Class 12 Business Studies - Chapter Financial Markets NCERT Solutions | India’s largest domestic investor
India’s largest domestic investor Life Insurance Corporation of India has once again come to government’s rescue by subscribing 70% of Hindustan Aeronautics’ ₹4,200-crore initial public offering.
a. Which market is being reflected in the above case?
b. State which method of floatation in the above identified market is being highlighted in the case? (Primary Market)
c. Explain any two other methods of floatation. (Private Placement, Offer through prospectus, offer for sale).
a. Which market is being reflected in the above case?
Ans. The market that has been reflected in the above case is Primary Market. Primary Market is also known as the new issues market, as this market deals with the new securities issued for the first time.
b. State which method of floatation in the above identified market is being highlighted in the case?
Ans. The floatation method that has been highlighted in this case is Right Issue. This is a privilege given to existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. The shareholders are offered the ‘right’ to buy new shares in proportion to the number of shares they already possess. This right is called the ‘pre-emptive right’ of the existing shareholders.
c. Explain any two other methods of floatation.
Ans. Methods of flotation are:
1. Offer Through Prospectus: Under this method, a company invites public to subscribe for its shares through issue of prospectus, which makes a direct appeal to investors to invest in the company, through an advertisement in the newspapers and magazines.
- The contents of prospectus must be according to the provisions of Companies Act and SEBI guidelines.
- The issue must be listed on at least one stock exchange.
- The issue may be underwritten to save the company from under subscription.
2. Private Placement: Private placement is the allotment of securities by a company to institutional investors and some selected individuals. It is considered beneficial because:
- It helps to raise funds more quickly than a public issue.
- The cost of flotation, which is quite expensive in other alternatives, is saved.
More Questions From Class 12 Business Studies - Chapter Financial Markets
- Q:-
Explain the objectives and functions of the SEBI.
- Q:-
What is the common name for Beneficiary Owner Account, which is to be opened by the investors for trading in securities?
- Q:-
State any two reasons why investing public can expect a safe and fair deal in the stock market. (Point w.r.t safety of Transactions – Functions of the Stock Exchange).
- Q:-
Explain the recent Capital Market reforms in India.
- Q:-
Lalita wants to buy shares of Akbar Enterprises, through her broker Kushvinder. She has a Demat Account and a bank account for cash transactions in the securities market. Discuss the subsequent steps involved in the screen-based trading for buying and selling of securities in this case.
- Q:-
Name the document prepared in the process of online trading of securities that is legally enforceable and helps to settle disputes/claims between the investor and the broker.
- Q:-
“Money Market is essentially a Market for short term funds.” Discuss.
- Q:-
State the objective of NSE?
- Q:-
Name any two details that need to be provided by the investor to the broker while filling a client registration form.
- Q:-
Distinguish between Capital Market and Money Market.
Popular Questions of Class 12 Business Studies
- Q:-
How does planning provide direction?
- Q:-
What is meant by staffing?
- Q:-
Identify the network of social relationships which arises spontaneously due to interaction at work.
- Q:-
What is informal communication?
- Q:-
State the meaning of controlling.
- Q:-
What is meant by capital structure?v
- Q:-
What is meant by management?
- Q:-
State any two advantages of branding to marketers of goods and services?
- Q:-
What makes principles of management flexible?
- Q:-
Under which consumer right does a business firm set up consumer grievance cell?
Recently Viewed Questions of Class 12 Business Studies
- Q:-
What is the importance of ‘setting standards’ in the controlling process?
- Q:-
Who can file a complaint in a consumer court?
- Q:-
Mr.Arfaaz had been heading the production department of Writewell Products Ltd., a firm manufacturing stationary items. The firm secured an export order that had to be completed on a priority basis and production targets were defined for all the employees. One of the workers, Mr. Bhanu Prasad, fell short of his daily production target by 10 units for two days consecutively. Mr. Arfaaz approached MsVasundhara, the CEO of the Company, to file a complaint against MrBhanu Prasad and requested her to terminate his services. Explain the principle of management control that MsVasundhara should consider while taking her decision. (Hint: Management by exception).
- Q:-
Give any two standards that can be used by a company to evaluate the performance of its Finance & Accounting department.
- Q:-
Write a short note on budgetary control as a technique of managerial control.
- Q:-
Explain the principle of ‘Scalar Chain’ and gang plank.
- Q:-
Identify the network of social relationships which arises spontaneously due to interaction at work.
- Q:-
‘Planning is looking ahead and controlling is looking back.’ Comment.
- Q:-
Explain the various steps involved in the process of control.
- Q:-
A company X limited manufacturing cosmetics, which has enjoyed a pre-eminent position in business, has grown in size. Its business was very good till 1991. But after that, new liberalised environment has seen entry of many MNC’s in the sector. With the result the market share of X limited has declined. The company had followed a very centralised business model with Directors and divisional heads making even minor decisions. Before 1991 this business model had served the company very well as consumers had no choice. But now the company is under pressure to reform. What organisation structure changes should the company bring about in order to retain its market share? How will the changes suggested by you help the firm? Keep in mind that the sector in which the company is FMCG.
- All Chapters Of Class 12 Business Studies
- All Subjects Of Class 12