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:-
Explain the recent Capital Market reforms in India.
- 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:-
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:-
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:-
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:-
What is a Treasury Bill?
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:-
Why delegation is considered essential for effective organising?
- Q:-
Describe the steps involved in the organizing process with examples.
- Q:-
Discuss the following techniques of Scientific Work Study:
a. Time Study
b. Motion Study
c. Fatigue Study
d. Method Study
e. Simplification and standardisation of work - Q:-
What are the barriers to effective delegation? Discuss ways to overcome these barriers.
- Q:-
What are the advantages of training to the individual and to the organisation?
- Q:-
How does understanding of business environment help in improving performance of a business?
- Q:-
State the main objective of time study.
- Q:-
Why are rules considered to be plans?
- Q:-
Explain any four points regarding significance of principles of management.
- Q:-
The production manager asked the foreman to achieve a target production of 200 units per day, but he doesn’t give him the authority to requisition tools and materials from the stores department. Can the production manager blame the foreman if he is not able to achieve the desired target? Give reasons.
- All Chapters Of Class 12 Business Studies
- All Subjects Of Class 12