UNIT II CAPITAL MARKET PART A 1.Define NIM.

M. Stocks available for the first time are offered through new issue market. The issuer may be a new company or existing company. These issues may be of new type or the security used in the past. 2. List the parties involved in NIM. The parties are Managers, registrars, bankers, advertising agents and financial institutions. 3. Who is an underwriter? Underwriting is a contract by means of which a person gives an assurance to the insurer to the effect that the former would subscribe to the offered in the event of non subscription by the person to whom they are offered. 4. What is issue of shares at premium and par? In certain cases companies are not permitted to fix their issue prices at premium. The price of the share should be at par. 5. What are the advantages of private placement? i. There is no need for underwriting arrangements since the placements itself amounts to underwriting. ii. The terms of issue are negotiated between the issuing company and purchasing intermediaries. 6. Who are the players in the capital market? The following are the players in the NIM Merchant bankers, Registrars, Collecting and co-ordinating bankers, underwriters and brokers, printers, advertising agencies. 7. Who is Arbitrageurs? These are those who do inter market deals for a profit through differences in prices as between markets say buy in Calcutta and sell in Bombay and vice versa. 8. Explain the role of floor brokers. They are authorized clerks and sub- brokers who enter the trading floor and execute orders for the clients or for the members and also called trading brokers. 9. List the objectives of UTI. i. To mobilize savings, particularly from the low and middle-income groups. ii. To channelise these savings into productive investment iii. To provide an assured income to savers. iv. They provide expert management of their funds; steady income and liquidity for their investment through repurchase facility.

10. What is the composition of IFCI, ICICI? IFCI It has a paid up capital of Rs.1, 096 crores of which 50% is held by the IDBI and the rest by the scheduled commercial and co-operate banks. ICICI its paid up capital, borrowing from the government, IDBI, IRBI etc. it can also raise funds from the capital market by issue of bonds or equity and borrow from aboard with the permission of the government.