Ch 6 Chapterwise PYQ

Secondary Market

The place where transactions happen in shares or debentures subsequent to their primary offering.

Primary Market

The market where new shares are issued and sold to investors for the first time.

Venture Capitalists

Individuals or firms that invest in startup companies and small businesses with perceived long-term growth potential.

Angel Investors

Affluent individuals who provide capital for startups and early-stage companies, usually in exchange for convertible debt or ownership equity.

Organization of Financial Markets

Includes primary and secondary markets where financial resources are mobilized and allocated.

Public Issue

The process by which a company offers its shares to the public through a prospectus.

Rights Issue

A method of raising additional finance from existing shareholders by offering them securities in proportion to their current holding.

Private Placement

The sale of securities to a limited number of accredited investors rather than the general public.

Initial Public Offering (IPO)

The first time a company offers its shares to the public in the primary market.

Financial Intermediation

The process of transferring funds from surplus units (savers) to deficit units (borrowers) through financial institutions.

Importance of Capital Markets

They mobilize financial resources, promote economic growth, and facilitate access to funding for businesses.

Role of Stock Exchange

Provides a platform for trading securities, ensures liquidity, and maintains market integrity.

Venture Capital Stages

Includes seed capital, startup financing, and second-round financing, each catering to different phases of company growth.

Securities and Exchange Board of India (SEBI)

The regulatory authority that oversees and promotes the securities market in India.

Venture Capital

Private equity investment made into startup companies or small businesses with high growth potential.

Seed Capital

The initial funding used to begin creating a business or a product.

Importance of Financial Markets

Facilitates investment and savings, promotes economic growth, and provides businesses with funds for expansion.

Liberalization of Financial Markets

The process of reducing government restrictions, allowing for increased competition and efficiency.

Capital Appreciation

An increase in the value of an asset or investment over time.

Investee Firms

Companies in which venture capitalists invest, often in exchange for equity.

Financial Instruments

Contracts that can be traded, typically representing an ownership position, a creditor relationship, or rights to ownership.

Liquidity

The ease with which an asset can be converted into cash without affecting its market price.

Market Valuation

The process of determining the current worth of a company based on its share price.

Equity Financing

The process of raising capital through the sale of shares in a company.

Debt Financing

The process of raising funds through borrowing, typically in the form of loans or bonds.

Quotation Lists

Lists published by stock exchanges indicating the prices of securities based on the supply and demand.

Professional Investors

Individuals or institutions that invest on behalf of clients or fund holders.

Institutional Investors

Organizations that invest large sums of money on behalf of their clients, such as banks, insurance companies, or pension funds.

Economic Growth

An increase in the production of goods and services in an economy over a certain period.

Pro-rata Basis

A method of proportionately sharing an allocation or distribution according to a specified rate.

Exclusivity in Financing

A situation where investment opportunities are offered to a select, limited group of investors.

Capital Markets Regulation

Government-imposed regulations that govern how capital markets operate.

Market Liquidity

The degree to which an asset can be quickly bought or sold in the market without affecting its price.

Financial Reporting Requirements

Regulations that govern how companies report their financial performance.

High-Risk Investments

Investments that carry a greater chance of losing value but may offer higher potential returns.

Market Demand

The willingness and ability of consumers to purchase a good or service at a certain price.

Entrepreneurial Financing Sources

Various means available for entrepreneurs to raise funds, including equity, debts, and venture capital.