- (i) Sweat equity is the best form of reward for those who contribute to the growth of a company. Discuss.
Sweat Equity, as the name suggests, is the equity issued in lieu of contribution in terms of time given, efforts made and services rendered by the employees of the company. It is used to refer to a form of compensation by businesses to their owners or employees. The term is sometimes used in partnership agreements where one or more of the partners contribute no financial capital. In the case of a business start-up, employees might, upon incorporation, receive stock or stock options in return for working for below-market salaries (or in some cases no salary at all)
The equity that is created in a company or some other asset as a direct result of hard work by the owner(s)
The Companies Act provides for issue of sweat equity shares to employees and/or directors of companies on favourable terms in recognition of their work. Sweat equity makes employees part owners of the company and gives them a share of profit earned.
Thus, it is the most suitable form of reward for those who contribute to the growth of the company.
However, in India, as per SEBI and DCA regulations, sweat equity shares can be issued only to employees or directors.
(ii) Why do investor add real estate in their portfolio?
The main aim of an investor, while deciding on a portfolio is to maximize return and minimize risk of holding an asset. The total return comprises of the periodic receipts plus change in price of the asset or capital appreciation. The risk in investment is the chance that the realized return may be less than the expected return.
In case of investment in real estate, the investor receives periodic receipts in the form of rentals and the property generally appreciates over period of time. Another reason to choose real estate in portfolio is its ability to serve as an inflation hedge, since the owner can increase rentals during inflation. Real estate also has the unique ability to reduce risk in the way properties are leased. Portfolios that have followed a cash flow strategy and decided to lock in rates in long-term leases have less risk exposure to market movements, but they also have less inflation-hedging ability.
(iii) What are the steps taken by SEBI in the primary market to protect investors?
SEBI has taken various steps and issued guidelines to protect the interest of the investors in the primary market.
With the objective of boosting investor confidence in the primary market, SEBI brought the concept of ‘Anchor Investors’. This allows an individual or entity to subscribe up to 30% of the institutional share of an IPO, similar to a pre-placement agreement. Since 50% of an IPO is typically reserved for institutional investors, this would mean up to 15% of the total offering could be given to an ‘anchor investor.’ This would thereby impute confidence to the retail investors as they see a large investor taking a significant stake in the IPO.
SEBI has recently introduced a new process applicable to retail individual investors popularly referred to as ASBA (Application Supported by Blocked amount) process. Under this process, the bid amount is blocked in the investor account at the time of bidding. If and when an allotment is made, his account will be debited and the money will be remitted to the company. Therefore, the bid amount remains in his account earning interest during the whole process period. Investor’s account will be debited only to the extent of shares allotted, if any, and the remaining amount will be unblocked. There will be no refund as such and therefore the investor will not encounter the problems related to non-receipt of refund.
SEBI has increased the IPO card validity from 3 months to 1 year, so that IPO Company can bring the IPO in the market at a right time (say in a bull trend), this will provide better opportunity for the investors.
No listed company will be allowed to issue shares with superior voting rights. There could also be no preferential issues with superior voting rights.
- (i) Discuss the dematerialisation and rematerialisation processes in NSDL?
Dematerialization is the process of converting physical security holdings with the depository into electronicform in which the share certificates are shredded (i.e. its paper form is destroyed) and a corresponding entry of the number of shares (held in the certificates) is made in the account opened with the DP (depository participant). The securities held in the demat form do not bear any distinguishing features like distinctive number, folio number and so on. Once the scrip is dematerialized, it loses its identity in terms of share certificate distinctive numbers and folio numbers.
Rematerialisation is a process by which a client can get his electronic holdings converted back into physical holdings, that is, he can get back the physical form of share certificates. To get the certificates back, he has to fill up a Remat. Request Form and submit it to its DP, with whom he has an account. The new certificates may not necessarily bear the same folio or distinctive numbers as were previously existing. Rematerialisation is offered for all those scrips which are eligible for demat in the depositories list of securities available for dematerialization.
(ii) ‘Stock market indices are the barometers of the stock market’ – Discuss?
Stock market indices are the barometers of the stock market.
These help to recognize broad trend in the market. The investor can use the indices to allocate the funds rationally among the stocks. Technical analysts use the indices to predict the future of market.
The Dow Jones Industrial Average (DJIA), one of the most popular stock market indices experienced a downfall in the early stages of 2004 which was largely attributed to an increase in the Money Supply by the Federal Reserve in the USA. The Technical Indicator Index (TII) studies incorporating the Short Term Index and Intermediate Term Index from the period January to May 2004 for the American equity markets showed largely negative or bearish trends for both the indices as they closed at 3.50 and 48.48 respectively. Whereas the short-term index is a useful predictor of equity markets over the short run, the intermediate term index serves as a warning system for trend changes of considerable magnitude.
(iii) How can increasing short interest give a bullish interpretation why?
A bull market is associated with increasing investor confidence, and increased investing in anticipation of future price increases.
Short interest is the total number of shares of a particular stock that have been sold short by investors but have not yet been covered or closed out. This can be expressed as a number or as a percentage. When expressed as a percentage short interest is the number of shorted shares divided by the number of shares outstanding. For example, a stock with 1.5 million shares sold short and 10 million shares outstanding has a short interest of 15% (1.5 million/10 million = 15%).
Most stock exchanges track the short interest in each stock and issue reports at month´s end. These reports are great because, by showing what short sellers are doing; they allow investors to gauge overall market sentiment surrounding a particular stock. Or alternatively most exchanges provide an online tool to calculate short interest for a particular security. For example check out the NASDAQ’s short interest calculator; it´s very easy to use. A large increase or decrease in a stock´s short interest from the previous month can be a very telling indicator of investor sentiment. Let´s say that Microsoft´s (MSFT) short interest increased by 10% in one month. This means that there was a 10% increase in the amount of people who believe the stock will decrease. Such a significant shift provides good cause for us to find out more. We would need to check the current research and any recent news reports to see what is happening with the company and why more investors are selling its stock.
A high short-interest stock should be approached for buying with extreme caution but not necessarily avoided at all cost. In fact, many investors use short interest as a tool to determine the direction of the market. The rationale is that if everyone is selling, then the stock is already at its low and can only move up. Thus they feel that a high short-interest ratio is bullish - because eventually there will be significant upward pressure on the stock´s price as short sellers cover their short positions (i.e. buy back the stocks they borrowed to return to the lender).
- (i) Explain the utility of the economic analysis and state the economic factors considered for this analysis.
Resources are scarce, while human wants and needs tend to be unlimited. Economic analysis is the study of supply and demand, and the choices (decisions) and incentives (pricing, taxes, etc.), so that scarce resources are used efficiently.
The process of economic analysis involves identifying appropriate economic indicators, collecting economic data, preparing or selecting an economic forecast, interpreting the economic data, monitoring intervening forces and using the economic analysis for decision making.
Decision makers use the results of an economic analysis for decision making. Astute decision makers recognize that economic forces are uncontrollable and that current strategies may need to be adjusted to cope with or overcome the economic changes. They approach with caution opportunities and threats discovered as a result of economic scanning and analysis. They pursue a proactive approach, however, knowing that an economic analysis enables them to choose from alternative approaches , how to employ scarce or uncommon resources and achieve objectives in the most efficient and cost effective manner.
The economic factors considered for this analysis are unemployment rates, personal income and expenditures, interest rates, business inventories, gross product by industry, and numerous other economic indicators or indices. Such measures of economic performance may be found in secondary sources such as business, trade, government, and general-interest publications.
(ii) What is meant by fundamental analysis? How does fundamental analysis differ from technical analysis?
Fundamental analysis is the examination of the underlying forces that affect the wellbeing of the economy, industry groups, and companies. The term simply refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements. As with most analysis, the goal is to derive a forecast and profit from future price movements. It is performed on historical and present data, but with the goal of making financial forecasts.
At the company level, fundamental analysis may involve examination of financial data, management, business concept and competition. Also known as quantitative analysis, this involves looking at revenue, expenses, assets, liabilities and all the other financial aspects of a company. Fundamental analysts look at this information to gain insight on a company´s future performance at the industry level, there might be an examination of supply and demand forces for the products offered. For the national economy, fundamental analysis might focus on economic data to assess the present and future growth of the economy. To forecast future stock prices, fundamental analysis combines economic, industry, and company analysis to derive a stock´s current fair value and forecast future value. When talking about stocks, fundamental analysis is a technique that attempts to determine a security’s value by focusing on underlying factors that affect a company´s ACTUAL business and its future prospects.
Technical analysis, on the other hand, looks at the price movement of a security and uses this data to predict its future price movements. Fundamental analysis is different from technical analysis as a technical analyst approaches a security from the charts, while a fundamental analyst starts with the financial statements.
(iii) What “industry life cycle exhibits the status of the industry and gives the clue to entry and exit for investors” Elucidate.
There are typically five stages in the industry lifecycle. They are defined as:
- Early Stages Phase - alternative product design and positioning, establishing the range and boundaries of the industry itself.
- Innovation Phase - Product innovation declines, process innovation begins and a "dominant design" will arrive.
iii. Cost or Shakeout Phase - Companies settle on the "dominant design"; economies of scale are achieved, forcing smaller players to be acquired or exit altogether. Barriers to entry become very high, as large-scale consolidation occurs.
- Maturity - Growth is no longer the main focus, market share and cash flow become the primary goals of the companies left in the space.
- Decline - Revenues declining; the industry as a whole may be supplanted by a new one.
Each stage shows the status of the industry and gives a clue for entry or exit for investors.
Under the production and market introduction phases, revenues and earnings are likely to be very low, which makes investments during these phases more speculative in nature. Revenues and earnings are likely to be low because there is little demand for the product, or the product is not completed. Expenses are likely to be very large during these phases as a company or industry spends a lot on marketing and research. Through the growth phase, revenues and margins are likely to be on the rise due to an increase in demand for a product and the pricing power the firm has due to a small number of competitors. Stock prices are likely to rise during this phase.
During the maturity and stability phase, revenues and margins are likely to decline due to lower sales demand and more competition. Stock prices are likely to decline during these phases.
- Stocks L and M have yielded the following returns for the past two years.
(i) What is the expected return on portfolio made up of 60 percent of L and 40 percent of M? Find out the standard deviation of each stock.
Expected return on portfolio is –
Years Return %
(R1) Mean Dev.from Squared (R2) Mean Dev from Squared
Mean Dev Mean Dev
1995 12 15 -3 9 14 13 1 1
1997 18 15 3 9 12 13 -1 1
Variance of stock L = 18/2-1 = 18
Standard deviation of Stock L = √18 = 4.24
Variance of stock M = 2/2-1 = 2
Standard deviation of Stock M = √2 = 1.414
(ii) What is the covariance and co-efficient of correlation between stock L and M?
Covariance between stock L and M is –
(iii) What is the portfolio risk of a portfolio made up of 60 percent of land 40 percent?
Portfolio risk of a portfolio with 60 percent land 40 percent-
- Write short notes on any three of the following.
a) Technical Analysis v/s fundamental analysis
Technical analysis and fundamental analysis are the two main schools of thought in the financial markets. As we´ve mentioned, technical analysis looks at the price movement of a security and uses this data to predict its future price movements. Fundamental analysis, on the other hand, looks at economic factors, known as fundamentals. Let´s get into the details of how these two approaches differ, the criticisms against technical analysis and how technical and fundamental analysis can be used together to analyse securities.
At the most basic level, a technical analyst approaches a security from the charts, while a fundamental analyst starts with the financial statements. (For further reading, see Introduction to Fundamental Analysis and Advanced Financial Statement Analysis.)
By looking at the balance sheet, cash flow statement and income statement, a fundamental analyst tries to determine a company´s value. In financial terms, an analyst attempts to measure a company´s intrinsic value. In this approach, investment decisions are fairly easy to make - if the price of a stock trades below its intrinsic value, it´s a good investment. Although this is an oversimplification (fundamental analysis goes beyond just the financial statements) for the purposes of this tutorial, this simple tenet holds true.
Technical traders, on the other hand, believe there is no reason to analyze a company´s fundamentals because these are all accounted for in the stock´s price. Technicians believe that all the information they need about a stock can be found in its charts.
Fundamental analysis takes a relatively long-term approach to analysing the market compared to technical analysis. While technical analysis can be used on a timeframe of weeks, days or even minutes, fundamental analysis often looks at data over a number of years.
The different timeframes that these two approaches use is a result of the nature of the investing style to which they each adhere. It can take a long time for a company´s value to be reflected in the market, so when a fundamental analyst estimates intrinsic value, a gain is not realized until the stock´s market price rises to its "correct" value. This type of investing is called value investing and assumes that the short-term market is wrong, but that the price of a particular stock will correct itself over the long run. This "long run" can represent a timeframe of as long as several years, in some cases.
d) Immunisation of bond portfolio & its technique.
Bond immunization is an investment strategy used to minimize the interest rate risk of bond investments by adjusting the portfolio duration to match the investor´s investment time horizon. It does this by locking in a fixed rate of return during the amount of time an investor plans to keep the investment without cashing it in.
Immunization locks in a fixed rate of return during the amount of time an investor plans to keep the bond without cashing it in.
Normally, interest rates affect bond prices inversely. When interest rates go up, bond prices go down. But when a bond portfolio is immunized, the investor receives a specific rate of return over a given time period regardless of what happens to interest rates during that time. In other words, the bond is "immune" to fluctuating interest rates.
To immunize a bond portfolio, you need to know the duration of the bonds in the portfolio and adjust the portfolio so that the portfolio´s duration equals the investment time horizon. For example, suppose you need to have $50,000 in five years for your child´s education. You might decide to invest in bonds. You can immunize your bond portfolio by selecting bonds that will equal exactly $50,000 in five years regardless of interest rate changes. You can buy one zero-coupon bond that will mature in five years to equal $50,000, or several coupon bonds each with a five year duration, or several bonds that "average" a five-year duration.
Duration measures a bond´s market risk and price volatility in response to a given change in interest rates. Duration is a weighted average of the bond´s cash flows over its life. The weights are the present value of each interest payment as a percentage of the bond´s full price. The longer the duration of a bond, the greater its price volatility. Duration is used to determine how a bond will react to changing interest rates. For example, if interest rates rise 1%, a bond with a two-year duration will fall about 2% in value.
You needn´t worry about doing the calculations as you can obtain a bond´s (or bond fund´s) duration from a broker or advisor. Using bonds´ durations, you can build a bond portfolio immune to interest rate risk.
For example, large banks must protect their current net worth, whereas pension funds have the obligation of payments after a number of years. These institutions are both concerned about protecting the future value of their portfolios and therefore have the problem of dealing with uncertain future interest rates. By using an immunization technique, large institutions can protect (immunize) their firm from exposure to interest rate fluctuations. A perfect immunization strategy establishes a virtually zero-risk profile in which interest rate movements have no impact on the value of a firm.
e) Capital and money market securities.
Money market is a component of financial market where short-term borrowing can be issued. This market includes assets that deal with short-term borrowing, lending, buying and selling. A capital market is a component of a financial market that allows long-term trading of debt and equity-backed securities. Long-term borrowing or lending is done by investors or corporations that have large amounts of wealth at their disposal.
Money market when it comes to business, each business at a certain point has to borrow money in order to keep running business. There are multiple ways that a company can borrow money, including issuing bonds, shares or taking up a loan. There are two different components of the financial market; known as Money Market and Capital Market. These terms are more commonly come across in business and economics.
Money market is a component of financial market where short-term borrowing can be issued. This market includes assets that deal with short-term borrowing, lending, buying and selling. The short-term ensures that the borrowing and lending period has a lease of less than one year. The lease can also be as short as a one hour, depending on the borrower and the lender. According to The Global Money Markets, Trading is usually done over the counter using instruments such as Treasury bills, commercial paper, bankers´ acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements, federal funds, and short-lived mortgage-, and asset-backed securities. The money market was created as some businesses has a surplus of cash, while the other businesses were looking for loans.
In the United States, all federal, state and local governments issue papers that are traded in form of money. These include municipal paper and Treasury bills. The main functions of Money market include: Transfer from parties with surplus funds to parties with a deficit, transfer of large sums of money, help to implement monetary policies, determine short-term interest rates and allow government to raise funds. The interest rates in a Money market are also high as the borrowing time is low. Trading in the money markets are usually done by banks or companies with high credit ratings.
Capital market a capital market is a component of a financial market that allows long-term trading of debt and equity-backed securities. Long-term borrowing or lending is done by investors or corporations that have large amounts of wealth at their disposal. The most popular capital market is the NYSE or the New York Stock Exchange. Huge financial regulators are responsible for overseeing the capital market to ensure that companies do not defraud their investors. Trading can be done by a number of credit instruments such as stocks, shares, equity, debentured, bonds, and securities. Much of the trading is actually done online using a computer. There is no actual cash involved in trading.
Investments made in a capital market usually last longer than a year and can even last up to 25-30 years. Some investments may depend on the life of the company, with the investment ending if the company shuts down. A benefit of this investment is that if need arises, the investor can swiftly cash their investment. Capital market can be divided into two divisions: stock markets and bond markets. In stock markets investors acquire the ownership of the company they are investing in, while in bond markets investors are considered as creditors. Investment done in capital markets are usually for acquiring physical capital goods that would help increase its income. However, generating an income may take anywhere from a couple of months to many years or could even fall through.
- Mr. Rajan Tiwari is planning to invest in the equity stocks of Xerox India Limited. The current share price is Rs.150 per share. Xerox has declared a dividend of Rs.10 per share for the current year. Mr. Tiwari is of the opinion that the dividend per share will remain at the same level for the next two years, after which it will grow at the rate of 25% per annum in the third and fourth years. From the fifth year onwards, dividends are expected to grow at a normal rate of 12% per annum. If the required rate of return of Mr. Tiwari is 14% per annum, do you suggest him to purchase the share at the current price.
Intrinsic value of the stock is Rs.551.98 and it is recommended to
Intrinsic value of the stock is Rs.551.98 and it is not recommended
Intrinsic value of the stock is Rs.517.83 and it is recommended to
Intrinsic value of the stock is Rs.517.83 and it is not recommended
Intrinsic value of the stock is Rs.150 and it is recommended to
Present value of future cash flows for first four years including current year is –
10 + 10/ (1.14) + 10/ + (10+ (0.25*10))/ ( +
= 10 + 8.77 + 7.69 + 8.44 + 15.625/1.68
= 10 + 8.77 + 7.69 + 8.44 + 9.25 = 44.15
5th Year = 405.7
Total = 449.91
Above amount is greater than initial outlay of 150, hence recommended to buy the stock.
- Vishnu ltd, has just paid a dividend of Rs.16 per share. As a part of its major reorganization of its operations, it has stated that it does not intend to pay any dividend for the next two years. In three years’ time it will commence paying dividend at Rs.12 per share and the directors have indicated that they expect to achieve dividend growth at 14% p.a. thereafter. If the reorganization does not take place, dividend will be paid in the next two years and the expected dividend growth will remain at the present level of 8% p.a. The firm’s cost of equity is 18% (i.e. the return expected by the equity investors) and will be unaffected by the reorganization. What will be the value of firm’s shares in both the situations? Moreover, advice the directors to which process they should adopt for? Purchase the share to purchase the share. Purchase the share. To purchase the share purchase the share.
In case of reorganization –
PV of future cash flows is – 16 + 16/1.18 +
= 16 + 13.56 + 11.49 + 97.38
In case of no reorganization –
PV of future cash flows is - 16 + 182.59
Hence, reorganization is better.
- Sundaram finance Ltd. has an investment opportunity available which will involve a capital outlay in each of the next 2 years and which will produce benefits during the following 3 years. A summary of the financial implications of this investment is given below.
Cash Flow (Rs.’000)
Sundaram Ltd., currently has 1,00,000 shares in issue. The dividend just paid was Rs.25 per share. In the absence of the above investment, dividends are expected at this level for the next 3 years, but will then demonstrate perpetual growth of 15 percent p.a. Sundaram finance Ltd. is currently all equity financed and the required rate of return of the equity investor is estimated to be 18 percent. The only possible way of financing the investment is, therefore, to reduce the dividend payments made in the next 2 years. Cash received from the new investment is therefore, to reduce the dividend payments made in the 10% will also be maintained because of other operations.
What will be the present market price? What will be the market price after the acceptance of the investment (assuming the market knows the dividend changes that will result from the investment using a dividend valuation model?)
Case A Total 25+21.19+17.95+15.22+429.82 = 509.18
Case B Something wrong in line highlighted in red i.e. “Cash received from the new investment is therefore, to reduce the dividend payments made in the 10% will also be maintained because of other operations.”
However if the question intent is (assumption is at my end) that growth is 10% all through year 5 plus all extra cash as dividend + year six is 15% growth resumes
Total = 25+23.3+21.73 + (20.25+1.22) + (18.88+11.86) + (17.60+17.92) + 546.87 = 704.63
Hence investment in case B is much better.
Mr. Prashant Gupta is interested in investing in equity shares of Infosys and Hamdard. Infosys Technologies Ltd. (NASDAQ: INFY) which was started in 1981 by seven people with US$ 250. Today, it is a global leader in the "next generation" of IT and consulting with revenues of over US$ 4 billion. It offers span business and technology consulting, application services, systems integration, product engineering, custom software development, maintenance, re-engineering, independent testing and validation services, IT infrastructure services and business process outsourcing. Hamdard (Wakf) Laboratories, India is a famous pharmaceutical company in India known for its Unani and Ayurvedic products. It is the world´s largest manufacturer of Unani medicinesSome of its more famous products include Safi, Sharbat Rooh Afza, Cinkara, Roghan Badam Shirin and Pachnol. It is associated with Hamdard Foundation, India.
Being conservative in nature, he wants to determine the risk associated with investments. In specific terms, he wants to seek data related to both levered and unlevered beta of these companies. He approaches Nitin Shah, a financial consultant to do the needful. Nitin has collected the relevant information detailed below:
S&P CNX NIFTY**
(i) Monthly returns on equity shares of Infosys and Hamdard for a period of 2 years (w.e.f. October 2006 to September 2008) along with portfolio of S&P CNX NIFTY.
(ii) Return on 364-days treasury bills issued by Government of India for the period 2007-08 is 5.15 per cent per annum and 0.419 per month. This rate is to be used as a proxy for risk-free rate of return.
(iii) Debt-equity ratio (based on the average of 2004 to 2008) is 1.6 per cent for Wipro and 31.4 per cent for Dabur.
(iv) Corporate tax is 35 per cent.
- Compute the Beta and interpret it for Prashant. Examine different circumstances with analysis of data.
Here market return (proxy Nifty) is not given. Let’s assume 15% correction
Average Beta Infosys = 0.0265
Expected return from Infosys = 5.15+15*.0265=5.55%
Average Beta Hamdard = 0.044
Expected return from Hamdard = 5.15+15*0.044=5.81%
So returns from Hamdard are marginally higher. However D/E ratio is also higher.
Since investor is conservative, Infosys is a world class company and provide IT solution so as per current scenario Infosys is recommended.
Since corporate tax is there on both cases (assumption); it has no bearing on investment decision.
1 .India´s largest stock exchange is
Question No. 2
Stock exchanges have roles in the economy
Question No. 3
There is usually…….compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange.
- none of the above
Question No. 4
Buyers and sellers come together to trade ……...specific hours on business days.
Question No. 5
If a particular company is traded on an exchange, it is referred to as ……....
- non listed
- non traded
Question No. 6
When people draw their savings and invest in shares, it leads to a more …………. allocation of resources
Question No. 7
Exchanges ……... rules and regulations on the firms and brokers that are involved with them.
Question No. 8
Investing in shares is open to ……... the large and small stock investors
Question No. 9
Companies that are not listed on a stock exchange are sold ……..
Question No. 10
An exchange is an institution, organization, or association which hosts a market where stocks, bonds, options and futures, and commodities are traded.
- can’t say
- inadequate information
Question No. 11
Listing requirements are the set of conditions imposed by a given ……... upon companies that want to be listed on that exchange
- stock exchange
Question No. 12
Stock exchanges originated as ……. organizations, owned by its member stock brokers.
Question No. 13
Some exchanges are physical locations where transactions are carried out on a ……….. floor, by a method known as open outcry
Question No. 14
Actual trades are based on an auction market model where a potential buyer bids a specific price for a ……...and a potential seller asks a specific price for the stock.
Question No. 15
The stocks are listed and ,……….on stock exchanges
- not traded
Question No. 16
When a company is delisted, it is a serious sign of financial or managerial trouble and generally causes the stock price to …………...
- stay stable
- none of the above
Question No. 17
The exchanges provide real-time trading information on the listed securities, facilitating price discovery.
Question No. 18
Companies that have shares traded OTC are usually …………... and riskier
Question No. 19
The ……... monitors the transactions to avoid illegal activity and / or stock price manipulation.
Question No. 20
The NASDAQ is a …... listed exchange, where all of the trading is done over a computer network
Question No. 21
The ……….. that an exchange provides affords investors the ability to quickly and easily sell securities.