and increase their capital or to receive dependable interest income Whatever the purpose saving for your childrenrsquos college education or a new home increasing retirement income or any of a number of other financial goals investing in bonds can help you achieve your objectives

InterestRateBonds pay interest that can be fixed floating or payable at maturity Most debt securities carry an interest rate that stays fixed until maturity and is a percentage of the face (principal) amount Typically investors receive interest payments semiannually For example a UShs 1000000 bond with an 8 interest rate will pay investors UShs 80000 a year in payments of UShs 40000 every six months When the bond matures investors receive the full face amount of the bond UShs 1000000

But some sellers and buyers of debt securities prefer having an interest rate that is adjustable and more closely tracks prevailing market rates The interest rate on a floating rate bond is reset periodically in line with changes in a base interest rate index such as the rate on Treasury bills Some bonds have no periodic interest payments Instead the investor receives one payment at maturity that is equal to the purchase price (principal) plus the total interest earned compounded semiannually at the (original) interest rate

Known as zero coupon bonds they are sold at a substantial discount from their face amount For example a bond with a face amount of UShs 2000000 maturing in 20 years might be purchased for about UShs 5050000 At the end of the 20 years the investor will receive UShs 20000000 The difference between UShs 20000000 and UShs 5050000 represents the interest based on an interest rate of 7 which compounds automatically until the bond matures

36

MaturityA bonds maturity refers to the specific future date on which the investors principal will be repaid Bond maturities generally range from one day up to 30 years In some cases bonds have been issued for terms of up to 100 years Maturity ranges are often categorized as follows

Short-term notes maturities of up to five years Intermediate notesbonds maturities of five to 12 years Long-term bonds maturities of 12 or more years

Redemption Features

While the maturity period is a good guide as to how long the bond will be outstanding certain bonds have structures that can substantially change the expected life of the investment

Call Provisions

For example some bonds have redemption or all provisions that allow or require the issuer to repay the investors principal at a specified date before maturity Bonds are commonly called when prevailing interest rates have dropped significantly since the time the bonds were issued Before you buy a bond always ask if there is a call provision and if there is be sure to obtain the yield to call as well as the yield to maturity Bonds with a redemption provision usually have a higher annual return to compensate for the risk that the bonds might be called early

Puts

conversely some bonds have puts which allow the investor the option of requiring the issuer to repurchase the bonds at specified times prior to maturity Investors typically exercise this option when they need cash for some purpose or when interest rates have risen since the bonds were issued They can then reinvest the proceeds at a higher interest rate

Principal Payments and Average Life

In addition mortgage backed securities are typically priced and traded on the basis of their average life rather than their stated maturity When mortgage rates decline homeowners often prepay mortgages which may result in an earlier than expected return of principal to an investor This may reduce the average life of the investment If mortgage rates rise the reverse may be true homeowners will be slow to prepay and investors may find their principal committed longer than expected

Your choice of maturity will depend on when you want or need the principal repaid and the kind of investment you are seeking within your risk tolerance Some individuals might choose short term bonds for their comparative stability and safety although their investment returns will typically be lower than would be the case with long term securities Alternatively investors

37

seeking greater overall returns might be more interested in long term securities despite the fact that their value is more vulnerable to interest rate fluctuations and other market risks as well as credit risk

Yield

Yield is the return you actually earn on the bond based on the price you paid and the interest payment you receive There are basically two types of bond yields you should be aware of current yield and yield to maturity or yield to call Current yield is the annual return on the amount paid for the bond and is derived by dividing the bonds interest payment by its purchase price If you bought at UShs 1000000 and the interest rate is 8 (UShs 80000) the current yield is 8 (UShs 80000 divide UShs 1000000) If you bought at UShs 900000 and the interest rate is 8 (UShs 80000) the current yield is 889 (UShs 80000 divide UShs 900000)

Yield to maturity and yield to call which are considered more meaningful tell you the total return you will receive by holding the bond until it matures or is called It also enables you to compare bonds with different maturities and coupons Yield to maturity equals all the interest you receive from the time you purchase the bond until maturity (including interest on interest at the original purchasing yield) plus any gain (if you purchased the bond below its par or face value) or loss (if you purchased it above its par value) Yield to call is calculated the same way as yield to maturity but assumes that a bond will be called and that the investor will receive face value back at the call date You should ask your investment advisor for the yield to maturity or yield to call on any bond you are considering purchasing Buying a bond based only on current yield may not be sufficient since it may not represent the bonds real value to your portfolio

Market Fluctuations

Price and Yield from the time a bond is originally issued until the day it matures its price in the marketplace will fluctuate according to changes in market conditions or credit quality The constant fluctuation in price is true of individual bonds and true of the entire bond market with every change in the level of interest rates typically having an immediate and predictable effect on the prices of bonds

The Link Between Interest Rates and Maturity

Changes in interest rates dont affect all bonds equally The longer it takes for a bond to mature the greater the risk that prices will fluctuate along the way and that the fluctuations will be greater and the more the investors will expect to be compensated for taking the extra risk There is a direct link between maturity and yield It can best be seen by drawing a line between the yields available on like securities of different maturities from shortest to longest Such a line is called a yield curve

38

7Share

What is a Share

A share (or stock) is a stake in a company When you buy a share you become a part owner or a shareholder of the company

What are the different types of shares

Ordinary shares (also known as equity shares) - these are shares or stocks that give the shareholder part ownership of the company in proportion to the number of shares held The ordinary shareholders have voting rights and can appoint and dismiss directors If the company makes a profit they are entitled to a share of it in the form of dividends if declared which are based on proportionate ownership In the event of liquidation ordinary shareholders are paid last after everyone else who has a claim on the companys assets has been paid

Preference shares- Preference shares bear a fixed annual rate of dividend with priority over all ordinary shares in the distribution of dividends from annual profits and have a prior claim to repayment on winding up the company Shareholders in this category have no voting rights in a company but are given priority with regard to dividends and repayment in the event of winding up

Redeemable Preference shares- These are shares that can be redeemed (paid back to the shareholder) by the company either at fixed dates and prices or on certain specified terms at the discretion of the Board of Directors

Advantages of owning sharesAs a shareholder there are several advantages that come with owning shares These include

Dividends When a company makes a profit the Board of Directors usually gives a percentage of the profit to its shareholders This is known as a dividend In other cases the directors can propose to retain the profits in the company in order to increase its capital These are known as retained earnings Ideally if profits increase from year to year then the dividend should also increase Shares therefore offer the possibility of an increasing income to the investor

Capital growth If the company is growing the value of the shares will also grow Capital Gains When shares are sold at a price that is higher than the price at which they

were purchased this represents a profit This profit is called a capital gain Voting rights Shares give a shareholder the right to attend and vote on important

company policies at the companys Annual General Meetings including making a choice on the directors of the company

Collateral Shares may be accepted as collateral (for example security for a loan) Transferability Shares are negotiable and can be passed on to another person and they

can be inherited

39

Disadvantages of owning sharesMuch as there are good things associated with owning shares there are some considerations that need to be taken on board these include

Share prices can go down or up depending on a number of factors such as the performance of the company the economy demand and supply factors

If the companys profits fall the dividend will fall and if the company makes a loss it may not be able to pay any dividend

If the share prices fall their value lessens and if the company collapses or becomes insolvent the shares become worthless

If the company goes into liquidation shareholders are the last to be paid after all other creditors

Primary market- this refers to the purchase of shares in an Initial Public Offering (IPO) whereby a company offers its shares to members of the public for the first time To buy these shares a Share Application Form (SAF) is obtained from participating brokerdealers and authorised selling agents which is completed by the prospective investor

The Share Application Form (SAF) is then sent to the Lead Broker and Registrar for processing where the share allocation is made Once payment is made a receipt is issued to the purchaser

If the offer is over-subscribed (applications exceeding the number of shares available) the shares available are divided among applicants according to the allotment criteria and the investor then receives a refund for the shares paid for but not allocated

The USE then deposits shares on the Securities Central Depository accounts of successful applicants

Secondary market- At the secondary market shares can only be bought or sold through a licensed brokerdealer that is a firm that buys and sells securities on behalf of investors for a commission or a brokerage fee

The brokerdealer or investment advisor will provide all the necessary advice that is which shares to buy But the ultimate decision to invest your money is up to you the investor Before investing in shares you should be clear about your own financial position and what you hope to achieve from your investment

To sell shares an investor needs to contact a brokerdealer and instruct himher to sell either all or some of your shares

40

8Collective Investment Schemes

What are Collective Investment Schemes

Collective Investment Schemes (CISs) are private financial arrangements They pool resources of many small savers generating a large pool The resources are then invested in various assets like shares bonds property and treasury bills with the sole purpose of generating high returns while minimizing risk through diversification of investments

Collective Investment Schemes (CISs) provide a means for mobilisation of savings and enable small investors to participate in capital markets CISs widen the choice of investment vehicles involve the public in the process of investing in securities through pooling resources together which are then invested by professional managers

Types of CISs

There are currently two types of schemes in Uganda

1 Unit Trust Schemes These are types of schemes where investors buy units which represent the various holdings of the scheme

Ones investment is represented by the units they hold in the scheme The Unit Trust Scheme is established by a trust deed between a fund manager (which must be a body corporate) and a trustee (bank or insurance company) The trust deed spells out the duties and obligations of the fund manager and trustee In a unit trust investments are made on behalf of the unit holders by the unit trust manager but the assets of the scheme are held by the trustee or custodian

The manager purchases the investors unit at the ruling price and the investors money is desposited onto hisher bank account within two days

The main duties of a fund manager include

Marketing the fund Appointing a fund manager to manage investors funds Provide liquidity to the unit holders who wish to sell their investments

The functions of the trustee include the following

Overseeing of the fund Safeguarding the assets of the scheme Ensuring that the fund manager manages the fund according to the trust deed

41

Why invest in unit trusts

It gives you an opportunity to liquidate investments by selling your units back to the manager

Minimises risk by diversifying investments A chance to reap more benefits because of the expertise of proffessional staff Investors can access high-priced markets because of the pooled resources which create a

larger fund

Who Manages CISsThe investments are selected and managed by professionals known as fund managers in the case of Unit Trusts Investors are therefore not involved in the day to day decisions concerning how their money is invested

The investors pay a fixed percentage of the return to the fund manager The scheme therefore makes money by managing other peoples money Investment income and capital gains generated by the scheme are passed on to the investors and are shared in proportion to the investors holding in the CIS

Advantages of Collective Investment SchemesThe attraction of CISs in developed countries has been attributed to five main factors risk access to securities investments cost professional management and regulation

Diversification of Risk- Investors can secure a much wider diversification of risk because these funds usually invest in different investments Studies show that the greater the diversification of a portfolio the lower the risk in relation to the return Those who invest in CISs are therefore seeking to lower risks in relation to their returns

Access to Securities Investments - By investing a small sum (either in a lump sum or on a regular saving basis) an investor through the CIS can achieve a personal portfolio spread over several securities

Lower Transaction Costs- By investing in a CIS investors incur lower costs than if they were to buy and sell a portfolio of individual securities directly This is because transaction costs are generally related to the size of the transaction and investors benefit from the fund managers ability to deal in larger quantities of shares at lower average dealing costs Fund managers can also reallocate portfolios more efficiently than can individual investors

Professional Management- Due to the complexity of analyzing information regarding individual securities most individuals do not have the professional skills to manage their own investments CISs provide full time professional management in a direct and simple form and this is especially important where market information is not widely available

Investor protection- CISs have succeeded in developed markets due to an effective legal and regulatory framework People need to have confidence that their money is protected from fraud theft and other abuses The CIS Act and regulations made under it provide the desired regulatory framework that will protect investors

42

Terms Commonly used in Collective Investment SchemesInvestment advisor A person who provides advice in relation to the company giving the advantages of investment opportunities or information that assists a potential investor to make an investment decision

Fund ManagerIs a person licensed by the Authority to undertake on behalf of the client the management of a portfolio of funds

UnitTrustsA unit trust is an investment scheme that pools savings of the public who share the same financial interests The pooled savings are then invested in securities such as shares bonds and other authorised securities

TrusteeIndividual or company who holds the assets of a collective investment fund on behalf of its investors who are the beneficiaries of the trust

PortfolioFunds managed on behalf of clients at the discretion of a fund manager

Trust DeedAgreement between a Fund Manager and an Authorised Corporate Director (ACD)

43

9Debenture

In corporate finance a debenture is a medium- to long-term debt instrument used by large companies to borrow money at a fixed rate of interest The legal term debenture originally referred to a document that either creates a debt or acknowledges it but in some countries the term is now used interchangeably with bond loan stock or note A debenture is thus like a certificate of loan or a loan bond evidencing the fact that the company is liable to pay a specified amount with interest and although the money raised by the debentures becomes a part of the companys capital structure it does not become share capital Senior debentures get paid before subordinate debentures and there are varying rates of risk and payoff for these categories

Debentures are generally freely transferable by the debenture holder Debenture holders have no rights to vote in the companys general meetings of shareholders but they may have separate meetings or votes eg on changes to the rights attached to the debentures The interest paid to them is a charge against profit in the companys financial statements

Attributes

A movable property Issued by the company in the form of a certificate of indebtedness It generally specifies the date of redemption repayment of principal and interest on

specified dates May or may not create a charge on the assets of the company Corporations in the US often issue bonds of around $1000 while government bonds are

more likely to be $5000

Debentures gave rise to the idea of the rich clipping their coupons which means that a bondholder will present their coupon to the bank and receive a payment each quarter (or in whatever period is specified in the agreement)

There are also other features that minimize risk such as a sinking fund which means that the debtor must pay some of the value of the bond after a specified period of time This decreases risk for the creditors as a hedge against inflation bankruptcy or other risk factors A sinking fund makes the bond less risky and therefore gives it a smaller coupon (or interest payment) There are also options for convertibility which means a creditor may turn their bonds into equity in the company if it does well Companies also reserve the right to call their bonds which mean they can call it sooner than the maturity date Often there is a clause in the contract that allows this for example if a bond issuer wishes to rebuy a 30-year bond at the 25th year they must pay a premium If a bond is called it means that less interest is paid out

Failure to pay a bond effectively means bankruptcy Bondholders who have not received their interest can throw an offending company into bankruptcy or seize its assets if that is stipulated in the contract

44

10Security in different jurisdictions

In the United States debenture refers specifically to an unsecured corporate bond[2] ie a bond that does not have a certain line of income or piece of property or equipment to guarantee repayment of principal upon the bonds maturity Where security is provided for loan stocks or bonds in the US they are termed mortgage bonds

However in the United Kingdom a debenture is usually secured

In Canada a debenture refers to a secured loan instrument where security is generally over the debtors credit but security is not pledged to specific assets Like other secured debts the debenture gives the debtor priority status over unsecured creditors in a bankruptcy however debt instruments where security is pledged to specific assets (such as a bond) receive a higher priority status in a bankruptcy than do debentures

In Asia if repayment is secured by a charge over land the loan document is called a mortgage where repayment is secured by a charge against other assets of the company the document is called a debenture and where no security is involved the document is called a note or unsecured deposit note

Convertibility

There are two types of debentures

1 Convertible debentures which are convertible bonds or bonds that can be converted into equity shares of the issuing company after a predetermined period of time Convertibility is a feature that corporations may add to the bonds they issue to make them more attractive to buyers In other words it is a special feature that a corporate bond may carry As a result of the advantage a buyer gets from the ability to convert convertible bonds typically have lower interest rates than non-convertible corporate bonds

2 Non-convertible debentures which are simply regular debentures cannot be converted into equity shares of the liable company They are debentures without the convertibility feature attached to them As a result they usually carry higher interest rates than their convertible counterparts

45

11Conclusion

Running a successful Mutual Fund requires complete understanding of thepeculiarities of the Indian Stock Market and also the psyche of the small investors Thisstudy has made an attempt to understand the financial behavior of Mutual Fund investorsin connection with the preferences of Brand (AMC) Products Channels etc I observedthat many of people have fear of Mutual Fund They think their money will not be securein Mutual Fund They need the knowledge of Mutual Fund and its related terms Many ofpeople do not have invested in mutual fund due to lack of awareness although they havemoney to invest As the awareness and income is growing the number of mutual fundinvestors are also growingldquoBrandrdquo plays important role for the investment People invest in those Companieswhere they have faith or they are well known with them There are many AMCs in Punjabbut only some are performing well due to Brand awareness Some AMCs are notperforming well although some of the schemes of them are giving good return because ofnot awareness about BrandDistribution channels are also important for the investment in mutual fundFinancial Advisors are the most preferred channel for the investment in mutual fund Theycan change investorsrsquo mind from one investment option to others Many of investorsdirectly invest their money through AMC because they do not have to pay entry load Onlythose people invest directly who know well about mutual fund and its operations and thosehave time

46

12BIBLIOGRAPHY

middot NEWS PAPERS

middot OUTLOOK MONEY

middot TELEVISION CHANNEL (CNBC AAWAJ)

middot MUTUAL FUND HAND BOOK

middot FACT SHEET AND STATEMENT

middot WWWSBIMFCOM

middot WWWMONEYCONTROLCOM

middot WWWAMFIINDIACOM

middot WWWONLINERESEARCHONLINECOM

middot WWW MUTUALFUNDSINDIACOM

47

SECURTY IN DIFFERENT JURISDICTIONS

Attributes


Convertibility

2

PROJECT REPORT ON





SEMESTER-V

SUBMITTED TO



SUBMITTED BY

NAME TEJAS PAWASKAR

ROLL30


VIRAR (WEST)

401303

3

DECLARATION






degree


Place Signature

4

ACKNOWLEDGEMENT



making project






5

INDEX

SR

NO

TOPIC PAGE

NO



3 DERIVATIVES 20



6 BONDS 35

7 SHARES 38


9 DEBENTURE 43


11 CONCLUSION 45

12 BIBLIOGRAPHY 46

6





discovery process
















bull Money Market

bull Debt Market

7











year maturity




1 Growth of savings









8










news affecting it







bull Equity



bull ADRs GDRs

bull Derivatives

9


Shares














bull Offer for sale


bull Rights issue

Stocks





10

Debt Instruments








par value















11






higher interest











Debentures Bonds






Yields



12



















shares



13


Preference shares




holders


the company


IPO





years







14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

3

DECLARATION






degree


Place Signature

4

ACKNOWLEDGEMENT



making project






5

INDEX

SR

NO

TOPIC PAGE

NO



3 DERIVATIVES 20



6 BONDS 35

7 SHARES 38


9 DEBENTURE 43


11 CONCLUSION 45

12 BIBLIOGRAPHY 46

6





discovery process
















bull Money Market

bull Debt Market

7











year maturity




1 Growth of savings









8










news affecting it







bull Equity



bull ADRs GDRs

bull Derivatives

9


Shares














bull Offer for sale


bull Rights issue

Stocks





10

Debt Instruments








par value















11






higher interest











Debentures Bonds






Yields



12



















shares



13


Preference shares




holders


the company


IPO





years







14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

4

ACKNOWLEDGEMENT



making project






5

INDEX

SR

NO

TOPIC PAGE

NO



3 DERIVATIVES 20



6 BONDS 35

7 SHARES 38


9 DEBENTURE 43


11 CONCLUSION 45

12 BIBLIOGRAPHY 46

6





discovery process
















bull Money Market

bull Debt Market

7











year maturity




1 Growth of savings









8










news affecting it







bull Equity



bull ADRs GDRs

bull Derivatives

9


Shares














bull Offer for sale


bull Rights issue

Stocks





10

Debt Instruments








par value















11






higher interest











Debentures Bonds






Yields



12



















shares



13


Preference shares




holders


the company


IPO





years







14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

5

INDEX

SR

NO

TOPIC PAGE

NO



3 DERIVATIVES 20



6 BONDS 35

7 SHARES 38


9 DEBENTURE 43


11 CONCLUSION 45

12 BIBLIOGRAPHY 46

6





discovery process
















bull Money Market

bull Debt Market

7











year maturity




1 Growth of savings









8










news affecting it







bull Equity



bull ADRs GDRs

bull Derivatives

9


Shares














bull Offer for sale


bull Rights issue

Stocks





10

Debt Instruments








par value















11






higher interest











Debentures Bonds






Yields



12



















shares



13


Preference shares




holders


the company


IPO





years







14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

6





discovery process
















bull Money Market

bull Debt Market

7











year maturity




1 Growth of savings









8










news affecting it







bull Equity



bull ADRs GDRs

bull Derivatives

9


Shares














bull Offer for sale


bull Rights issue

Stocks





10

Debt Instruments








par value















11






higher interest











Debentures Bonds






Yields



12



















shares



13


Preference shares




holders


the company


IPO





years







14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

7











year maturity




1 Growth of savings









8










news affecting it







bull Equity



bull ADRs GDRs

bull Derivatives

9


Shares














bull Offer for sale


bull Rights issue

Stocks





10

Debt Instruments








par value















11






higher interest











Debentures Bonds






Yields



12



















shares



13


Preference shares




holders


the company


IPO





years







14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

8










news affecting it







bull Equity



bull ADRs GDRs

bull Derivatives

9


Shares














bull Offer for sale


bull Rights issue

Stocks





10

Debt Instruments








par value















11






higher interest











Debentures Bonds






Yields



12



















shares



13


Preference shares




holders


the company


IPO





years







14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

9


Shares














bull Offer for sale


bull Rights issue

Stocks





10

Debt Instruments








par value















11






higher interest











Debentures Bonds






Yields



12



















shares



13


Preference shares




holders


the company


IPO





years







14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

10

Debt Instruments








par value















11






higher interest











Debentures Bonds






Yields



12



















shares



13


Preference shares




holders


the company


IPO





years







14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

11






higher interest











Debentures Bonds






Yields



12



















shares



13


Preference shares




holders


the company


IPO





years







14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

12



















shares



13


Preference shares




holders


the company


IPO





years







14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

13


Preference shares




holders


the company


IPO





years







14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

14







be refunded

O

R




the appraisers +




to be refunded



O

R




15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

15













are satisfied











following


16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

16



corporate bodies)



5 Scheduled Banks


FPO









be applicable






17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

17









Composite Issue





capital

bull Others





(1A)






18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

18


Reservation


funds












Restrictions-






19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

19










20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

20

3Derivatives










instrument






commodities








21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

21






different types












graph





22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

22

Forwards






cotton

Options





Warrants




Leaps



Baskets





23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

23

Swaps









24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

24













FORWARDS












25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

25



net settlement





FUTURES












offset this way





26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

26







FUTURES TERMINOLOGY



market















27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

27














bull Contract size


bull Trading hours





deposited





28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

28


which it is trading


daily

INDEX DERIVATIVES












OPTIONS








29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

29









OPTION TERMINOLOGY







over the world



price







30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

30

























31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

31
















32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

32

























33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

33
















NCDEX





34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

34

MCX





35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

35

6Bonds

What Are Bonds







36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

36



Redemption Features


Call Provisions


Puts





37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

37


Yield



Market Fluctuations




38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

38

7Share

What is a Share












can be inherited

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

39













40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

40





Types of CISs









41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

41




larger fund









42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

42







43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

43

9Debenture



Attributes







44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

44






Convertibility




45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

45

11Conclusion


46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

46

12BIBLIOGRAPHY

middot NEWS PAPERS





middot WWWSBIMFCOM





47


Attributes


Convertibility

47


Attributes


Convertibility

Capital Market Product

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Transcript of Capital Market Product