{"id":33080,"date":"2022-10-21T16:26:20","date_gmt":"2022-10-21T10:56:20","guid":{"rendered":"https:\/\/tsboardsolutions.com\/?p=33080"},"modified":"2022-11-16T14:53:15","modified_gmt":"2022-11-16T09:23:15","slug":"ts-inter-2nd-year-commerce-study-material-chapter-2","status":"publish","type":"post","link":"https:\/\/tsboardsolutions.com\/ts-inter-2nd-year-commerce-study-material-chapter-2\/","title":{"rendered":"TS Inter 2nd Year Commerce Study Material Chapter 2 Stock Exchange"},"content":{"rendered":"
Telangana TSBIE\u00a0TS Inter 2nd Year Commerce Study Material<\/a> 2nd Lesson Stock Exchange Textbook Questions and Answers.<\/p>\n Long Answer Type Questions<\/span><\/p>\n Question 1. Definition : “Security exchanges are market places where securities that have been listed thereon may be bought and sold either for investment or speculation”. – “Pyle\u201d<\/p>\n Functions of Stock Exchange : 2) Provides information regarding prices : 3) Protects investors wealth : 4) Clearing House : 5) Provides liquidity : 6) Helps to raise new capital : 7) Acts as a Barometer : 8) Increases credit worthiness of company : 9) Minimises the dangers of speculation : 10) Facilitates speculation : <\/p>\n Question 2. Significance of Stock Exchange : A) To the Investors :<\/p>\n B) To the company :<\/p>\n C) To the society :<\/p>\n Question 3. A new company may not able to submit some of the above documents and it will not be an objecion for enlisting.<\/p>\n After submission of application along with the above documents by the company, the stock exchange scrutinizes the application, if stock exchange is statisfied with the particulars field, it may inform the company to execute a listing agreement. The agreement contains the obligations and restrictions which listing entail.<\/p>\n The central iisting authority has been set up in the year 2003 by’SBI for ensuring unifrom and standard practices for listing the securities in all India stock exchanges. It will have a check on the operators in small stock exchanges that have lenient listing norms.<\/p>\n <\/p>\n Question 4. SEBI is managed by its members which consists of Functtions of SEBI: It drafts regulations in its legislative capacity (quasi legislative), it conducts investigation and enforcement action in its executive function (quasi judicial) and it passes rulings and orders in its judicial capacity (quasi executive). These functions may be summarised as :<\/p>\n Powers : Question 5. Types of speculators : 1. Bull :<\/p>\n 2. Bear :<\/p>\n 3. Stag :<\/p>\n 4. Lameduck :<\/p>\n <\/p>\n Question 6. Features of BSE :<\/p>\n The National Stock Exchange (NSE) was incorporated in November, 1992. It is a “country wide screen based online trading system” and has international standards.<\/p>\n Features of NSE :<\/p>\n Question 7. Role played by stock brokers in financial markets : I. Buying :<\/p>\n 2. Selling :<\/p>\n 3. Research and Adivce :<\/p>\n 4. Personalized Service :<\/p>\n 5. Margin Financing :<\/p>\n 6. Invest in other Asset Class : 7. Marketing : <\/p>\n Question 8. The Stock Broker services are needed to facilitate the buying and selling of stocks at the stock markets, on behalf of irivesors. A part from facilitating the buying selling of stocks from the stock market, Stock Brokers also offer a gamut of services to their clients such as :<\/p>\n 1. To Provide Advisory Services : 2. To Offer Limited Banking Services : 3. To Support Other Investment Services : 4. To maintain Email Support Services : 5. To communicate through Phone\/Toll Free Numbers : 6. To Offer Live Chat Support : 7. To Leave a Message on their Website : 8. To Educate through Discussion forums : 9. To Offer Knowledge Base and. Video Tutorials : Thus, the services of stock broker are quite essential in trading the stock of joint stock companies.<\/p>\n Short Answer Type Questions<\/span><\/p>\n Question 1. Features of NSE :<\/p>\n Question 2. Features of BSE :<\/p>\n <\/p>\n Question 3. Bears : Question 4. Aims of listing the securities :<\/p>\n Question 5. In a demutualised stock exchange, three separate sets of people own the exchange, manage it and use its services, The owners usually appoint Board of Directors to manage the exchange, by professionals. The brokers or members are totally different from ownership and management. The ownership rights are freely transferable. Trading rights are acquired surrendered transparently.<\/p>\n Under this organisation structure, membership cards do not exist. Demutualisation of exchanges means segregating the ownership from management. This move was necessitated by the fact that brokers in the management of the stock exchange were misusing their position for personal gains.<\/p>\n Question 6. <\/p>\n Very Short Answer Type Questions<\/span><\/p>\n Question 1. <\/p>\n Question 2. Question 3. Question 4. Question 5. Question 6. Question 7. Question 8. <\/p>\n Question 9. Question 10. Telangana TSBIE\u00a0TS Inter 2nd Year Commerce Study Material 2nd Lesson Stock Exchange Textbook Questions and Answers. TS Inter 2nd Year Commerce Study Material 2nd Lesson Stock Exchange Long Answer Type Questions Question 1. What is stock exchange? Explain its functions. Answer: Introduction : Stock exchange is an organized secondary market, where the listed secu-rities are … Read more<\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[26],"tags":[],"yoast_head":"\nTS Inter 2nd Year Commerce Study Material 2nd Lesson Stock Exchange<\/h2>\n
\nWhat is stock exchange? Explain its functions.
\nAnswer:
\nIntroduction :
\nStock exchange is an organized secondary market, where the listed secu-rities are bought and sold by the investors.<\/p>\n
\n“Stock exchange is an association, organization or body of individuals, whether incorporated or not, established for the purpose of assisting, regulating and controlling business in buying, selling and dealing in securities”. – The Securities Contracts Act 1956<\/p>\n
\n1) Provides infrastructure for trading :
\nIn the stock exchange, instantaneously trading gets executed. It draws investment by providing ready and continuous market for securities.<\/p>\n
\nIt gives sensible information through reliable sources and publishers to investors about the prices of securities. The proposed investor knows the quotation and the investor knows the price of his holdings.<\/p>\n
\nIt protect the interests and wealth of investors through the enforcement of its rules and regulations.<\/p>\n
\nWithout clearing house one will find lot of trades mismatched. It act on behalf of both buyer and seller and helps in trading of securities.<\/p>\n
\nThe holder of securities can easily encash the securities by selling them to the buyer whenever he wants.<\/p>\n
\nThe requirement of additional capital of an existing company can be raised by issuing the rights shares, through stock exchange.<\/p>\n
\nAn efficient stock exchange acts as a Barometer of business conditions in the country.<\/p>\n
\nA company which got its shares to be listed in the stock exchange enjoys good reputation.<\/p>\n
\nBy following rules and regulations of the Acts, it minimises the dangers of speculative dealings and price manipulations.<\/p>\n
\nStock exchange facilitates speculation thereby businessman can speculate and earn profits from fluctuations in security prices.<\/p>\n
\nExplain he significance of stock exchange.
\nAnswer:
\nIntroduction :
\nThe stock exchange is a market for the purchase and sale of second hand securities. It is the central place where industrial and financial securities are brought and sold. It is the place where a buyer of a security can find a seller or a seller can find a buyer.<\/p>\n
\nThe importance and need of stock exchange can be identified through its benefits to the investors, company and society.<\/p>\n\n
\n
\n
\nWhat is the procedure of listing securities?
\nAnswer:
\nIntroduction :
\nA company with minimum issued capital of \u20b9 3 crores of which at least \u20b9 1.8 crore (60%) is offered to the public can apply for listing in the prescribed preforma along with the following documents.<\/p>\n\n
\nWhat is SEBI? What are its functions and powers?
\nAnswer:
\nSEBI means securities and Exchanges Board of India. SEBI come into existence through the SEBI Act, 1992 by the Indian Parliament and was given statutory powers, to overcome the undesivable practices in the stock exchange. In the year 1995, SEBI was given additional statutory powers by Government of India through an amendment to SEBI Actg 1992.<\/p>\n
\na) The chairman who is nominated by Government of India.
\nb) Two members i.e. officers from Union Finance Ministry.
\nc) One member from the RBI.
\nd) The remaining 5 members (nominatged by Union Government of India.<\/p>\n
\nSEBI has three functions rolled into one body i.e.,<\/p>\n\n
\n
\nFor the discharging of its functions efficienctly, SEBI is vested with the following powers.<\/p>\n\n
\nExplain the various types of stock exchange speculators.
\nAnswer:
\nA) Stock Exchange Speculators :
\nPersons who make profits by trading securities for short term purpose are known as stock exchange speculators. They accept high risk and do not take or give delivery of securities. The difference between buying and selling is their profit.<\/p>\n
\nDepending upon the nature of speculation, the speculators may be called as bulls, bears, stag and lameduck.<\/p>\n\n
\n
\n
\n
\nExplain the features of BSE and NSE.
\nAnswer:
\nThe Bombay Stock Exchange (BSE) is formerly known as “Native Stock and Share Bro-kers Association”, which was established in the year 1877. The aim of association was to support and protect the character and status of brokers, to promote fair practices and to discourage malpractices.<\/p>\n\n
\n
\nWho is a stock broker? Explain the role played by him in the financial market?
\nAnswer:
\nStock Broker – Meaning :<\/p>\n\n
\n<\/p>\n\n
\n
\n
\n
\n
\nA part from investing in stocks, Brokers also help the investors to invest in other assets classes like commodities, gold exchange traded fuds (ETFs) and mutual fund products. They also help their clients in investment in initial public offerings (IPO) of companies.<\/p>\n
\nA Stock Broker finds prospective clients and builds a customer base. He may do this by writing articles in newspapers and magazines, hosting radio and television or taking time to clal prospective clients. A Stock Broker can also receive new clients through referrals from other individuals and organizations or by.attending social events where he can market his services.<\/p>\n
\nDiscuss the need for services of stock broker in the financial market.
\nAnswer:
\nFor a common man, it\u2019s not possible to buy the stocks directly from the exchange. They need middlemen to execute the trade; such middlemen are known as ‘Stock Brokers’.<\/p>\n
\nStock Market Brokers possess expertise related to the working of stock market, performance of stocks, market trends, and so on. Besides, they have access to the data base and research findings of Brokerage Firms that they are associated with. Hence, they can provide excellent investment advice to their clients.<\/p>\n
\nStock Market Brokers are authorized to provide limited banking services such as interest-bearing accounts, electronic deposits, and withdrawals. The clients can avail such banking-related services from the stock brokers by paying them a nominal brokerage charge.<\/p>\n
\nA part from stokes, many stock brokers also deal in other securities such as mutual funds, bonds, exchange tradded funds, futures, options and commodity trading. They also provide investment advice related to all these products, to their clients.<\/p>\n
\nReplying of email within a few hours during business time is considered reasonable in this matter. It’s depending on the severity of the incident.<\/p>\n
\nBroker can provide excellent customer care through phone and toll free number.<\/p>\n
\nAs far as live chat goes, the response should be immediae but is only possible during working days and for certain time.<\/p>\n
\nThis can also help a clien in getting assisted fast and directed to the specific representative.<\/p>\n
\nThis is a new and popular concept these days wher you can ask questions directly to the Broker related to any particular topic or issue.<\/p>\n
\nQuick presentation of recurring issue in the knowledge base is one of the effective ways for he online community. Training and features about the tools are best to demonstrate in video tutorials to reduce traffic on ohter support features.<\/p>\n
\nWhat do you know about NSE?
\nAnswer:
\nThe National Stock Exchange (NSE) was incorporated in November, 1992. It is a “country wide screen based online trading system” and has international standards.<\/p>\n\n
\nWhat is BSE?
\nAnswer:
\nThe Bombay Stock Exchange (BSE) is formerly known as “Native Stock and Share Brokers Association”, which was established in the year 1877. The aim of association was to support and protect the character and status of brokers, to promote fair practices and to discourage malpractices.<\/p>\n\n
\nWhat do you mean by Bulls and Bears?
\nAnswer:
\nBull :
\nA Bull or Tejawalla is an operator who expects a rise in prices of securities in the future. In anticipation of price rise he makes purchases of shares and debentures with the intention to sell at higher prices in future. He being a speculator has no intention of taking delivery of securities but deals only in difference of prices. Such a speculator is called ‘Bull’ because of resemblance of his behaviour with bulb A bull tends to throw his victims up in the air. Similarly, a bull speculator tries to raise the prices of securities by placing big purchase orders.<\/p>\n
\nBear or Mandiwala speculator expects prices to fall in future and sells securities at present with a view to purchase them at lower prices in future. A bear does not have securities at present but sells them at higher prices in anticipation that he will supply them by purchasing at lower prices in future. If the prices move down as per expectations of the bear, he will earn profits out of these transactions. A bear does not take the delivery of securities but takes the * difference if prices fall down, In case the prices are not falling as expected by the bears then they may start speculator rumours to pressurise price downwards, it is known as ‘bear said’.<\/p>\n
\nWhat are the aims of listing securities?
\nAnswer:
\nListing of securities means the inclusion of securities in the official list of stock exchange for the purpose of trading.<\/p>\n\n
\nWhat is Demutualisation?
\nAnswer:
\nThe concept of demutualisation of stock exchange had originated in India, where two exchanges called OTCEI in 1990 and NSE in 1992 adopted a pure demutualisation structure from their birth. Demutualised stock exchanges are generally ‘for profit’ and tax paying entities.<\/p>\n
\nWhat are the top ten stock broking firms in India?
\nAnswer:<\/p>\n\n\n
\n Name of Stock Broker<\/td>\n Number of Active Clients<\/td>\n % Share<\/td>\n<\/tr>\n \n 1. Zerodha Broking Limited<\/td>\n 15,98,948<\/td>\n 14.28<\/td>\n<\/tr>\n \n 2. ICICI Securities Limited<\/td>\n 10,81,960<\/td>\n 9.66<\/td>\n<\/tr>\n \n 3. HDFC Securities Ltd.<\/td>\n 7,26,197<\/td>\n 6.48<\/td>\n<\/tr>\n \n 4. RKSV Securities India Private Limited<\/td>\n 6,75,551<\/td>\n 6.03<\/td>\n<\/tr>\n \n 5. ANGEL Broking Limited<\/td>\n 6,29,260<\/td>\n 5.62<\/td>\n<\/tr>\n \n 6. Kotak Securities Ltd.<\/td>\n 5,83,482<\/td>\n 5.21<\/td>\n<\/tr>\n \n 7. Sharekhan Ltd.<\/td>\n 5,47,950<\/td>\n 4.89<\/td>\n<\/tr>\n \n 8. Paisa Capital Limied<\/td>\n 4,89,661<\/td>\n 4.37<\/td>\n<\/tr>\n \n 9. Motial Oswal Financial Services Limited<\/td>\n 3,85,535<\/td>\n 3.44<\/td>\n<\/tr>\n \n 10. Axis securities Limited<\/td>\n 2,71,990<\/td>\n 2.45<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\nStock Exchange.
\nAnswer:
\nIt is an association, organization or body of Individuals, whether incorporated or not, established for the purpose of assisting, regulating, and controlling business in buying, selling and dealing in securities.<\/p>\n
\nListing of securites.
\nAnswer:
\nThe inclusion of securities in the official list of stock exchange for the purpose of trading.<\/p>\n
\nLameduck.
\nAnswer:
\nHe is a speculator when the expectations of Bear does not become true and the price of security does not fall, he cannot fulfil his commitment, and he is said to be lameduck.<\/p>\n
\nStag.
\nAnswer:
\nA stag is a cautious speculator. He applies for the shares of a new company at face value and he expects they are sold at a premium.<\/p>\n
\nJobber.
\nAnswer:
\nHe is a speculator who deals with securities independently and purchases and sells the securities in his own name.<\/p>\n
\nStock Broker.
\nAnswer:
\nBroker is a link between a Jobber and general public who deals with a large variety of securities and works for commission. He contracts the Jabbr to buyer sell the securities an behalf of the general public. \u2019<\/p>\n
\nSEBI.
\nAnswer:
\nSecurities and Exchanges Board of India(SEBI) helps to over come the undesirable practices in the stock exchange. It is controller of capital issues. Its head quarters is located in Mumbai.<\/p>\n
\nPermitted securities.
\nAnswer:
\nA stock exchange sometimes permits trading in certain securities, which are not listed at the stock exchange but are actively traded in other stock exchanges. Such securities are known as permitted securities.<\/p>\n
\nStock Exchange Speculators.
\nAnswer:
\nThe persons who make profits by trading securities for shorterm purpose, are known as stock exchange speculators.<\/p>\n
\nStock Exchange operators.
\nAnswer:<\/p>\n\n