Finance Booklet.

CATIPAL MARKET A capital market is a market for securities (debt or equity), where business enterprises (companies) and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year as the raising of short-term funds takes place on other markets (e.g., the money market). The capital market includes the stock market (equity securities) and the bond market (debt). Capital markets may be classified as primary markets and secondary markets. In primary markets, new stock or bond issues are sold to investors via a mechanism known as underwriting. In the secondary markets, existing securities are sold and bought among investors or traders, usually on a securities exchange, over-thecounter, or elsewhere. Custody in essence a service consisting in holding (and normally administering) securities on behalf of third parties has its roots in physical safekeeping. In the days when securities existed only in paper form, investors needed a safe place to keep these certificates of value. That safe place could either be their own premises (which however then needed to be adequately protected) or those of a safekeeping service provider (banks with their vaults were a natural choice at that time).Nowadays, custody is offered by a variety of institutions, primarily by brokers, commercial banks and investment banks.1 These providers have developed specialised services that cater to different customer segments. What is Investment Banking? An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities. An investment bank may also assist companies involved in mergers and acquisitions, and provide ancillary services such as market making, trading of derivatives, fixed income instruments, foreign exchange, commodities, and equity securities. There are two main lines of business in investment banking. Trading securities for cash or for other securities (i.e., facilitating transactions, market-making), or the promotion of securities (i.e., underwriting, research, etc.) is the "sell side", while dealing with pension funds, mutual funds, hedge funds, and the investing public (who consume the products and services of the sell-side in order to maximize their return on investment) constitutes the "buy side". Many firms have buy and sell side components. Who is an Investment Banker? A person representing a financial institution that is in the business of raising capital for corporations and municipalities.

An investment banker may not accept deposits or make commercial loans. Investment bankers are the people who do the grunt work for IPOs and bond issues. An Investment Banker can be considered as a total solutions provider for any corporate, desirous of mobilizing its capital. The services provided range from investment research to investor service on the one hand and from preparation of the offer documents to legal compliances & post issue monitoring on the other. A long lasting relationship exists between the Issuer Company and the Investment Banker. Activities of a Typical Investment Bank A typical investment bank will engage in some or all of the following activities: Raise equity capital (e.g., helping launch an IPO or creating a special class of preferred stock that can be placed with sophisticated investors such as insurance companies or banks) Raise debt capital (e.g., issuing bonds to help raise money for a factory expansion)

Insure bonds or launching new products (e.g., such as credit default swaps) Engage in proprietary trading where teams of in-house money managers invests or trades the company's own money for its private account (e.g., the investment bank believes gold will rise so they speculate in gold futures, acquire call options on gold mining firms, or purchase gold bullion outright for storage in secure vaults).

What is Treasury Management? Treasury management (or treasury operations) includes management of an enterprise's holdings, with the ultimate goal of maximizing the firm's liquidity and mitigating its operational, financial and reputational risk. Treasury Management includes a firm's collections, disbursements, concentration, investment and funding activities. In larger firms, it may also include trading in bonds, currencies, financial derivatives and the associated financial risk management. Most larger banks have whole departments devoted to treasury management and supporting their clients' needs in this area. Until recently, larger banks had the stronghold on the provision of treasury management products and services. However, smaller banks are increasingly launching and/or expanding their treasury management functions and offerings, because of the market opportunity afforded by the recent economic environment (with banks of all sizes focusing on the clients they serve best), availability of (recently displaced) highly-seasoned treasury management professionals, access to industry standard, third-party technology providers' products and services tiered according to the needs of smaller clients, and investment in education and other best practices. What are the functions of Treasury Management?

1. To maintain the liquidity of business It is the main function of treasury management to maintain the liquidity of business. Without proper liquidity, it is risk for business to operate smoothly. By using cash flow analysis and working capital management. Treasury officer make good ratio of liquid assets and liquid liability. 2. To Minimize Currency Risk In above example of Google Inc. business, I have already explained that it is the function of treasury management to minimize the currency risk. For this, treasury managers touch with currency market of world. They analyze the reason of crisis in currency market. Sometime this crisis will be benefited for them because they have to pay less to other country for getting their service at cheap rates. 3. To provide quick finance to Company It is also function of treasury department to supply quick finance to company, when it needs the money. For this, a good network in financial market is required. What is Security Market? Securities market is an economic institute within which take place sale and purchase transactions of securities between subjects of economy on the base of demand and supply. Also we can say that securities market is a system of interconnection between all participants (professional and nonprofessional) that provides effective conditions: to buy and sell securities, and also

to attract new capital by means of issuance new security (securitization of debt), to transfer real asset into financial asset, to invest money for short or long term periods with the aim of deriving profit.

What are the functions of securities market? The common market functions of securities market:

commercial function (to derive profit from operation on this market) Price determination (Demand and Supply balancing, the continuous process of prices movements guarantees to state correct price for each security (So, the market corrects mispriced securities) Informative function (market provides all participants with market information about participants and traded instruments)

Regulation function (securities market creates the rules of trade, contention () regulation, priorities determination)

What are the main Financial Instruments? Bond, Promissory note, Cheque a security contains requirement to make full payment to the bearer of cheque, Certificate of deposit, Bill of Lading (a Bill of Lading is a document evidencing the receipt of goods for shipment issued by a person engaged in the business of transporting or forwarding goods." ), Stock. What is Promissory note? A promissory note, referred to as a note payable in accounting, or commonly as just a "note", is a contract where one party (the maker or issuer) makes an unconditional promise in writing to pay a sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms. They differ from IOUs in that they contain a specific promise to pay, rather than simply acknowledging that a debt exists. What is a Bond? Bond - an issued security establishing its holder's right to receive from the issuer of the bond, within the time period specified therein,

its nominal value and the interest fixed therein on this value or other property equivalent.

The bond may provide for other property rights of its holder, where this is not contrary to legislation. What are common shares & Preferred Stock? Common shares represent ownership in a company and a claim (dividends) on a portion of profits. Investors get one vote per share to elect the board members, who oversee the major decisions made by management.Over the long term, common stock, by means of capital growth, yields higher returns than almost every other investment. This higher return comes at a cost since common stocks entail the most risk. If a company goes bankrupt and liquidates, the common shareholders will not receive money until the creditors, bondholders, and preferred shareholders are paid. Preferred stock represents some degree of ownership in a company but usually doesn't come with the same voting rights. (This may vary depending on the company.) With preferred shares investors are usually guaranteed a fixed dividend forever. This is different than common stock, which has variable dividends that are never guaranteed. Another advantage is that in the event of liquidation preferred shareholders are paid off before the common shareholder (but still after debt

holders). Preferred stock may also be callable, meaning that the company has the option to purchase the shares from shareholders at anytime for any reason (usually for a premium). Some people consider preferred stock to be more like debt than equity. About Debt & Equity: Debt Debt securities may be called debentures, bonds, deposits, notes or commercial paper depending on their maturity and certain other characteristics. The holder of a debt security is typically entitled to the payment of principal and interest, together with other contractual rights under the terms of the issue, such as the right to receive certain information. Debt securities are generally issued for a fixed term and redeemable by the issuer at the end of that term. Debt securities may be protected by collateral or may be unsecured, and, if they are unsecured, may be contractually "senior" to other unsecured debt meaning their holders would have a priority in a bankruptcy of the issuer. Debt that is not senior is "subordinated". Corporate bonds represent the debt of commercial or industrial entities. Debentures have a long maturity, typically at least ten years, whereas notes have a shorter maturity. Commercial paper is a simple form of debt security that essentially represents a post-dated check with a maturity of not more than 270 days. Money market instruments are short term debt instruments that may have characteristics of deposit accounts, such as certificates of deposit, and certain bills of exchange. They are highly liquid and are sometimes referred to as "near cash". Commercial paper is also often highly liquid. Euro debt securities are securities issued internationally outside their domestic market in a denomination different from that of the issuer's domicile. They include eurobonds and euronotes. Eurobonds are characteristically underwritten, and not secured, and interest is paid gross. A euronote may take the form of eurocommercial paper (ECP) or euro-certificates of deposit. Government bonds are medium or long term debt securities issued by sovereign governments or their agencies. Typically they carry a lower rate of interest than corporate bonds, and serve as a source of finance for governments. U.S. federal government bonds are called treasuries. Because of their liquidity and perceived low risk, treasuries are used to manage the money supply in the open market operations of non-US central banks. Sub-sovereign government bonds, known in the U.S. as municipal bonds, represent the debt of state, provincial, territorial, municipal or other governmental units other than sovereign governments.

Supranational bonds represent the debt of international organizations such as the World Bank, the International Monetary Fund, regional multilateral development banks and others. Equity An equity security is a share of equity interest in an entity such as the capital stock of a company, trust or partnership. The most common form of equity interest is common stock, although preferred equity is also a form of capital stock. The holder of an equity is a shareholder, owning a share, or fractional part of the issuer. Unlike debt securities, which typically require regular payments (interest) to the holder, equity securities are not entitled to any payment. In bankruptcy, they share only in the residual interest of the issuer after all obligations have been paid out to creditors. However, equity generally entitles the holder to a pro rata portion of control of the company, meaning that a holder of a majority of the equity is usually entitled to control the issuer. Equity also enjoys the right to profits and capital gain, whereas holders of debt securities receive only interest and repayment of principal regardless of how well the issuer performs financially. Furthermore, debt securities do not have voting rights outside of bankruptcy. In other words, equity holders are entitled to the "upside" of the business and to control the business.

Stock

Hybrid Hybrid securities combine some of the characteristics of both debt and equity securities. Preference shares form an intermediate class of security between equities and debt. If the issuer is liquidated, they carry the right to receive interest and/or a return of capital in priority to ordinary shareholders. However, from a legal perspective, they are capital stock and therefore may entitle holders to some degree of control depending on whether they contain voting rights. Convertibles are bonds or preferred stock that can be converted, at the election of the holder of the convertibles, into the common stock of the issuing company. The convertibility, however, may be forced if the convertible is a callable bond, and the issuer calls the bond. The bondholder has about 1 month to convert it, or the company will call the bond by giving the holder the call price, which may be less than the value of the converted stock. This is referred to as a forced conversion. Equity warrants are options issued by the company that allow the holder of the warrant to purchase a specific number of shares at a specified price within a specified time. They are often issued together with bonds or existing equities, and are, sometimes, detachable from them and separately tradeable. When the holder of the warrant exercises it, he pays the money directly to the company, and the company issues new shares to the holder.

Warrants, like other convertible securities, increases the number of shares outstanding, and are always accounted for in financial reports as fully diluted earnings per share, which assumes that all warrants and convertibles will be exercised. Definition of Portfolio Management? The art and science of making decisions about investment mix and policy, matching investments to objectives, asset allocation for individuals and institutions, and balancing risk against performance. Portfolio management is all about strengths, weaknesses, opportunities and threats in the choice of debt vs. equity, domestic vs. international, growth vs. safety, and many other tradeoffs encountered in the attempt to maximize return at a given appetite for risk. What is Portfolio management? In the case of mutual and exchange-traded funds (ETFs), there are two forms of portfolio management: passive and active. Passive management simply tracks a market index, commonly referred to as indexing or index investing. Active management involves a single manager, co-managers, or a team of managers who attempt to beat the market return by actively managing a fund's portfolio through investment decisions based on research and decisions on individual holdings. Closed-end funds are generally actively managed.

What is capital Market? Capital market is a market of securities. where a company and goverment raise long term funds. it is a market where money invested more them one year. in this we include the stock market and bond market

Definition of 'Primary Market'

A market that issues new securities on an exchange. Companies, governments and other groups obtain financing through debt or equity based securities. Primary markets are facilitated by underwriting groups, which consist of investment banks that will set a beginning price range for a given security and then oversee its sale directly to investors Definition of 'Secondary Market'

A market where investors purchase securities or assets from other investors, rather than from issuing companies themselves. The national exchanges - such as the New York Stock Exchange and the NASDAQ are secondary markets. Secondary markets exist for other securities as well, such as when funds, investment banks, or entities such as Fannie Mae purchase mortgages from issuing lenders. In any secondary market trade, the cash proceeds go to an investor rather than to the underlying company/entity directly. What do you mean by Equity investment? Answer: An equity investment generally refers to the buying and holding of shares of stock on a stock market by individuals and firms in anticipation of income from dividends and capital gains, as the value of the stock rises. It may also refer to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup company What do you mean by stock market or equity market? Answer: A stock market or equity market is a public entity (a loose network of economic transactions, not a physical facility or discrete entity) for the trading of company stock (shares) and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately. What do you mean by money market? Answer: The money market is a component of the financial markets for assets involved in short-term borrowing and lending with original maturities of one year or shorter time frames. What do you mean by financial regulation? Answer: Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system. This may be handled by either a government or non-government organization

What are the Aims of financial regulation? Answer: Aims of regulation The aims of financial regulators are usually:

To enforce applicable laws To prevent cases of market manipulation, such as insider trading To ensure competence of providers of financial services To protect clients, and investigate complaints To maintain confidence in the financial system To reduce violations under laws

List some financial regulatory authorities Commodity Futures Trading Commission (CFTC) National Credit Union Administration (NCUA) Financial Services Authority (FSA), United Kingdom

What do you mean by NSE? Answer: The National Stock Exchange was incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and Investment Corporation of India, Industrial Finance Corporation of India, all Insurance Corporations, selected commercial banks and others. Trading at NSE can be classified under two broad categories: (a) Wholesale debt market and (b) Capital market. What are the advantages of NSE? (National Stock Exchange) NSE has several advantages over the traditional trading exchanges. They are as follows:

NSE brings an integrated stock market trading network across the nation. Investors can trade at the same price from anywhere in the country since inter-market operations are streamlined coupled with the countrywide access to the securities.

Delays in communication, late payments and the malpractices prevailing in the traditional trading mechanism can be done away with greater operational efficiency and informational transparency in the stock market operations, with the support of total computerized network.

Why India needs economic planning? One of the major objective of planning in India is to increase the rate of economic development, implying that increasing the rate of capital formation by raising the levels of income, saving and investment. However, increasing the rate of capital formation in India is beset with a number of difficulties. People are poverty ridden. Their capacity to save is extremely low due to low levels of income and high propensity to consume. Therefor, the rate of investment is low which leads to capital deficiency and low productivity. Low productivity means low income and the vicious circle continues. Thus, to break this vicious economic circle, planning is inevitable for India. What are general objectives of Indian Planning? The long-term general objectives of Indian Planning are as follows :

Increasing National Income Reducing inequalities in the distribution of income and wealth Elimination of poverty Providing additional employment; and Alleviating bottlenecks in the areas of : agricultural production, manufacturing capacity for producers goods and balance of payments.

What is V look up & H look up? VLOOKUP and HLOOKUP are functions in Excel that allow you to search a table of data and based on what the user has supplied and give appropriate information from that table. V look up stands for Vertical look up H look up stands for Horizontal look up There are a number of features that are available in Excel to make your task easier. Some of the main features are: 1 AutoSum - helps you to add the contents of a cluster of adjacent cells. 2 List AutoFill - automatically extends cell formatting when a new item is added to the end of a list.

3 AutoFill - feature allows you to quickly fill cells with repetitive or sequential data such as chronological dates or numbers, and repeated text. AutoFill can also be used to copy functions. You can also alter text and numbers with this feature. 4 AutoShapes toolbar will allow you to draw a number of geometrical shapes, arrows, flowchart elements, stars and more. With these shapes you can draw your own graphs. 5 Wizard - guides you to work effectively while you work by displaying various helpful tips and techniques based on what you are doing. Drag and Drop - feature will help you to reposition the data and text by simply dragging the data with the help of mouse. 6 Charts - features will help you in presenting a graphical representation of your data in the form of Pie, Bar, Line charts and more. 7 PivotTable - flips and sums data in seconds and allows you to perform data analysis and generating reports like periodic financial statements, statistical reports, etc. You can also analyze complex data relationships graphically. 8 Shortcut Menus - commands that are appropriate to the task that you are doing appear by clicking the right mouse button.

1)

EXCEL WORKSHEET

Excel allows you to create worksheets much like paper ledgers that can perform automatic calculations. Each Excel file is a workbook that can hold many worksheets. The worksheet is a grid of columns (designated by letters) and rows (designated by Microsoft Excel MSOB The letters and numbers of the columns and rows (called labels) are displayed in gray buttons across the top and left side of the worksheet. The intersection of a column and a row is called a cell. Each cell on the spreadsheet has a cell address that is the column letter and the row number. Cells can contain either text, numbers, or mathematical formulas.

2)

Selecting, Adding and Renaming Worksheets

The worksheets in a workbook are accessible by clicking the worksheet tabs just above the status bar. By default, three worksheets are included in each workbook. To add a sheet, select Insert Worksheet from the menu bar. To rename the worksheet tab, move the cursor to sheet tab, right-click on the tab with the mouse and select Rename from the shortcut new name and press the ENTER key. 3) DATA ENTRY

1. Date and Time: When you enter dates and times, Excel converts these entries into serial numbers and kept as background information. However, the dates and times will be displayed to you on the worksheet in a format opted by you. 2. Data in Series: You can fill a range of cells either with the same value or with a series of values with the help of AutoFill.

4)

Moving and Copying Cells

1. Moving Cells To cut cell contents that will be moved to another cell select Edit Cut from the menu bar or click the Cut button on the standard toolbar.

2. Copying Cells To copy the cell contents, select Edit Copy from the menu bar or click the Copy button on the standard toolbar. 3. Pasting Cut and Copied Cells Highlight the cell you want to paste the cut or copied content into and select Edit Paste from the menu bar or click the Paste button on the standard toolbar. 4. Drag and Drop If you are moving the cell contents only a short distance, the drag-and-drop method may be easier. Simply drag the highlighted border of the selected cell to the destination cell with the mouse. IMPORTANT KEYBOARD SHORTCUTS Keyboard shortcuts can save time and the effort of switching from the keyboard to the mouse to execute simple commands. .

Actions Document Actions Open a file New file Save As Save Print Find Replace Go to Cursor Movement One cell up One cell down One cell right One cell left Top of worksheet (cell A1) End of worksheet(last cell with data) End of row End of column Move to next worksheet Formulas Apply AutoSum Current date Current time Spelling Help Macros Selecting Cells All cells left of current cell

Key Strokes.

CTRL+O CTRL+N F12 CTRL+S CTRL+P CTRL+F CTRL+H F5 up arrow down arrow Tab SHIFT+Tab CTRL+Home CTRL+End Home CTRL+left arrow CTRL+PageDown ALT+= CTRL+; CTRL+: F7 F1 ALT+F8 SHIFT+left arrow

All cells right of current cell Entire column Entire row Entire worksheet Text Style Bold Italics Underline Strikethrough Formatting Edit active cell Format as currency with 2 decimal places Format as percent with no decimal places Cut Copy Paste Undo Redo CTRL+1

SHIFT+right arrow CTRL+Spacebar SHIFT+Spacebar CTRL+A CTRL+B CTRL+I CTRL+U CTRL+5 F2 SHIFT+CTRL+$ SHIFT+CTRL+% CTRL+X CTRL+C CTRL+V CTRL+Z CTRL+Y Format cells dialog box