Taxmann's Investing in Stock Markets by Taxmann

Preface to Sixth Edition “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”—Robert G. Allen Investment in stock market has witnessed unprecedented growth worldwide especially in the last two decades. Growth in stock market has been parallel to the growth of economy. Investing in stock market requires requisite skills and adequate understanding of market dynamics and tools of investment. As compared to developed stock market where about 30 to 40 per cent of the population participate in stock market, the stock market participation is meagre in India, just about 2 crore equity investors which makes only 2% of the total population. It shows the potential for both vertical and horizontal growth of Indian Stock Market. The plausible reasons for very low stock market participation in India include the more conservative or risk averse nature of Indian investors as well as inadequate knowledge and education regarding stock market instruments, tools, process and trading mechanism. The primary objective of introducing a paper on Investing in stock markets is to fill up this void and educate young minds for investing in stock market in a judicious way. “An investment in knowledge pays the best interest.” – Benjamin Franklin The present book “Investing in stock market” is written with objective of providing the user a comprehensive understanding of the investment environment, investment decision process and trading mechanism in stock market. It explains various concepts, tools and techniques related with investment in financial assets with lively examples and suitable illustrations. The focus of the book is investment in stock market primarily equity shares. In this sixth edition of the book, some more theoretical concepts have been added along with latest technical tools used in stock markets. Chapter 4 introduces users to role and importance of primary and secondary market segments. Chapter 5 introduces to clearing corporations in India and also the newest national stock exchange - MSEI. Moving further, readers would learn about the EIC framework of fundamental analysis of stocks in Chapter 7. To keep up with the modern tools of technical analysis, filter rules, Credit I-5

N O I T I D E H T X I S O T E C A F E R P

I-6

Balance Theory, MACD, advance decline ratio and advance interactive charts have been added to Chapter 8. Lastly, payoffs of call and put options are discussed with elaborate illustrations and diagrams in Derivatives Market chapter. The book has been updated with most recent data tables, facts and information regarding stock markets.

. z i v

The book comprises of 10 chapters. Chapter 1 introduces readers to the basics of investment. Chapter 2 trains about risk and return analysis, measurement of risk and return, and comparison of various alternative investment choices posed to an investor. The focus of Chapter 3 is on Online Trading which is gaining popularity in India. Chapter 4 talks about Indian Securities Market & Ch. 5 provides a comprehensive overview of stock exchanges in India including NSE, BSE, MCX, MSEI, etc. Chapter 6 discusses about derivatives market and its instruments forwords, futures, options, etc. After creating this strong theoretical base, Chapters 7 and 8 aim to inculcate analytical knowledge amongst our readers by deliberating upon tools of fundamental analysis and technical analysis. Lastly, mutual fund investment has been discussed in Chapter 9 and Chapter 10 in great detail. Latest University examination question papers have been added for ready referral by students during exam preparation. e k i l k o o b s i h t n i d e t n e s e r p t x e t e h t f o s e r u t a e f t n ei l s a e s m yo nc at mu o eg r n a i en r r e a he TL t x e T n i a M

Every chapter begins with a list of learning outcomes which the reader will achieve after successful completion of the chapter. It sets the broad framework for the chapter, followed by - where various concepts and techniques have been explained in a lucid and well knit manner. Wherever required the explanation is supplemented by suitable illustrations, figures and examples. Each chapter provides sufficient number of solved problems for better understanding and application of the concepts explained in the main text. Summary points to recapitulate the concepts and tools are provided at the end of chapters. It helps the reader to glance over the entire discussion presented in that chapter. Every chapter provides a variety of assignments to test the knowledge of the reader. It comprises of True/False statements, theory questions and numerical problems. The topic of Investments is very lively and the reader may want to apply various concepts and techniques in real life. For this “project work” is provided in most of the chapters. Project work helps the students and other readers of this book to actually apply various concepts of investments in real life. Sufficient care has been taken while preparing the manuscript for the book. However there may be some unintentional errors. Readers are welcome to send all comments, suggestions at vanitatripathi.dse@gmail.com or neetipanwar.srcc@gmail.com Happy reading!

January 2022

DR. VANITA TRIPATHI MS. NEETI PANWAR

Acknowledgement

ild, s-ayn a, ),, )d, )Vh ) )ahl,lt, y r na anevC C gaaauCnM t e i ahawagaSAb mnwbpp aP N d u r hs j M h e m i r a aBDi eS aS crdbdr l a a K R V J t l G a n A e t V j Y av ( o S g ( g (p u r .Rl a.a Ls Pr .i ei teg. i pC (( Vr t Rgj n d Maaua rn.D(AaDurrDhanAS mwGR . . s , , i uUrdluRSnaa S k a K r ki v i .uaaat oiDnan Rew )a . R p m h k , n r h n i V i g l aweaARa i j r fe r k. DDuA uUBa n o P a i n r u mrRn(.T s l a A K D , t n R ao. ) A wa a SDV sn g.wa e Mu (e s .. kMr it e , n.l graw jhr r r) h r hiTu o . ADB a s n D , m M DSAS ss.a al DAr e e D a . i , V N m , D .,r . ,) wu.Gad ha m r)l r M G u ) . n C ) w a u V k , D D g r Hai j C ) D a ta D r.aKG s(PDa,C . h M t h S n ( g , ) s r R a N r i ) eh sg si a,e r e CAG S .Kaa s hC D nr l Srn a ( bl ) . n t i B g g B ( r M o , C h e , D p G Sa a n i rs L(( dcySAagaA) i SH h i . r a . ( eN MSV,w ngrs naS n h i ap G(iiat anh sBl.uPd ) l M k . r r M d n a e G y i r a n io a SnD aJ ou Me tw aS u, n eP CDe( L r r a n n m r d i l r . D d ( l ir ooai Ra ,t A. a aa n r h a a l . n n n i ) pl J D h R s a m.. i a CJahua kae a j . l . po r d c , h K n g r r u ) r j S h a l G ufa naD . Mrs i ah SD eMaC a t h r e i u ( sh G l . N i . y ki , al wr SD) r Ho,i ) Grld..D nmr et rPog.N D(r) r .kanr A r ho C a a D n l ) r P a t ,,.E i a DA(raoaDDd tPNg l . a D . h K ( B ( B P r , a G , , es..gg n t ) . , . ) ) CscI a aT) .Sg p gkrs i a A V M RN . t h u ( S C r dnDM hu. adp GL ) SD aSLC h r a e n y ea, ),h dS hi uSS l t hC r SGDDn sl ( d nLMV , t s ( G wt i ,(a a ) g n) n ( Sae i a aa .r d lD a(S oa aeh Kal m ke Va r i g ( j h a h n a r ni (uMp e e uD V(nprreBagr M C j o l kci u h r l e o e u a l o n d K r . , a ceh . r ar i e p vAa d rh bdg aok h t aS hDD a o(BKnyD auAKCi t a y. ps Ls pae mS ar rSSa a n i t , i . a l . s i r ) l baehJ,ar eieg r t aiM r ) S v d a C . . u e c m a D r T MKDVanr.nmt i l fnT a H C d , r i e D . a h o i e hu a ) Kv ,Du ,Di a T GD .R) dt ) t sno) sr n . h n . ( a e e E r a e , J ue , r t r o( ) a r SSg) uah iu hg( t a R s g M S ,(eUNSMPe SCDDHr S .r dNnnlD. . ln. ddr oDr l l H . . .s . . .r en i s s i i s r r r o o nnD a a a DM Za JDMD Wa M( DJ DMDCJ a A( JC( The contribution of the omnipresent, omnipotent and omniscient invisible hand cannot be expressed in words. We can only say that our faith in Him becomes more and more intense by each passing day.

t a e r g e h t t u o h t i w . es pi e al hi sm a tf n r eu s e o r py b sd t i e d ni ev ko ar t p rt e vn ee nm e eg va ar hu o dc l n u oe cd n ka ot or bo p ep hu Ts

I-7

e l b a l i a v a g n i k a m . ry ol f e ym r i a t r s be T i t i N Ll i E ai c M t E aa G Tf d D E nn a L t a W a p l O Re N K fh , C ol A fa i f r a e t t s ea hm t e c on t e lr u e ff e e t r a r y g r a es r s a e c ee Wn

I-8

r o f N N A M X A T r e h s i l b u p e h t o t l u f k n a h t e. r y a l e em wi t tk s o a eo l b es i hh t t tt o u no tg u n bi g tn s i a r Lb DR. VANITA TRIPATHI

MS. NEETI PANWAR

Chapter-heads E G A P

Preface to Sixth Edition Acknowledgement Contents Syllabus

s d n u f l a u t u m n i g n i t s e v n I :

CHAPTER 10

s d n u f l a u t u m o t n o i t c u d o r t n I :

CHAPTER 9

s i s y l a n a l a c i n h c e T :

CHAPTER 8

s i s y l a n a l a t n e m a d n u F :

CHAPTER 7

t e k r a m s e v i t a v i r e D :

CHAPTER 6

s e g n a h c x e k c o t S :

CHAPTER 5

t e k r a m s e i t i r u c e s n a i d n I :

CHAPTER 4

s e i t i r u c e s n i g n i d a r T :

CHAPTER 3

n r u t e R & k s i R :

CHAPTER 2

t n e m t s e v n I f o s c i s a B :

CHAPTER 1

I-5 I-7 I-11 I-15 1 22 70 99 135 153 187 233 269 286

B.COM (HON.) 2018 SEM : II GENERIC ELECTIVE IN COMMERCE

309

B.COM (PROG.) 2018 SEM : IV SKILL ENHANCEMENT COURSE

313

B.COM (HON.) 2019 SEM : II GENERIC ELECTIVE IN COMMERCE

317

B.COM (PROG.) 2019 SEM : IV SKILL ENHANCEMENT COURSE

321

B.COM (HONS.) OBE DEC. 2020 SEM : III GENERIC ELECTIVE

325

B.COM (PROG.) JUNE 2021 SEM : IV SKILL ENHANCEMENT COURSE

327

I-9

Contents PAGE

Preface to Sixth Edition

I-5

Acknowledgement

I-7

Chapter-heads

I-9

Syllabus

I-15

1 BASICS OF INVESTMENT 1.1 Investment

1.8 Modes of investment - direct investing and indirect investing 17

1.2 Features (or factors affecting) of investment 3 1.3 Speculation

1.4 Investment environment

1.5 Types of investment (or securities)

1.6 Objectives of investment

1.7 The investment decision process

1.9 Approaches to investing - active investing (Investment) and passive investing (Investment)

SUMMARY

TEST YOURSELF

THEORY QUESTIONS

2 RISK & RETURN 2.1 Risk return trade off

2.8 Impact of inflation on return from investment

2.2 Return and its measurement

2.3 Risk

SUMMARY

2.4 Calculation of systematic risk

TEST YOURSELF

2.5 Unsystematic risk

THEORY QUESTIONS

2.6 Expected return (Based on capital asset pricing model)

NUMERICAL QUESTIONS

PROJECT WORK

2.7 Impact of taxes on investment return

I-11

S T N E T N O C

I-12

PAGE

3 TRADING IN SECURITIES 3.1 Online trading - an introduction

3.2 Online trading mechanism

3.3 Price quotations

3.4 Types of orders

3.5 Order conditions

3.6 Placing an order?

3.7 View/modify/cancel an order

3.8 Product types - delivery-based vs. Margin based trading

3.9 Buying and selling of shares: using broker’s/analyst’s recommendations

SUMMARY

TEST YOURSELF

THEORY QUESTIONS

PROJECT WORK

4 INDIAN SECURITIES MARKET 4.1 Structure of Indian securities market

100

4.2 Primary market

103

4.3 Secondary market

109

4.4 Market participants

112

4.5 Regulation of securities market in India - (SEBI)

119

4.6 Developments in Indian stock market since 1990

126

4.7 Recent developments in Indian securities market

129

SUMMARY

131

TEST YOURSELF

132

THEORY QUESTIONS

133

5 STOCK EXCHANGES 5.1 Stock exchange

136

5.6 Sources of financial information

148

5.2 Role of stock exchange

136

SUMMARY

151

5.3 Stock exchanges in India

137

TEST YOURSELF

151

5.4 Securities (Stock) indices

142

THEORY QUESTIONS

152

5.5 Trading mechanism on exchanges

144

6 DERIVATIVES MARKET 6.1 Introduction to derivatives

153

6.2 Classification of Derivatives

154

6.3 Participants (or traders) in derivatives market

155

6.4 Forwards

156

S T N E T N O C

I-13

PAGE

6.5 Futures

157

SUMMARY

185

6.6 Options

162

TEST YOURSELF

185

6.7 Financial derivatives market in India

177

THEORY QUESTIONS

186

7 FUNDAMENTAL ANALYSIS 7.1 Approaches to security analysis

188

SUMMARY

224

7.2 Fundamental analysis

189

TEST YOURSELF

227

7.3 EIC framework

191

THEORY QUESTIONS

228

7.4 Company analysis

199

PROJECT WORK

229

7.5 Stock valuation models (Valuation of equity share)

218

8 TECHNICAL ANALYSIS 8.1 Technical analysis

234

8.6 Principles of sound investing [Do’s]

261

8.2 Basic tenets (Propositions) of technical analysis

234

8.7 Pitfalls to avoid while investing [Don’ts]

263

8.3 Trading rules/theory (Technical indicators)

SUMMARY

266

235

266

8.4 Charts

237

TEST YOURSELF THEORY QUESTIONS

267

8.5 Limitations of technical analysis

260

PROJECT WORK

268

9 INTRODUCTION TO MUTUAL FUNDS 9.1 Mutual funds

269

9.6 Types of mutual fund schemes

274

9.2 Evolution of mutual funds in India

271

9.3 Establishment of mutual funds

272

9.7 Latest developments regarding mutual funds

279

9.4 Advantages of investing in mutual funds

SUMMARY

283

273

TEST YOURSELF

284

9.5 Limitations of investing in mutual fund

THEORY QUESTIONS

284

274

S T N E T N O C

I-14

PAGE

10 INVESTING IN MUTUAL FUNDS 10.1 Net asset value (NAV)

286

10.2 Types of loads

288

10.7 CRISIL (Credit Rating Information Services of India Ltd.)

296

10.3 Investing in mutual funds

289

SUMMARY

304

10.4 Factors affecting choice of mutual funds

TEST YOURSELF

304

290

THEORY QUESTIONS

305

NUMERICAL QUESTIONS

305

10.5 List of mutual funds in India along with their websites

292

10.6 AMFI (Association of mutual funds in India)

294

B.Com (Hon.) 2018 SEM : II Generic Elective in Commerce

309

B.Com (Prog.) 2018 SEM : IV Skill Enhancement Course

313

B.Com (Hon.) 2019 SEM : II Generic Elective in Commerce

317

B.Com (Prog.) 2019 SEM : IV Skill Enhancement Course

321

B.Com (Hons.) OBE DEC. 2020 SEM : III Generic Elective

325

B.Com (Prog.) JUNE 2021 SEM : IV Skill Enhancement Course

327

BASICS OF INVESTMENT

CHAPTER

LEARNING OUTCOMES After reading this chapter you will be able to  Understand the concept (& features) of investment  Differentiate between investment and speculation  Know various types of investment  Understand direct and indirect approach of investing  Identify the various components of investment environment  Learn the process of making investment decision  Know the two modes of making investment

Investment is the backbone of any economy. Savings of an economy must be channelized into productive investment to generate income. An individual may keep his savings in a bank account or invest in financial and/or real assets. In India savings bank account does not provide high interest income. Therefore the investors, who wish to earn higher returns, have to explore other avenues for investment such as equity shares, bonds, mutual funds, gold, property, derivatives, etc. Hence, the need for financial literacy on the part of individual investors. This chapter provides an overview of the basic concept of investment, types of investment and approaches of investing. Investment refers to commitment of funds in expectation of future gains or benefits. Every investment requires that current consumption is foregone so that in future some benefits or returns are generated. Different investment products have different levels of risk and return and hence their estimation and analysis is an important aspect of investment decision making. An investor should make his investment decision depending upon his risk-return preferences and analysis of risk-return features of the investment options. 1

T N E M T S E V N I F O S C I S A B

n nntrt.ti d c mo oneoe at oi ehnr f t t r n g r s cp n r i ne e ui nmeuho m c rupcfd en nr a ssso ia t o t e en n o i n o r o o on sev oc el i gt t a n m e W s a sti r t e.e ps dn oi r hf ) n e nec c s uri rivaiu t a s r n h fu o n t o e i t r at tc ws s u e n s e n g a ci tv on efn i hl r oun b st r ue itesum connreeA ci e m m t e A i f m , fi i a u t x o .tht re d e se ql c ta heetAsp n o t v im . ests s nnn e to ev ss me i nornC yi t u e ni la op i tu , s m t l n n c e g d p m ti a e r n s n a mib t i e ev t et avrr r o I e a pune s rds . e i c t u e e s mu . vi i fns r t l a f i o h u t U u p s s n f t r s , t i mu e e st e n t i s if hnl I m i e t t ine. g n e t v m a i n n on s l eimi e ohno ti i e v mnop o Vn t e r trc dp ( n u i t i s nma v t mn e i f u nAo a ved snur eCt nre nos a Ux i i et n o e to uh t Ve c c p ma t et cgtan rp ru nmesego e x y u e s t r c nc i enersuanc n r w e t r e heo uou lH h at Tmf a ccf f e n, rh i a h et t i yr wet e d a l nms aar s cea i e l hy b utn ne pI t o. t t s%u k0b c0c o0i 5 t l s rb se u t vp i doo edt r e e k s f c a f o o et r tc s s s r nt i i i f ndd a oh e i r t e a ef r ouf plo raot . ovs lc Csa n tkru f c ef o o de st nd os re os c i hWa Mtfw ,oy ,s 6 n rsa 8a dp 9e l 1y r m n0oo I 1Wc

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fnr no o a r/ s u nl e t d i n pea F r .me s d t ahn e xTe s e.d s a eci t lhe v a i T i s d c . t , nsi t n t ae s ue s ns i r d f a e nt nl u i n a fi si cl ds f a ny uo uh t m fp u f/ r o lmo ta ,f n es e erd h ment tmon s b o, i e vss s nrei e r i t svan i . o he e t ssmu n l emeta r s ia ma v e tl v s n c s t ni e e i ves n lo nrs a a i i sait l c t l a a a e n i i i s c c a e nscn r ip aanf a l na nfp i if i F oa c

egeg r hi n n e oTd hl .i l es s ws u to e b n hc, et o s r t ep mr n ta e s n s e om t ve i p t ns i c i u s nauq d lo aa e , s r y iep R r ). e t en s n hi t ee t h ms nc s i ta a s d m e ee l vb st , ni un I g a cnel i arp a mt h e rc oo r nl i a h oa s ce wt Er e ss rnt s oiea d s ( s e l tt a a n s e ) ee r d mve f tni xo i s fs e e vr re ol na( I s p ld mm. a a nr c eu xt ee Rf e t

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2 Para 1.1

This chapter provides a clear understanding of the various investment avenues available, modes of investment and process of taking an investment decision.

1.1 INVESTMENT

”

1.1.1 Financial Investment vs. Real Investment

) .t. o t c e n s i t lgo e e o i v o t f ,n t t d a r i nio s c e e ot e pi ba r t r p tse ,s s p r e e opa r o lt a e a s r c hee i vpr sr l ysnap i i y t c lr i o a a u t d uee qea dmu ( i T s wvmd i N t n E eodoi ca n M sNi /g T s.f el ) S a. o s l c E a a tui t t V i N cerop I nraha F aepec t v O l n l n r b S ii i a s o E f, g t / r R nd nd U iloan T sopta t g A s mnt E e in i F v nte n(a n r i rseeo f t m oe mt t s s s oe m s e r vacvo e nf nyb i i t i e ld oi sh a s uol et dmat n s a i i v m t a i e s ohe d m 6 nA5 a.9 s ne 1 i i f t , i t r su c i A c) en s o fi o t a l mu rg oe f R e( hs t t nc i a t yn l i o r C a ms ii e r t pi r eu r -a c e ksS ot e os e bs h t sar i le h a t i d c fn n o au rnd e ie t F t n .i a t f mne ed tm c s t es a j s e b ye t uvi d snr

rd e e ha t t o r o rp or o kc cn oi t s y en r ua t f n eo br eo dn ,i s e e r ur u t t n ; eat e bna eer ko di ,l p s r dao n c ofy bod ,so e s i ki b t cr r ou e t h ct s ,eo s s p r i e o r l c b y s an t , a se e kp r rm a hao smc

t n e m t s e v n i e v i t c e l l o c y n a ; ys be m de eh uc ss s i h tc n u es mn ui rs t r s o nt i s e rv e n hi t o e h yt ; no e a t v r i e t om a v se i t i r h n e c d us ) ) ( ( f io t i t r un ce em Se c er ho t f fn o 2E d nn oa i t s c t ee s s fs o A ) ) ; l a 2 i (c 0 0 en2 s uaf n i aF o l c 4 f5 no ( i 2 dn0 eo0 i nt i c2 f , ut e drc t ssA n a t o s tc e p r e i e e t cRn e I d r ny ya t t i i nr r u oc ui ct e aS es s ) ( y n a r e d n u s r o t s e v n i e h t o t d e u s s i t n e m u r t s n i h c; ue sm re e h hc t s o d yn nu af rl oa u st t i u n um ) (

ry nhdo a acet i ns m oh ge t i e vs dws s na eya i t ui c ,he st s ntch b i u ee , st ) d t d s fa c o en e l tt , lt igs a a b s ci gee r t edr e d t meon e asmi g no la p a g g i rr nc t e r io vuif epde u l t nm l a a c eg i hc n bn i we, i gd n ype l i u bsb g l a ( c t adn g v e n i i ne l ei wl e c mee ob ubr n a rrr kv e t i s uoce a ns t c i sbde ri r oyenr d a en , o y t y an a t t i b cyat i bsne f i eed trs r oshh e t c c e s ce uu s yv s se s ; oo nn nb pt ai i ) (

n r e v o G l a r t n e C e h t y b d e r a l c e d e b y a m sd a n ; t sa s e ; n s i ee t i i r m t i u r c uu r e s t c s e ns t i n e e rb e m h o n tt r ot e n v he c o u m G s ) ) ( (

viii

“Investing in stock markets”

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tl ncn i u ) i l ( d ao eluc c e c a e nn h en i n T A amRi c s i

Para 1.2

iii

vii

d n a s d n u f l a u t u m , s k c o t s n i t n e m t s . e s v e i n t i i r h u t c i e w s s n l i a s e . t s dt s e n y r e l e i m t r n a u i mt r r i o r s n s pi t k h e v g oi i o t r ba v ) s i ir ( h e T d

.ei skhc s s a g e mt i i vo f nr h i t e t c y c yr a nmh r ei a j t e t rs b vm e t e oh i c tr va e gn ni p i ifge h a feoh t fo htt r o e let s e ci v o l e i b t dat v m i c na es o i e usc ob j mt doe p nror b e s e i e f d vyf t gr eao a no i mwwe p l n i oa d eit a H r enl kou tt o . ti tennn r h n p r s e Tui m u t .e te t mue i r ts r ,r s d n u e e k t z n vou i s c a i nt fmh r i i n n o ee x n i kr S ai n ar . omdk mut s ci ni d a p so r nh r gmae oe w t o s rukvl s s e on oy i vf r nyorme i ecenv z lh e i rt a tcm ua ul dlnitn e a e n i i r r rhm v i e u d dt d t f none nA at ar I

1.2 FEATURES (OR FACTORS AFFECTING) OF INVESTMENT

ed bn ta s y ut e mf a hs c, i s h t i wf e sn r e ob t c x aa f t re e b T h N ty E Oa .m M l T a S ut E dn e V i N vm i I d t F n s O i e v S C yn I ni S a g A n B yi bk ta n em . mec l i th t s e e , vwy n i t d i nd gi i nmu i q t i o l ct e , l n f a i f t a tp i p re a ok c t 4

Para 1.2

: t n e m t s e v n i g n i k a m e l i h w d e r e d i s n o c e b o t s r o t c a f f o t s i l e h t s i g n i w o l l o f e h T , daqr ose a i e a y r n e pdae e st h as y su re f e vrbo opnd n nxoe res t r un e e t h e e p t r mat ft a o sfd i ee en t vl a e np r i d i nymv i ai b a xd t es r d e era ct o a er F0 de .1 i nts v oent rgee p mg e td om s t e n dov a ecn0 t ni c eif0 peo1 xhtf etso o s si ct i s t eo nh n rt c eu tfa me ot tR s ea e e v.gr e a nr a t i un h yt es r u cy e fr t vn ei Ei pu 1. Return

o t s e s a e r c n i o s l a e c i r p e r a h s e h t f I . r a e y e h t f o d n e e h t t a e c i r p e r a h s n i

ry i r e r ha t c ns oe i gt i nr i d u nc ee ps . et . s dv e sov n t i rga udv n t i e ar r e )d ts n l l d eb i r n e a T f f ( s i e d s l r el a vih abs y hr y su t t i su n a ee q e mr uTo ret t l d s p e nm r i a t ap n exm e mr o to c s Fs e v.a nkn s i i r t r u n ft eo e r e lr e f f vw i o el Dl

.rtg ee.y t e ti e l n e t z n l s i r p i vee i p l e oe i vt m dmmob n wnbeiaea n d t i eorscixpg e e nh e m e H i n di vt ac p r i .o r r xooea e r ae mt t g i u e Ft e otrsc s e . e b i f e e ras r h i t f s e k kk r t n i s nssttf i etdr i i n n n rir l i ueomb ae ure n o t o t h e nb mosadt C l n e r i go onr t d vn fst a i e n a I n i i ni i .edevv k a m n o e r p e ah r re og yt d n t n e uhd rnd akk i t t u s g i e f i sn Eoro ns r a r i t n i eo hb detrp dh c n u n r et v e c i i t eee at c r eehot h d k c s w r er eege t a f pu i sj n s f n h xssi a bi a ( o e%i e cdoded s) i ts n0 i teeeke i v t r a i y0urbahatb 1 T l e c t h t ct i ys dut .s de l i au sb cn l c n l b laeamm aatei d c u n b i m t r d sn enuet dr a i em gpbsv ue vx i e i e m si fneenvd r r n h a a t n e n . ,e t e s s dnvv ciir r e o eiooykntpvt a a n s s a t e nr n Gf p i e s r i i r R e o e f e , t m e e y e v n sr.of r l dcl e e n e o f o r s i a i e c t f f si r Dge r n i e d s te f nr ae h .u kn nt et knk l se r s i en su sohf i a i i RmGi yTo r f tr

t nseen t r he ae a t cs t tx tsea a n e eemht a m ote e tmsr o r d s e g e S h n v.a a no nl a ) i ot . t c i hi t t s cpe n d a i e h ct n sm e wfi p o n oe hs ut t d i s ts dn wl on t a ef e ur t s k. of a r o t l eka pai sum ei n mi hr t ild t eus a l i e i m t c t d t i n , I a tl s . a r n re) t n eorsi e s a f moh r e f i u tns t o s t i e r hyn yu t t vi ec i nw c bn u i e f qees i d h o c e ses ,f i a h ft sc d s nef e o(o do nt db ny yni eiu ai t t q n ndi d oel i ( e t u mr ydm q l e i i h u pl evg n o q e i ho l i h h l t e t sv sces i ereen tb aldo I

e.g.

i.e.

”

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es bi nd a c t( e d s i s u a q i nl as s he cl i t h u wb e hl t b i a wt e ek s r a ea em hy t l h g i h ye t i b l i b y aa t m e kt re a s s ma sn i tA c . d el po ss a r do et t h a l g e u r o Ab

e.g.

i.e.

% 5 1 =

e b d l u o w n r u t e r s i h n e h t 5 0 1

100

e g n a h c o n e m u s s a e w e r e H .

e b d l u o w e r a h s n o n r u t e r s i h

10 × 100 = 10% 100

× 100 10 + (105 − 100 )

` `

2. Risk

3. Liquidity

4. Marketability

a s i e r e h t t a . hd t l o ts n ar t o r t oh pg mu io sb T i N t e E i M eb T l S bn E aa V tc N et I ki e F rr O ae S mh E gw R n , U i y T et A bi E rr u F o c Fe .s ) e y t h r t e r po of rt pe fk o r ea l m a s y sd s a ee r t r

Para 1.2

ndeg. ii f t aemnn i k t nr noke i a c i e m tc t nr L n t s esyiee e e d t md l i nv b u tv iq n aui s e x hm voEa r c t np S i o i r 1Smhf f6 w o 9Lo n r e1Ertu f n , v, s at td i nt t c e rr o c ni eAu toe j x p c b v aFu i oT l mt d i c teae se u n i f amtds f t ourt e r i l ocMof f n a e , pI n u ye mfCf t c i ioSl b rCNa a x , e u e 0F ah h8 q t P t t f n o Pho s no c t i c ai te t h n sc f w e ( e i f eSs)ma t g.e. s c a v i s ai t i e e t dt e s s a n annssu a vIreAc n e m.e di t 0 at l sa e0 b h0 xe t astc,n 0 n s t eS5e a , gl ms1 m na g t t i i nos l s ic i e e a n v t v v va ap nS n Ani ui 5. Tax Benefits

e.g.

ht e a d t b i i h v wt d i l sdu te no u ii ol p nw em ae mi t fa otI r cI . x .a t ss s a r e hatr e )emt Cy n o ri E0f x R1t a (rp t o nf m e o. er i ax t p . a ee p r v o ei p%bt r2lc 1 o. le i f C8 wf nfse ood e i h ent t t a on a cr be i f i neh r ost t e c p t he eu l k otc E cma la a or r r b utf x Raea :smt ed % o n l oc0 p n 3 mbi n aeti xess erei r f e r-t l x oa a nu Ft i 8.12% = 11.6 % 1 − 0.30

to fn fd. ryi si t e b n n , eha w ee e odhlmt m peyptryt e t m s o l s a n gr aewne o v o ne v x na i lmn e n s n i i ee a rr efn o hgh oroi Ff cnT srn r . kieo ur.f e f u ohwi pt t t o oeoa eeaels r p hrrsdi e w g n r l e t d n i thoouri i e s t o w s s t h n a nta sht l o i s a hc i f a ct ror ghneo n n atiht rua g e es p u erns e t t i gul i s r ve e wn dsi o rd a env ri p e hee e%om trhh8ri es e t t po du n n , n i , a ao % v met s o hn8hii rrte ttn a s ponmi l e fo t r n i dsateo t h s t I e l a u vteam.l f onrvr nn e n n e w hih i i do oi seg gi t s thi ntvdn a h o n T i oi l rg f e.sk a p n a i mn lg l otmihi ti a s tn gcwe e n y e i a i tg vf h l mbi l n d nn w t a d ee i s i v e h m s d et e i n t r e orvf s c oonepoe i i k n n gs t e ve s eh p i nh ih Ar bt oi 6. Hedge against Inflation

r si ye nt oi e i i t ui h t t q r a . l eutn f a , o c n n i h e i t os t t a i s tf l t ec na i n lmai a f gnofg aicen f h n i eo t i s gs i dor de etf em xeo hi i dtfus ondde i nnm ot o a ga i i t ahht n etrai l d e f be e n h s ot i t c a t o t e e s dp en r ex c hi r n etai e dsngt a i i Oe t s o I n. n .g on n do crre uuhd et t r d ee a dn r r oa sg r e o ne r d g i h a e y gax hr i i sa tf yvhoe t renr i t i u e a e a r qhe r e a et t ,fnsa y o ed r l l egn t a s s soe r u e b e r nar e e c a t ee kn hi Gb sl i

lh, s s. see a pgigbm h i n i oe t h c i t rt nyo h i r adc r r e s peFd r v . t e syf nei i ods h a i b o s b s p. edt n r s goes eo us nncdl e cs i eds eesd e i i r r s i v x a do tpe i t s f s m n r t ui g he p s n t mee m i ni tw t rbvi a n s t oo i erte t v s ntlAun o n o e vdurAei l otAm f nu i nn o o aa eomt y ct hhar s e e h f Te hotCa p .h F r t t e s Bs fmw s r i t i i i Nu tn f oyb tn l eae ae ne hm mT t yvaa o. t aamr cs s l h e p t e t ds v l h s l e s p n c e u e i r m ovii h n e c n hi at anwx se n e i lh n gsee a d o r t a hn v no i i c p t airgoFc b n . chui e a t t y f r fwe a l t a l o trr t s a n f yu r t oa o t i e sn e o ednt a f e t eot ma a r Gna Sar c

7. Safety of Capital

T N E M T S E V N I F O S C I S A B

1. Don’t try to predict market movement

2. Don’t expect quick returns

3. Avoid chasing hot tips

5. Over or inadequate diversification

6. Use of borrowed money to make more money

skeu ki nl ls scc ri i i k ne uwr r s t e i ter rh e p n l e r s b eh d eea h dl g gmr n i t o r a t h e a s h dt a l s e i s hat yvs e r s l nntn l s o i os s a t i s ecnaae t e a n h fe nv mr eto n t t o nmnui paokite a h e i g s att igrr a syprehl t r t m e g i l a e i l y u i b f r h l f b l sa ua o asr skr e s tbad ni e a o e e r n i hr . hs es t pt nmhG n tes g omi i e .a l a h o C s n b g s C . o d a e a n i k . e r nn t i n no c a u a i as i o g au f sc i t nae s q e i e e i dt c he s trea t k n resi eabudawa ; my nsee m n n h v tkae i i o s sc tt t e d t i a tmc l vr es I u e t m a ny. s f ce i rsof o se s caev s i p og ns oSi nvl t nt.e oai os e i tmbs t l n n e s a a i eu a ca l d i i u t u s l c e mu ci bi v f e dof t i o eot pu rnu r ha Sbp ispsl

. , t s tos e i e x o r e t rk n n a d e oh r essn i a bri at T o dt,ta.m l a s e nl u k e kcu au c o sc rel a p l a e t l , s s v m p u n . l 2 n bso ea k v i a 9 t -rt ci i 9 saaosnd e 1 s l e r t n, u e s obc t cmIc t e f x n e l a a i l poediA h u I cwsgrnnB o u e tnef i E t psaive e a sehnw S o t c i ulr i fr et orue o c c r spenHted r k p h e u.i n e s c po u dfyh t yt e h e i t s t ve t t d i i oso o ms n i wnnouos l q e tieml rc e e i d s bs fx ha i t trdyeu i e a n s wr uoawng f c d dn lyaon ma ei tsk i i t i tI e t ca f u i ces tc.n i n e s e e i n rhl pe s t pcu ex cs n de i e oear r i spschss sr i t u i n e po o t s e tt c i i e i er e i a r e k r k kl a e n a ru I v i hpt a l c B n t t c h i mee i a a g p R sEu t d S ks c t.na o l e i l d d c ou a r r ao eam t h Bp S b bf t

r,te s i L oI i fl f i p rRt ofu m t obi s e sti t e vr nn na ee i mh nht t ass een yl bpvu mnr i da t l o r e x t o he h s ert s n bo r u Fo e n. v an o m co a n ti t e r a m s u l s t r u a e e c r t ee k mpgc n aso i r s u olq ef r hr og t efn th i rk a t o ho a t t s m ee eh vr r tn e o hyif l l I dba I edm F t n o n. nasa a n t en o y i beyb t a tmbdl s d u l utl s e c meeh h e v p ni ti ss fi I

: s d n u o r g g n i w o l l o f e h t n o d e h s i u g n i t s i d e b n a c n o i t a l u c e p s d n a t n e m t s e v n I

n o z i r o h e m i T

d e e c x e y l l a r r a e e ny ee gn go ng on Li

. 2

k s i R

e t a r e d o M o t w o L

h g i h y r e V

. 3

) d e t c e p x e ( n r u t e R

d n a e t a r e d ot mn e t os t i s wn oo Lc

t n e t s i s n o c n i d n a h g i h y r e V

s a t r o h s s a e b y ay ma d ta r ot r hn Si

. 1

Speculation

Investment

Basis of Difference

6 Para 1.3

Don’ts of Good investing

4. Don’t blindly follow the crowd

7. Don’t fall in love with poor investments

1.3 SPECULATION

per se

1.3.1 Investment vs. Speculation

T N E M N O R I V N E T N E M T S E V N I

. c t e t s e r e t n I , d n e d i v i D

t e s s a f o e c i r p n i e g n a h C s r e or t a c ay f n la a p t n emd moe c s a y e dh l nt a uf n Fo a

e d i s n i , s i s y . l c a t ne an o ei vt i a t c m er j b o f un Si

s d n u F

. 5

e m o c n I

. 6

a m r o f n I f o e c r un o oi St

n wi og rr r oa bm oo sd l a r o s/ r od t n a ag l u n si cd d en a pu r Sf t r o f d e s u e r a st dn ne um fs t ne wv n Oi

. 4

Speculation Investment Basis of Difference

Para 1.4 7

TABLE 1.1: INVESTMENT VS. SPECULATION

,tr .sg e n cuaii ablt Il u r .b. ygn ee m ei t s nr aai r n oorggi hmo’ set ru . ty o n g t p i f er e s tbtar s d p i n s en s een r hu e Tf mko h .f eact r m t o toe i o c hs s st r xe ni en o ssol s i sn ee ’ o t i ht e l i t nwe e sr l oes ’ e ep eh un vm mt a ooo ce ohe sc sg bmne ru oiv oo n l f rswo h y – u nt v t t el n r kaeea i a rmp y e s t a a r r a gem e e n dmo dHe d n.i futn us a i s e a s h er i s ot n a me r i ea tle at c c z t go nr e a l e a, bah c scn sti se i o gmn gyu na y nnbl i i l l a g h y b b c l g e mdtmr i h r a aa au hG s Gc pi t 1.3.2 Gambling

e.g

eh r g a u ho r ch i h t ws s se e c i t o i r r up cr eo s fm o s si e n pa yh t . scd l ueo oms i r er a r o vit t snh e e g i l u e p ho mt b id e tn b n ean mta nnc oes rmi e i t v t i nsr e ev u c tne n i ers e mos tfe s eh e vlt nbh a i l c i i ea h hv w Ta

1.4 INVESTMENT ENVIRONMENT

. ,sdgyy s e, s r e l d he a n l e t a i i o l i n r t T t m t u g i m a a t u r . c l e f h s s u s i s o g t s a f e d ce V f e i i o e y i et t h k( i sr t d s dc ir i l r A a a -u u a uh u s r C q sr ecc t t m c ( ee eu c e U sasm es sg s V p; e a nnset )t i ss s haoesu i v a i e t a l h c i r l n ho t ne ucu ud a h i Tt x s b v a mce .i i sedr s m ez , s i w e u s r i neyr t d a d erne i a t t i e n r es d y h r uusc nsc a e e t hi e cfi ns r o i t lr elt a ee a i a s e fi a r h d hh o fuo ci r t c t d o t sne u mueo s c a y e u m t t s nmi nn i e i r ,me r i frs y s o e e r e pr v e a. vn t a vcEa mo d) n vi w n . s t ) osia i to aa u s ctdn t l e v o n e s a en n w ts i i u t e r n saog mo te vet ea)n s i n d m e t le ma tb v,i sm e s s ni o o knm ne uvr s i ocre n A r o l f rnam, i nu i a i a d c a t x v n nmne e cnyea ni o a r r l l e f r es : o r rp a bmpse i i ta a r v t e m c f n s deers ednno e h n n , e a a v t s en l mr a tC ndOou , r i tr n i f . n n dpt s e c no e .ei noe f t a e ve m Abe apb t . i nr r te ( i s eosec s t v n l ha e nU T( ki -

i. Securities

rh dio c nr fi u ac eh se t w i e s s i i n t ifu i o r q s uee e cgr p ene y s art fhpy o can xs re e ia l tm lee e h s kr e t ra dea t na me at i r l ye rc it e ih yar ufuT. . bocs d t e e e r s i i m t e f i d i se hi r s t u s n p e a cl gaoe c ohls e c t e vnb see i g md tn nld a i a nc r e n bna mt o t e tt i t k e ansr e kr e va re i a n c m p i i mo f f s d e yseei e t s t i dna i r r uiAeu v . r co s c c e er e ns i Sp t i

ii. Securities Market:

T N E M T S E V N I F O S C I S A B

T E K R A M S E I T I R U C E S

f o e r u t a s ne i fi t o r su i c s a e bs e h t n O

f o e m is t e fi o t i r su i s c a e bs e h t n O

y r t a e dk nr oa c eM S

yt r e a k mr ia r PM

t ye ek nr oa MM

t le a t k i r p aa CM

thse t i n t k ei t i r mw, a a tl si M s a d e y vent i ndIu i ynq l l I : ai E i r s . c s a a s e n t mr d a n i u e n r e i t ip f f n m i s teg m s I b e a r) .e s l e c rdo t a s ge dw i nyn t t o e ag k le n r rnsi o d o w a f . o m t nnl t e l e aoo s k k hbf e r r t i mea a t e i hM rt r mr e u ot ot e c h m tb e t (gne s n i s sl , i odD e t e n e i , m l f s e i a i e s mr T s s e uaal f o rhlo c t s s s rh i n e y W s i t h a i t du d b r nqu n e aef a h t n ) O ( a Capital market

.a l ) s i s c e r l re om rm a eo yc es na oh ( c su e s i t s i t r ub ce ed s m mr e . rt c e t t t e trs o r t ohi s h, s o ss l p hl ie t i b d wy f r su o l a s ese a t de a r c Tf i ht i t r i e wc s, l r a e ep da tp I ) ( r e h t r u f e b n a c t e k r a m y t i r u c e s a , s e i t i r u c e s f o e r u t a n f o : ss i a s a d be i ei f hs t s nl a Oc d e u s s i e r a s e i . t t i e r k ur ca em s wy er na m ei r r e p hf wo l to e ko rt a a ms ei hO t P I s. i e m i t t s r i f e h t r o f ) (

gn ni i d t e s i u x s es i es r e e r ha wh S m. rl d oo f t s a r l o p t eh . hg t t e uk so e r dba i em v ory rar s pe a ht i d cr in i o h uc wce es s n )i d d ne ad ha dr nt oe cr ea s O rP oI ( ) ( b Secondary market

a Primary market

b Money market

.ye ffpy o lb itr eh i e hdsr g p r u t . ns wnecoi r n ep t ge oaw t s rn gk g ortar e a o l r fu l ea nsa o i hp m csa t ri s e tii d rnf oa srsdn f rnadno p lta nIb o a n a r a s i i t nbt ,y e t e i i n r r t d oet eme s i nfkn r e s t e t a u e pme es o mc k t sms i rdr s a e a e ts e r v nh e keunmot rhsiybo n r t a r nn oa i mtef i A t edhh a n .h yy t t t i ow r ts w a c mt i oo er u moe r inkqsgg r , orea eo pc r a i ct e d gemr nd n nnypI ee i hr a a r n nda a si oi nd i i p t n,enm s s a c l ntoep o n i d c t ue me c ei fm rap s s lt tuxoa l e snceld e e e e wv r vn s i c oe fF i nf i Ai dh o

le e,y l e r e gr d a wa na oad st hhn i u wco c tb x e e ses t ke e k rk n i ci a r r os a ma i e t i d S sm e.r a e msi i e t i rid t e r i e r u t m u n c i cr e e s et ts e n e i kft c roe n a r k e e a ml h lr t yea o dn bsm n d : s as dna i ea t tt z rc n i e a e ek r s y e mr r t ue c na abk om e r o r a hr i s v htb e n i cnt e i seb r u e i t u n yws c d t ee t ie n r mS uba t. s s cdr d e eee e . n v s t t n oke a o yi i l k tr r u i r eg e ba s vo he s m t Epi Tr

laissez-faire

8 Para 1.4

FIGURE 1.1: TYPES OF SECURITIES MARKET

iii. Regulation of securities Market

hd dtfhe t e nnotv8 g ae wo2r y m o t st i rmne e c O r i g m a i t a l . i s p e p a r n i i i uet he e d t c l e eDu rnb e , o mt S) hIs a n ( i a lti Id e e a h s Bn h t c e EI n Tnni o Sf eedi . o mHb s soc t s i a k .y i r t hnet e rm caeek om d rt T u B c N sensaao l C E svaemu M ernv i i s g e s o t F T ds ee e ri S oe r p t k f E bR i fr o V r su o a N y( I rIyecrM F oBrmee t t i Ri O a sbs s t d e ,n fmr S l) E ua imoua P gi nnw Y edMoo T rn,si r yIs teo h s r a t bfi F e l i g5 u , doac f d n g er f ne 1 i t c 0 a aAer l o g u2 t y a u d , gBn ne r . y e I a e eep r i r B r b c g o s i E ynmt f m d l f a S a r o e e l e h t t Cu ap h c a d w t gn i ew uxfe oS qEo rat

Para 1.5

ek s hi t r os t a n i l l de ew i f s i s a s s a l e c r u et ba e nf ar ca nl i ou i c t p e op ti r n e eh mt tf s o e vi s ns I a rb oe sh e t i t in r uo: s ce s ei p s i rh fos o gn seo t e i a t pc a yg l t e snr uin owr i o u r l t l a e o Vf r

1.5 TYPES OF INVESTMENT (OR SECURITIES)

e oeyl )eosoy t led. t a r r t s srta s e e s i l l a a a u n t e a r hustuilaoehv T u t y c q e a u es y b nn e o e g .i r f dDs i ae j ye r a e ldm n tt t a r.eeg n h i i e su s o e h t t r i t ri e t i ,e t o. r y ur qfdgdp s o a n taynftugtm herari fcnaeecn r d r e i sne ee doraf rer o p s r d t i yAnyl o u t n s c p t , o e ( m yde .wa l i s g s xk a f h n u od ope e s n i o oc qi nefsspo e x i m r i t r o r Emh e e t el a e n s a :oToh yl e r hdai i h e i l s t n.csuc mh v grv e oye oefi a i g o cnhymrodroi h a r p i s a h eatt ) f t h p y u e k r ee npn eprostr r s i rmiqhaat o a r y E p r t e n e t oe navhr . c i t u e s cd.e r s i s s u o e . l r h o e o r i e a q o y dr h ( pt e t wnh n g s t i fnmedar i t i a e d h u e h nmr a n u s nooec qe i t ev ’iamemyhnaye h ’ a s r d t e r r t s i ea klsei od ot e Hi u hd ccytvf h i a t a q g i n . opt i d e i r i g eiwy t arr h u o hi a f s e u ,hdh l sq r ec potb s nr a nylt r r e oeermnoeys i o re os s n o tyt crdo mw a a euvW( o t n y r n modnfa mea.s r a oneie)see n orenr s t i h v n o s c Camt zu ‘ rhtdteyniai t ssegnnis iyrr t m e r i t e t i e a n d ei nor esrsdenoll hr i t e v r i b ns i i b gf g e eef v a t ween a d e i i r y w yn r h i i i r d op n a r r t aei v g a ne a a hoesoi vv mmh kr svbaHdv‘ .

a Equity shares - “investment in stock markets”

h g u o r h t e m i t t s r i f : r ee hf t f ro oc f i l cb i l u b p uf po ls a r e e p ny et go ow t t de er r a e f e f r o e eh r T a . sr e e f r f a ho si c yb l t i u u qp Ea

s cnet yga hai g n cyl a i i b n oh n r h bu l au g oh wsp trn l r o c i heaa o f x t . gr i ep K0 d r uaep 2 e ohbakplg 0 rsnccoer h e 2 o y ht aet vi fur t i ici sst Be su , ta n a s qI O .b o r r e g . m c P cee . du oe I E e ofm t l c ro t igs yh. se pet g i t r nl D i t el u i e f ev hasy oo f r s b r t r o i r seftoahp s h i y t t hen en t sitg h Ot atOh t Pi sr pnPguo I o aIuhm :Of m . w y ode l Pcohnb h e i I lcca i t s .b y wipe c n h u m r i e i o l wo a pn t b O ulaychlP a s a n pr c i I t yal sn i n sebp a b n e e a t u s m t oee n o h ggr ope t pi yoacemew nthems tv t oe aysa ap n f c pa ve o vhu i mp r n,e o epbimm m u d co rro dn sl ot ec s oaf aci ) (

i IPO (Initial Public Offering)

nrdd e e e ob t t i t s mil i a c me u i i l nlr p a peas ahre o t er r f a ho yh t l f s n g o y e ne i h l n nt lo i ed f ympn bnoa s oi s Oi e s PtOo a I cPl i I c nl ap n O pA oa P t I l.e y ei a uh bt i b i t r n c e i o s c t bes n uht O t sg n. as nn wy ai cy a raed ophf t dso s e r nr e e vaa b nmh i sm rf no u Af on

l l e s r o y u b y l i s a e n a c s r e y u T b N , E g M n T i S d E a V r N t I r F o O f S e. C ge I nm S a i A ht y B c xn ea s ke cr oa t h s s ee hs t e nh ot

Para 1.5

s gdyskt nedaoi i t awor s u ee bo si lr f s i ylney c a fds ae oF o aat n eh sr .o eg s l l e . h m b E cac a [ o i l e rnhi .s y pawan i a ey va a r y hbn spo t cai i mt sl i bpOo3 OumPc 1 PpoFe0 2 Focnh :t tr a Af e sy. ob e b s r s sm te a r e hhc e c sgo u rde l yo D po t ] r i h . n u b s Oe i d qsP r ei e a I e hOn P wOes ePhgFl a nFtn s t t i r,hii o t g p oS s da ux i l.o ec a nyrecg n n h s n oat ui a i pe t k or i ln mn l d dooeno acgwaw ) (

ii FPO (Follow-on Public Offering)

tk e c ko rt a s m, y r . a ,d t me e kd ir r a pa r e t hml y t ys r na u i o s u d e nn r ot i a hcn seo s ye c t i e hr u qta ens e yir ura boh rOs e Pe hF h t i t /e e nOr aPe cIh rnw oae t s g hn e vga nuh o i c r nh x At e

i.e.

fyynydde f eseerert eo l e eeobnni hheronnb ms l ehhi aae ittha eui t n e or t t t t t m o r i p rr sa t l)r oa ca a ote e ee i noe n r m nt t ( x tnrrr r i oa sv rm a s d I e o u u r e i n i d n a e c f t t x e t t .e t dr vn i r l ox on e oo a f I ee w u e l eei r r oci epg B xw oteb u b femxtcoR i o e n a i h a f p r t oriheor ng ar t r, rrftdcodby, s o er e s o r o s sddd e enAod r r sr obt y cefo Cn a f l u r a p e n b a e n n nho a ono s h upaxoc cat uf o i e e t y o e s t b e f b v g o s s s i A h r e a k r , l t d n d ) , r e a utn m n a . a i a t fi dn tsmuas a c d s i a d a y e e n t n o i d s n d B n r n r r f n eordab e i n r oo eianelr b)eeye r I a euhxl cpbubnhopatf o c r e n i h w l dY f omtewsbd a t oeo n e d y y o l c tai i cfe t t e dec r E t y m dni n a t nw aydoheebnku i o l e t b t e a aO N r r o t a t daeqSm( i o r s nprsdyg sre.tD h ut dIooeonanddanns o M r t p R a m n e nt sau l n(cs u R( )y htvA .ysraoi oUge A r f n t l b e o s d BOn s e t i e BCy n r i i d k Ii n e E f d s n r o AR :n a sro wml u odncei w aoootyBnonbretN h w i h , t r n r a B o r . . ) i S sr e o t p g t u. e g r bc i dmu .. s l r o) n i o w e E e n y u dbd H e ttr mtl l t m o o e . a b ng a nb e e l u r, l i atma on t v o m n t f e s r p y i n r bi t e b e n n t l o d r o i e t i e d a i hy t o l m n et fr An a a l ve e i ovei t hr t ldoo nv .et l rr a bnht s t r e l o h e a a e o e e f e t N e , c l s c c ( D a d t t i o a ( t . rimr,e-seaav I r n i d f s s o r l r e a oeddroe rogr d r e An e e uoed u i n e n u e vnteu t r d cu c ne t se xoe ph Ho ae rn eo ei s bso s i lprf ihgutRNb .

b Bonds and debentures

s % n 8 o i 6 t p f o o t n i s r o u p t e e d r f a o r s e e f p f y o t e s s u e o h i T r a . s v k e n r a a e b r n e h i T e k i l s r o t s e v n i o t e l b a l i a v a .

le lna )l ttnfe a e uawor Arl r b t t a d ef o . i n n f s t e g n k e ec e u i s duka CaCl i s g r sc s R i yt eei e“ e h n bnh enBs t o r r a . u dctrea o t c t d e o( n g s e n e t un l es r mei l si fmu s y w i euHbotd s . m on e sr ee n idst e o e v a r e n i a t s omi no hri i i r t ub mmTe d e s h . s o c-d h t e g e e r en t ni r ef s plc b r r i e i e nof edlrsg hn aaie e l c g y e t h g t l nr l l y n e i ea o a d t n unn i r s u r l na a t f uosai c soa cmirg l easaee l r l t i b l p a x ssei b l b e t f . s y h l s t l i o yn r t l e yae b i r i d f r b uo eo v d e p u y scr y u ytsmer a t eeutnaehu s e h e s r s etsh r i Ttah a m n d T c e y eier nr :i T a afryre T . o t tTn t dn p ,s n eni e nen e ei s aarr m moa tun t r t nrnncne i o a rt rfnuce ” o i s e e o t f h e vev c s k k t s v s i on oi i si si s h Gi Gr a rdwt .

c Treasury Bills

d Deposit related investments: fixed deposits, recurring deposits, and special term deposit schemes

t eftes s e l i oso b a l p p ae e xr r e r c aeh i t ne dTi h sv i i .ot eo1t n 6 mr9 ea t h op1a t ch, tur c ni c qe i h A e tw h s dg xa e i a s r Tth e e t s meoi n i emnn shoyo T i l i N hcclt a n E TsI a ul t M .i f s T dsfun S eoo i E tp ee C V se0rs au N ed 8 I v sa F ngnt c i n ie o O t i s i v t ob S n c a E pt ee s P un s Y ox de r T ma e em atd s t eenes he hhu t t t v 0nn r0 no of 0oi. , tt sfs 0 s p5 non e e e r , r r uu c1 ul e t x t t ae e n eor vr i t o .s xex a pa lu . ht a p a tt

tor si e a sl bl ma au eh p h eo cgrp s nae i s fv t o h i af t ss ee e p nr ygea n t bg i st n xi ua ocaw t l i r u o s a c l u l vn o o si i F e r . hfa s cove ne m e uv s e io at l h cpc t ers n ejut b pn mo se nni ra hm e t v ts r oho e t v Gi f : ns wdi e nem ea s ms e e in hh t c ets h oz i t t t t i n i we ec mtdm ise t g n hr nc e mo av omt t o ra ag f e. Government schemes:

Para 1.5

,getr nyn e nnd rli t e eOun n ve b.ou or enme o grr zat nuai n a C r a. )o ob i s s e h d r tr e i a nc em e I r i f yml o if nf i ao0t rs t1re ss e i i , p i e o f % p hu Cp i l 8 t Sy8 . a nou Nb (i dXenq eIcst u nin C oeu sS o s r . e i t e mc l eNb ha A t t d a a n r tx tn ca e u i a f f beT i )s t s n0me r r e a t a 0s m r ce 1e t o dye vc n5r nn I s o, a I t b% .f s eo t o 5s s. n g 8eceC h n( em0 i T I t v t 8 I .as aI d c e n s Ve i vo f t r i i nt n C t e i r c eSf f e fe mNo cos

,tym0nFs ti t cs e n e m r 0oPodr e u o 0 P . p o ems ,a m e i 0 l . . ht r t r s u i5 p n e o cs r n , i p a Sepi1 %e k, n dvmm 7y . n o e nnoa a . i d uicsfd5b , e Fefaon1 e e i o htufhm tr v t f n tiooi d e m r I el ex n. iadwh da l s e i orci i fi k nmo t v i rasx ,al om pueee a r P si tpy t r c ceasmaye o. i r n h t i t s i x y l i d t t t r e t b a g c s i t l g una i r meuu n t h r u oti Pl a o w e t I v er h a .aatmg ha n e nm s di Tl au o cg nn un o in n a pa asr to a i c on h u p 0tht s pi o0 e l t d da tFl5gI s fe . e ew v s s oo n da i m efrs e xr o d y a t o p ad r n t s et b o i h t e s et hi i s end t i npmvgb n aiw n l fi i iI o d Mel nsvd o i . na e htm rn F f n d no p a neuucPs oe o t Pt amnp e n sm im . gtnm i s ue s a n oo 8ei o c e o i pc 6h cf rc v ve en 9c cf an 1s s ipaaodi

ty r%yn a t i t i e0l u l io i y5c c c a hnac t af f 7 hnai s t m aeh e orohT t . rolf r F ao m a e s y .te s o %l r 5 d a ni 2a e( v i oc yto t 6nr n p a p u n tooui . s msffs r i d alotr a f s nr a lwFa i l f i w aPof t r n ddPloo eh.adr r t e wi na a ke ea e owy l ey l t nyn a hd ar t r ec eati r vcah n a n et oeo l ss m ) b l r s e a o ar e r c l wp f nei a p aaa e r lavl a ds ,a b bnea hd t l i ir ica e e n wah r v a e wt l a onfha s No owbi

ti, t i i rs s oeo ppp ete dn geD nme i m t v s i ae T s v , xn t ai i s t do rn p e f ae f o sD sdg e on cr i i i v f ea f OpS tys , s t ii t or Pu s nto aap e m i d D . c nt t y I n e l eh , r tt e i n s f f oo i p d Me r:D . og f .g n sEi e . r y r mt u i ec c i hd e co R s

dssaf ndd o anney v o o r ai sb bh g p neesx e i r e k r ude f n at t oh xc r b t u a e dtree r nets s o e uuah s f r s si e f Tb t n i o .r stiI wseAt o e h Hs on i t l e l Nv e ar a dn tpa n m ni r eoa an mcl Ca neu y rrpFb P o u e p,d t vc ou l tCo s E Gr oRs t s f M,i a r .Dd e f Rn n mA i a di d etBo voAi otNr r e peyp m b pi at n di eme k mo u c so or s sf i l

(iv) Infrastructure bonds:

(iii) Post office schemes:

(i) National Savings Certificate (NSC):

(ii) Public Provident Fund(PPF):

Exempt, Exempt, Exempt

ned omn i a o n ucd. n e n ei xo t hs at i t t e c nr e u I eb .t d n nde l ei vl yud i x g noa eowt btsr a n o th i f o ntal e g ldlb T l e a i r i t N wa g i i lp E l M ncae T oece d i S t eb d E p h t a V t o N mh, n I ete F xnel l O eeri S xmfw x C I an d a t S r t e A ees t B hvi s t e osv ,g dn d o,ni 6 i oy 1b r e 0 e p2en s te o ne i m g h k t d e cu nh ob ot l

tdyn tsde ws t Te h i eaa uI t d npr oEho c fetocRit e r m s o hg e i nc ,e rtnmds i r e aopeeo e bv hc emvh c e c a mo e dd xn hhf ute o ne ,a,csy s s e ks se i d ar t i t t e t i e n i ,anv r i r e u r i u uec vmft a oslacme v v t a e e bi sa s i s ur at e eg t e i sruddvsn e n e u e i m i k l h c d de a ceT i -i i s v a e s c v .o e bt dn i c nu r Bi t ladcep n e :dc e ,y i l ) g l n f ei s b aot cs ( gcs ue t st di e r,un otvosre i T i rr t md m n t t u a n n n o c , v i s e o b e i t r nsr m n i e e eed v t a hs es n r pe be) ,r e hs vt o a eT rnn Fwt v. I T s e as , e a E) he m t s t ( a e a . ts sds t s a v c e s r i e d c i t E o t , v ena i s t r n l s ui vd a i udf e n e r cod e v oR e ewe hn s t db(t i . f Alternative investment avenues

der r c . korodins ni n d t e i a t s al a , n . s d t e s sn ut st dddmnf r i e e c n e e f u ou le t r ugs fa mp t s n fay du lue e voraynSatb a u r u t t hi np .t s m m s g t i u u n i t r n i qyo we mnt mnd i l i t l oee s ds ,a nyn rmke e i e f n u rh ta d tno s ovn ye n n c i i p ev mn s us eom m nn l ufe i m ya oi tfa go t p b moel o c n n e o e e r t i or l tn t d dpre s c n eimaseovea d t l v e ,sa r l e s d n g o sdi t e nhat cc n r s i i seuucdfwrg o l f e u t dl f a tsnnee n n noe r u s ea e oefb ucb dv r foe l M -oa ua lsd n a t y . ftu )ms o a P , t ue i o t s nu I o t t r n e d S a u c a t r M ne c(m n Moo e i m n . f e h e s i -fbt asp s md l , a r s o u s P tne sr lens uv i t e o o r s oaivfin-e d t t e d n pha d n e eme i esnic v i d t d y ht b o enismr t v i e a t m n tu o l s p v u qoia e rn t pecmbpI vI ) ( i Mutual funds

.tC . ,ai sx dfds u eoo ehe ab S i i t f t C t r i i i m nN s 0puw mo r o d y q 8 in ot e t ecr e i vnu n fpa i nmi d o qi toF i todp P tes ec n cnm P r e e e e i a e o vs dx s t s ei n Sre t i hve d Se i vs o Ldn e dTds . ni r Eu l snsea a h e u t p s fit se t e , i m t r en r i gs a f e o g u e e vs c nuhte r n s es o wi a a beTp . o d g xmtphl n o a an eos i ;a r t h t e hemtri p p t a h t we s a(n i t e c o y ws i vr Ek sangemEc i e S e rEo r t mh e mSb l eLerttns t e fgae hEdt n . o ct hg t oor s s c t d l l no o a dAio d h i nxwl r ns is uagre e fTne paSh leof eSt f l n e a Ls o ma i r uo E f a t ssk t , u u cc h x ca o ho nu mI t Si t lt ) (

ii Equity Linked Savings Scheme (ELSS):

Para 1.5

Exempt, Exempt, Exempt)

thseP sn e. di tme PsI cn tI tei uL neut a isnrwLaU m e e e m r sUc. f e e ut v f . d s ssenmi be r e m t i D nv p s m v s s i e l .eur n i o o nietvehi c c s v n m t d an m s e s i n n or e e i P a f sa S r v i I o e k m p L n s Pe.h c t i h i r t d U i I r t nf o tt ns dr La fa f en or ge o Urn e k s a n ue w s e r -s o y pee a e nbc p . t m f i n t h e i m y t l f n a o Tktn o o i h e t r t e k n n p.a gc r m r r i e e ot e omr u a h i ct f sn t d f mde ei s f e a d f nvaeni and i , nrvod a n o b u e t i C s i i n r s kn l mdn 0 e o yef ar 8 oni f caebdftmur f nnor to arl i eesooef se r t p p e r e vesei tetl o e n ohh dnnl f b t a b e e c f i c r t r o g s opmai eo i m hi n l n f t f se s d cl o e o s ns i e i ec eo t h sep vb ke ci weoo n n g t c d i i om ti o si u c vnnlngn a n y o t uo al i r i eom drt y hu o n v r opr e gs t afr a rton i nv ho pI pih p i ) (

iii ULIP (Unit Linked Insurance Policy)

Investing in Stock Markets AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO PAGE NO. BINDING TYPE

: VANITA TRIPATHI, NEETI PANWAR : TAXMANN : JANUARY 2022 : 6TH EDITION : 9789393656445 : 348 : PAPERBACK

Rs. 450 | USD 37

Description This book is a comprehensive, up-to-date, and illustrated textbook on ‘Investing in Stock Markets’. It is written to provide the reader with the following: u

Comprehensive understanding of the investment environment

Investment decision process

Trading mechanism in stock markets

It also explains the various concepts, tools, and techniques related to investment in financial assets with lively examples and suitable illustrations. The book’s focus is investment in stock markets, primarily equity shares. This book covers the entire syllabus prescribed for students pursuing: u

B.Com. (Hons.) Semester III Paper BCH 3.4(a) Generic Elective under CBCS Programme

B.Com. Semester IV Paper 4.4(b) Skill Enhancement Course under CBCS Programme

Non-Collegiate Women’s Education Board

School of Open Learning of University of Delhi

Various Central Universities throughout India

The Present Publication is the 6th Edition, authored by Prof. (Dr.) Vanita Tripathi & Neeti Panwar, with the following noteworthy features: u

[Simple, Systematic and Comprehensive Explanation] of the concept procedures and techniques of Investment in Stock Market

[Learning Outcomes] Every chapter begins with a list of learning outcomes that the reader will achieve after completing the chapter. It sets the broad framework for the chapter

[Main Text Supplemented by Illustrations & Examples] Various concepts and techniques have been explained in a lucid and well-knit manner.

[Solved Problems] Each chapter provides a sufficient number of solved problems for better understanding and application of the concepts explained in the main text

[Summary Points to Recapitulate the Concepts] which helps the reader to glance over the entire discussion presented in that chapter

[Test Yourself] Every chapter provides a variety of assignments to test the reader’s knowledge. It comprises of the following:

n True/False Statements

n Theory Questions

n Numerical Problems

u [Project work] is provided to apply various concepts and techniques of investments in real life u [Previous Year’s Question Papers] This book includes the following previous year question papers:

n B.Com. (Hon.) 2018 SEM: II General Elective In Commerce

n B.Com. (Prog.) 2018 SEM: IV Skill Enhancement Course

n B.Com. (Hon.) 2019 SEM: II General Elective In Commerce

n B.Com. (Prog.) 2019 SEM: IV Skill Enhancement Course

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