COMMON SHARE LAST CLAIIM ON PROFT AND DURING LIQUIDUTY

HAS HIGH RETURN POTRNTIAL AND HIGH RISK

PREFERENCE SHARE-FIXED RATE OF DIVIDEND
HAS CKAIM BEFORE COMMON SARE
NO VOTING RIGHTS(ONLY IF DIVIDEND IS PAID)
3 TYPES:PERPETUAL(NOT REPAYABLE AND NOT REEDEMABLE) REDEEMABLE(FIX ATURITY) AND
CONVERTIBLE(CAN BE CONVERTED TO COMMON SHARE)
ADR(AMERICAN DEPOSITORY RECEIPT) FOR INDIAN COMPANIES TO TRADE IN US
AND GDR FOR ANY OTHER COUNTRY
BORROWING-LOAN OR ISSUANCE OF SECURITIES
PRIME LENDING RATE DOES NOT CHANGE WITH MARKET
RATE OF INTEREST OOF BOND IS CALLED COUPON
HOLDERS OF BIND ARE CALLED CREDITORS
COMPANY HAS TO PAY IRRESPECTIVE OF PROFIT OR LOSS
UNSECURED BONDS ARE CALLED DEBENTURES
DEBENTURES ARE USED TO RAISE SHIRT TERM CAPITAL
BONDS ARE SECURED WHEREAS DEBENTURES ARE NOT
OBTH ARE CONVERTIBLE INOT SHARES
BONDS ISSUED BY GOVERNMENT ARE CALLED GILTS OR G-SECS
LIBOR IS USED WHEN ONE BANK LENDS TO ANOTHER BANK
YIELDIS RATE OF RETURN
ZERO COUPON BOND IS BRIUGHT AT DISOUNTED RATE AND MATURITY PAID ON MARKET RATE
SECURITIES USED TO RAISE MONEY FOR LESS THAN 1 YEAR IS CALLED MONEY MARKET SECUR
ITY
TREASURY BILLS-ISSUER GOI,ZERO COUPON,PURCHASER ARE INSTITUTIONS
CERTIFICATE OF DEPOSIT-ISSUED BY FININACIAL INSTITUTION.SPECIFIC MATUITY DATE NA
D INTEREST,MINIMUM IS 1 LAKH,THEY ARE TRADEABLE
COMMERCIAL PAPERS-ISSUER ARE CORPORATIONS,UNSECURED,PURCHASER AER ARE LASO INSTI
TUTION,ZERO COUPON,MINIMUM 5 LAKHS,RIASEDBY CORP OF MORE THAN 4 CRORES
REPURCHASE AGREEMENT-ISSUES AGAINST SECURITY(COLLETRAL) LIKE G SECS
REPO RATE-RBI LENDS TO BANK,REVERSE REPO RATE-BANK LENDS TO RBI
FUNDS CHARGES FESS CALLLED LOAD i.i ENTRY LOAD OR EXIT LOAD
FUNDS CAN BE OPEN ENDED OR CLOSE ENDED
CLSED ENDED OFFERED DURING INTIAL PERIOD ANDCAN BE BRIUGH THEREAFTER ONLY FROM M
ARKET
FUNDS CAN BE
GROWTH PLAN-RE INVEST THE MONEY
SIP-MONEY IS RETURENED AFER REGULAR INTERVALS
DIVIDEND PLAN-WHEN DIVIDEND IS EARNED
NAV OF FUND=MARKET VALUE+INCOME RECEVIABLE-EXPENSE PAYABLE/NO OF OUTSTADNING UNI
TS
FINANCIAL MARKETSPRIMARY-WHERE STOCKS ARE CREATED
SECONDARY-STOCKS ARE TRADED
IPO-PRIVATE COMPANY RIASE MONEY MONEY BY GOING PUBLIC
FPO(FOLLOW ON PUBLIC OFFERING)-PUBKIC LIMITED COMPANY ISSUES ADDITIONAL SHARE
FPO CAN BE -RIGHTS ISSUE-FOR EXISTING SHARE HOLDER

PRIVATE PLACEMENT-ISSUIN SHARE TO INISTITUIONS

ISSUANCE PROCESS-HIRING MANAGERS(INVESTMENT BANK)-LEGAL CMOPLAIANCE(FILING WITH
SEBI)-MARKETING-ISSUE IS FORMALLY ANNOUNCED
PRE-TRADE STAE-WHETHER TO BUY OR SELL
TRADING SYSTEM OF BSE IS CALLED BOLT AND NSE IS CALLED NEAT
INDIA FOLLOWS A T+2 SYSTEM WHERE SHARES WILL COME IN UR ACCOUNT AFTER 2 DAYS
depository are where shares are kept in electronic form
Indians use CAPITIXATION methodolgy for determining stock indices
market capitilization=market cap*no of outstanding shares
GOVT BONDS ARE ISSUED BY RBI-BANKS & INSTITUTION BID FIR IT AND SELL IN THE SECO
NDARY MARKET
COUPON IS CALCALUATED ON FACE VALUE WHERAS YIELD I CALCULATED ION FINAL PRICE OF
BIND(IF IT SOLD ON PREMIUM ON MARKET)
FV 1000
COUPON-4% RS 40 A YEAR ON INTEREST
SOLD AT 1100 THEN ALSO INTEREST WILL SAME..40/1100 =3.63 IS YIELD
**BANKING**
CAR(CAPITAL ADEQUACY RATIO)=AMOUNT BANKS KEEP IN CASE OF LENDING
SLR=STATUTORY LIQUIDITY RATIO=% AMOUNT OF G SECS NEEDS TO BE PURCHASED FROMGOI E
VERY FRIDAY BY BANK.CURRENT RATE IS 21.5
CRR=CASH RESERVE RATIOO=AMOUNT BANK HAS TO KEEP WITH RBI OF CERTAIN PERCENT OF N
ET DEMAND AND TIME LIABILITIES.
NOF(NET OWNERS FUND)- FOR NBFC HAS TO BE N=MAINTIANED
BANKS GENERATE MAININCOME FROM NII(NET INEREST INCOME)
SPREAD=AVERAGE LENDING RATE-AVAERAGE DEPOSIT RATE
WEIGHTED AVERAGE CAPITAL COST(wACC)=RATE*WEIGHT
CASA=CURRENT ACCOUNT SAVING ACCOUNT
MINIMUM LENDING RATE=WACC+OPERATIONAL CST+PROFIT REQUIRED
***RETAIL BANKING**
IN SWEEP IN FACILITY..EXCESS AMOUNT IS TRANSFERRED TO A NEW FD AND IF WITHDRAWAL
AMT IS LESS WE CAN GET AMT FROM FD.
NRI CAN OPEN 3 DIFFERENT ACCOUNT
NRE(EXTERNAL)-INCOME EARNED ABROAD
NRO(ORDINRY)-INCOME EARNED IN INDIA AND CAN BE WITHDRAWN OUTSIDE
FCNR=FORIGN CURRENCY NON RESIDENT ACCOUNT-SAME AS FD-AMT DEPOSITED IN FIREIGN CU
RRENCY AM=ND EARNED ALSO IN SAME
COrporate Banking
LINE oF credit:Bank becomes a guarintar for customer.Non-fund based but will cha
nge depending if customre defaults
Overdraft facility:Loans on current account upto specific limit
cash credit-secured
BILL DISOCUNTING IS POST SHIPMENT ENTITY
recourse means if buyer doesny pay the amt to the bank.seller has to compenstae
for it to the bank
******
NBFC(NON BANKING FINANCE COMPANIES)
DIVIDED IN TO 3 TYPES-ASSEST FINANCE COMPANY,INVESTMENT COMPANY(IC),LOAN COMPANY
(LC)

***
paymrnt system is a zero sum system i.e net of owe of all banks is = to net of r
eceive of all banks
cheque is negotiable as ownership can be transferred from one person to another
via endorsment
credit card is both payment and loan product whereas debit card is only payment
product
term used to measure risk is called...Value at risk (VaR)
var report can be caluclated using covariance methodology and simukation methodo
logy
minimum capital amount of 8% of total risk (loan)amount
basel-1 only credit risk
basel -2 credit operational and market risk were covered
basel 3 raised capital adequacy amount to 10.5 from 8
**LAWS**
NEGITIABLE INSTRUMENT act-cheque,bill of exechange,promisory notes
UCPDC-Uniform Customs and Pratices fir doucmntary credits-governed by INternatio
nal Chambers of Commerce-currengt version