financial markets

                                                                           FINANCIAL MARKETS

Mr. A have amount of money in excess with him and he want to earn some interest on his money by lending to someone who needs. Mr. B need some amount to establish a company or to improve his business.

                    Financial markets allow the interaction of lenders (Mr. A) and borrowers (Mr. B).

Let us suppose B needs Rs.1000, if he writes on a paper saying “anyone who gives me Rs1000, I’ll give him Rs1200 after 2 months”. This is public issue. If Mr. A gives Rs1000 to Mr. B and gets that paper, it is security. The market dealing with the securities issuing for the first time are known as primary markets.

If B says give me 1000/- I will give you limited ownership and I will pay you share from my profit, this is called share.

If B says I will pay you RS 50 every year no matter if I get profit or loss, it is called debenture.

Now if A needs money before 2 months, so he writes a paper saying “ anyone who gives me  Rs1100 I will give him Rs1200 worth of B’s security, now this new security is called as Derivative. The market dealing with these derivatives are known as secondary markets (share market/BSE/NSE).

Secondary markets also known for stock markets where the stocks, shares etc., are brought and sold at stock exchanges. So for India has recognized 24 stock exchanges. Bombay Stock Exchange(BSE) is the premier stock exchange in India.
 Let us suppose Mr. C has Rs1000000, he has two options:

1.       Can invest in a certificate giving him 11% interest per year.

2.       Can invest in the market giving him 16% interest per year.

Obviously he goes for second choice. But to make C to invest in certificate the borrower should give him discount. (let us calculate the discount… the monetary amount which C gets in investing in a certificate is 110000, for this amount to get a return of 16% C has to invest 110000/16%= 687500. So if a discount 1000000-687500=312500/- given on the certificate, C can invest in certificate. In this case C invests 0nly 687500/- but gets 11% interest per year on the nominal amount of the certificate (1000000).

 Now let us discuss about MUTUAL FUNDS:
For example I had bought the shares worth Rs5 crore from SPACETECH company on the stock exchange, now my father got angry for my bad idea in investing space related company. So now I had sold shares of worth Rs2.5crores and bought an IT company shares. now also my father was not happy. So I started seeing the list of companies... here comes MUTUAL FUNDS.
                                       
                                     They take money from thousands of investors like me and invest in stocks on our behalf.As they hold many companies, if one company get's loss doesn't lead to loss of all money of mutual funds. They charge us fee to manage these funds known as Expense Ratio.


In the next post we shall see the regulating authority of these markets

latitudes

                                        LATITUDES

               Latitude is an angular distance measured in degrees along the equator east or west of the prime meridian. These are angular elevations at the center from south to north. Equator represents the zero degree latitude.

The distance between each latitude is same throughout the globe.(i.e.,distance from 0 degrees to 1 degree is same as the distance from 1 degree to 2 degrees)

Important latitudes are: 

23^1/2 degrees north(tropic of cancer)

23^1/2 degrees south(tropic of capricon)

63^1/2 degrees north(arctic circle)

63^1/2 degrrees south(antarctic circle)

Directions: For questions, 1‐10 circle the answer that letter that best answers the question. Each question is worth 1 point each.

1.To locate exact places on the earth, one must look at

a. the intersecting lines of latitude and longitude

b. the lines of latitude only

c. the lines of longitude only

d. a neighboring area to describe the location

2.Lines of latitude and longitude are measured in

a.only north and south

b.degrees of a circle

c.only east and west

d.degrees of a compass

3.Latitude lines on a globe run from

a.north to south

b.east to west

c.north to east

d.south to west

4.______ lines on a globe run from east to west.

a.North pole

b.South pole

c.Latitude

d.Longitude

5.When measuring the lines of latitude, always begin with the ______, which represents 0 degrees.

a.Prime Meridian

b.Equator

c.Longitude

d.North Pole

6.When measuring the lines of longitude, always begin with the _______, which represents 0 degrees.

a.South Pole

b.Equator

c. Prime Meridian

d. Latitude

7. On a globe, the Equator is the

a. Horizontal, center line

b. Vertical, center line

c. 30 degree line

d. 180 degree line

8. On a globe, the Prime Meridian is the

a. Horizontal, center line

b. Vertical, center line

c. 180 degree line

d. 15 degree line

geography

                                                            LONGITUDES

Longitude is an angular distance of a point on the earth's surface measured in degrees from the center of the earth.The starting point of longitude is 0 (observe in the below figure).

ANALYSIS FOR UNDERSTANDING:

 we have drawn all the lines which exactly passes through north and south poles with unit angular distance. Then we kept the longitude which is passing through ROYAL laboratory ENGLAND as base starting from 0 degrees.

Total longitudes are 360 and earth is taking 24 hrs to  pass through all of these longitudes, this implies that in one hour earth will passes trough 15 degrees(or longitudes). In half-an-hour it will passes through 7.5 degrees. So each country has taken the longitude which is multiple of 7.5 to follow the time in the entire country.