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• Preface xiii Background xiii Book Structure xiv Bonds xiv Stocks, Investments xv Forwards, Futures xv Risk-Neutral Option Pricing xv Interest Rate Derivatives xvi Problems and Python Projects xvi Acknowledgments xix Acronyms xxiii
• 1 Finance 1 1.1 Follow the Money 1 1.2 Financial Markets and Participants 2 1.3 Quantitative Finance 4
• 2 Rates, Yields, Bond Math 7 2.1 Interest Rates 7 2.1.1 Fractional Periods 8 2.1.2 Continuous Compounding 9 2.1.3 Discount Factor, PV, FV 9 2.1.4 Yield, Internal Rate of Return 10 2.2 Arbitrage, Law of One Price 11 2.3 Price-Yield Formula 12 2.3.1 Clean Price 15 2.3.2 Zero Coupon Bond 16 2.3.3 Annuity 17 2.3.4 Fractional Years, Day Counts 17 2.3.5 US Treasury Securities 19 2.4 Solving for Yield: Root Search 20 2.4.1 Newton-Raphson Method 21 2.4.2 Bisection Method 22 2.5 Price Risk 22 2.5.1 PV01, PVBP 22 2.5.2 Convexity 23 2.5.3 Taylor Series Expansion 24 2.5.4 Expansion Around C 26 2.5.5 Numerical Derivatives 27 2.6 Level Pay Loan 27 2.6.1 Interest and Principal Payments 29 2.6.2 Average Life 30 2.6.3 Pool of Loans 30 2.6.4 Prepayments 31 2.6.5 Negative Convexity 33 2.7 Yield Curve 35 2.7.1 Bootstrap Method 36 2.7.2 Interpolation Method 36 2.7.3 Rich/Cheap Analysis 38 2.7.4 Yield Curve Trades 38 Problems 39 Python Projects 46
• 3 Investment Theory 53 3.1 Utility Theory 54 3.1.1 Risk Appetite 54 3.1.2 Risk versus Uncertainty, Ranking 56 3.1.3 Utility Theory Axioms 58 3.1.4 Certainty-Equivalent 58 3.1.5 X-ARRA 60 3.2 Portfolio Selection 62 3.2.1 Asset Allocation 62 3.2.2 Markowitz Mean-Variance Theory 63 3.2.3 Risky Assets 64 3.2.4 Portfolio Risk 64 3.2.5 Minimum Variance Portfolio 65 3.2.6 Leverage, Short Sales 67 3.2.7 Multiple Risky Assets 69 3.2.8 Efficient Frontier 73 3.2.9 Minimum Variance Frontier 73 3.2.10 Separation: Two Fund Theorem 75 3.2.11 Risk-Free Asset 76 3.2.12 Capital Market Line 76 3.2.13 Market Portfolio 77 3.3 Capital Asset Pricing Model 78 3.3.1 CAPM Pricing 81 3.3.2 Systematic and Diversifiable Risk 81 3.4 Factors 82 3.4.1 Arbitrage Pricing Theory 82 3.4.2 Fama-French Factors 84 3.4.3 Factor Investing 85 3.4.4 PCA 85 3.5 Mean-Variance Efficiency and Utility 87 3.5.1 Parabolic Utility 89 3.5.2 Jointly Normal Returns 89 3.6 Investments in Practice 90 3.6.1 Re-balancing 91 3.6.2 Performance Measures 91 3.6.3 Z-Scores, Mean-Reversion, Rich-Cheap 92 3.6.4 Pairs Trading 92 3.6.5 Risk Management 94 Bibliography 96 Problems 98 Python Projects 103
• 4 Forwards and Futures 109 4.1 Forwards 109 4.1.1 Forward Price 110 4.1.2 Cash and Carry 111 4.1.3 Interim Cash flows 111 4.1.4 Valuation of Forwards 111 4.1.5 Forward Curve 112 4.2 Futures Contracts 113 4.2.1 Futures versus Forwards 115 4.2.2 Zero-Cost, Leverage 116 4.2.3 Mark-To-Market Loss 117 4.3 Stock Dividends 117 4.4 Forward Foreign Currency Exchange Rate 118 4.5 Forward Interest Rates 119 Bibliography 120 Problems 120
• 5 Risk Neutral Valuation 125 5.1 Contingent Claims 125 5.2 Binomial Model 127 5.2.1 Probability-Free Pricing 130 5.2.2 No Arbitrage 130 5.2.3 Risk-Neutrality 130 5.3 From One time-step to Two 132 5.3.1 Self-Financing, Dynamic Hedging 133 5.3.2 Iterated Expectation 136 5.4 Relative Prices 137 5.4.1 Risk-Neutral Valuation 138 5.4.2 Fundamental Theorems of Asset Pricing 140 Bibliography 141 Problems 141
• 6 Option Pricing 145 6.1 Random Walk and Brownian Motion 145 6.1.1 Random Walk 145 6.1.2 Brownian Motion 146 6.1.3 Log-normal Distribution, Geometric Brownian Motion 147 6.2 Black-Scholes-Merton Call Formula 149 6.2.1 Put-Call Parity 153 6.2.2 Black's Formula: Options on Forwards 154 6.2.3 Call Is All You Need 154 6.3 Implied Volatility 156 6.3.1 Skews, Smiles 156 6.4 Greeks 157 6.4.1 Greeks Formulae 158 6.4.2 Gamma versus Theta 158 6.4.3 Delta, Gamma versus Time 161 6.5 Diffusions, Ito 162 6.5.1 Black-Scholes-Merton PDE 163 6.5.2 Call Formula and Heat Equation 165 6.6 CRR Binomial Model 166 6.6.1 CRR Greeks 168 6.7 American Style Options 169 6.7.1 American Call Options 169 6.7.2 Backward Induction 170 6.8 Path-Dependent Options 171 6.9 European Options in Practice 174 Bibliography 175 Problems 175 Python Projects 181
• 7 Interest Rate Derivatives 189 7.1 Term Structure of Interest Rates 189 7.1.1 Zero Curve 189 7.1.2 Forward Rate Curve 190 7.2 Interest Rate Swaps 190 7.2.1 Swap Valuation 193 7.2.2 Swap=Bond-100% 195 7.2.3 Discounting the Forwards 195 7.2.4 Swap Rate as Average Forward Rate 195 7.3 Interest Rate Derivatives 196 7.3.1 Black's Normal Model 196 7.3.2 Caps and Floors 198 7.3.3 European Swaptions 199 7.3.4 Constant Maturity Swaps 201 7.4 Interest Rate Models 202 7.4.1 Money Market Account, Short Rate 202 7.4.2 Short Rate Models 203 7.4.3 Mean-Reversion, Vasicek and Hull-White Models 204 7.4.4 Short Rate Lattice Model 205 7.4.5 Pure Securities 208 7.5 Bermudan Swaptions 211 7.6 Term Structure Models 212 7.7 Interest Rate Derivatives in Practice 213 7.7.1 Interest Rate Risk 213 7.7.2 Value at Risk (VaR) 214 Bibliography 214 Problems 215 A Math and Probability Review 219 A.1 Calculus and Differentiation Rules 219 A.1.1 Taylor Series 220 A.2 Probability Review 220 A.2.1 Density and Distribution Functions 221 A.2.2 Expected Values, Moments 222 A.2.3 Conditional Probability and Expectation 223 A.2.4 Jensen's Inequality 225 A.2.5 Normal Distribution 225 A.2.6 Central Limit Theorem 226 A.3 Linear Regression Analysis 226 A.3.1 Regression Distributions 227 B Useful Excel Functions 231 Index 232.
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Explore the foundations of modern finance with this intuitive mathematical guide In Mathematical Techniques in Finance: An Introduction, distinguished finance professional Amir Sadr delivers an essential and practical guide to the mathematical foundations of various areas of finance, including corporate finance, investments, risk management, and more. Readers will discover a wealth of accessible information that reveals the underpinnings of business and finance. You'll learn about: Investment theory, including utility theory, mean-variance theory and asset allocation, and the Capital Asset Pricing Model Derivatives, including forwards, options, the random walk, and Brownian Motion Interest rate curves, including yield curves, interest rate swap curves, and interest rate derivatives Complete with math reviews, useful Excel functions, and a glossary of financial terms, Mathematical Techniques in Finance: An Introduction is required reading for students and professionals in finance.
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• Intro
• Chapter 0: Introduction
• Chapter 1: Key Excel Functions
• Chapter 1.1: SUM
• CHAPTER 1.2: IF
• CHAPTER 1.3: IFERROR
• CHAPTER 1.4: SUMIF
• CHAPTER 1.5: SUMIFS
• CHAPTER 1.6: SUMPRODUCT
• CHAPTER 1.7: VLOOKUP / HLOOKUP
• CHAPTER 1.8: LOOKUP
• CHAPTER 1.9: INDEX and MATCH
• CHAPTER 1.10: CHOOSE
• CHAPTER 1.11: OFFSET
• CHAPTER 1.13: EOMONTH and EDATE
• CHAPTER 1.14: MAX and MIN
• Chapter 2: Key Excel Functionalities
• CHAPTER 2.1: Absolute Referencing
• CHAPTER 2.2: Number formatting
• CHAPTER 2.3: Styles
• CHAPTER 2.4: Conditional Formatting

• CHAPTER 2.5: Range Names
• CHAPTER 2.6: Data Validation
• CHAPTER 2.7: Data Tables
• CHAPTER 2.8: Goal Seek and Solver
• CHAPTER 2.9: Hyperlinks
• Chapter 3: Best Practice Methodology
• Chapter 4: Layout Tips
• Chapter 5: Time Series Analysis
• Chapter 6: Error Checks
• Chapter 7: Model Template Example
• Chapter 8: Financial Statement Theory
• Chapter 9: Control Accounts
• Chapter 10: Example Model Build
• CHAPTER 10.1: Initial Structure
• CHAPTER 10.2: Adding Sheets
• CHAPTER 10.3: Creating the Financial Statements
• CHAPTER 10.4: Linking the Financial Statement Worksheets

• CHAPTER 10.5: Revenue
• CHAPTER 10.6: Costs of Goods Sold
• CHAPTER 10.7: Operating Expenditure
• CHAPTER 10.8: Capital Expenditure
• CHAPTER 10.9: Debt
• CHAPTER 10.10: Taxation
• CHAPTER 10.11: Equity
• CHAPTER 10.12: Single Entry Accounting
• CHAPTER 10.13: Opening Balance Sheet Revisited
• CHAPTER 10.14: Indirect Cash Flow Extract
• CHAPTER 10.15: Case Study Wrap-up
• Chapter 11: Self Review
• Chapter 12: Ratio Analysis
• Second Edition Addendum
• Appendix
• Index
• _GoBack
• _GoBack
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Within the context of the tabling of a recent financial policy white paper and the striking of the Task Force on Canadian Financial Services, the author presents an evaluation of the Canadian financial sector. The volume looks at emerging financial trends in both Canada and international arenas.
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• Intro
• _Hlk29216758
• _Hlk29216925
• _Hlk28597987
• _Hlk28603126
• _Hlk517716138
• About the Author
• Preface
• Editor's notes
• Downloadable Resources
• Chapter 0: Not an Introduction, But a Continuation
• Chapter 1: Recap
• Chapter 1.1: Best Practice Concept
• Chapter 1.2: Time Series Analysis
• CHAPTER 1.3: FINANCIAL STATEMENT THEORY
• CHAPTER 1.4: CONTROL ACCOUNTS
• Chapter 2: What-If? Analysis
• Chapter 2.1: Conditional Formulae
• CHAPTER 2.2: OFFSET
• CHAPTER 2.3: SCENARIO ANALYSIS
• CHAPTER 2.4: DATA TABLES
• CHAPTER 2.5: INDEX and MATCH

• CHAPTER 2.6: USING TORNADO CHARTS FOR SENSITIVITY ANALYSIS
• CHAPTER 2.7: SIMULATIONS ANALYSIS
• CHAPTER 2.8: VARIANCE ANALYSIS
• CHAPTER 2.9: BREAKEVEN ANALYSIS
• Chapter 3: Forecasting Considerations
• CHAPTER 3.1: SEASONAL / CYCLICAL FORECASTING
• CHAPTER 3.2: REVISING FORECASTS
• CHAPTER 3.3: PRO-RATING FORECASTS OVER TIME
• CHAPTER 3.4: CHANGING PERIODICITIES
• Aggregating Time Periods
• CHAPTER 3.5: MODELLING HISTORICAL, ACTUAL AND FORECAST DATA
• CHAPTER 3.6: ROLLING BUDGETS AND CHARTS
• CHAPTER 3.7: FORECASTING MAXIMUM CASH REQUIRED
• Chapter 4: Modelling Inventory

• Chapter 5: Capital Expenditure
• Chapter 6: Debt
• CHAPTER 6.1: DEBT SCULPTING
• CHAPTER 6.2: CALCULATING INTEREST RATES CORRECTLY
• CHAPTER 6.3: USEFUL REPAYMENT FUNCTIONS AND FORMULAE
• Chapter 7: Valuation Considerations
• CHAPTER 7.1: DERIVING THE CORRECT CASH FLOW FOR DCF
• CHAPTER 7.2: CONSIDERING DISCOUNT FACTORS
• CHAPTER 7.3: COMMON DCF MODELLING ERRORS
• CHAPTER 7.4: USING THE DIVIDEND DISCOUNT MODEL
• CHAPTER 7.5: IRRELEVANT IRR
• CHAPTER 7.6: MODIFIED INTERNAL RATE OF RETURN (MIRR)
• CHAPTER 7.7: SMOOTHING CAPITAL EXPENDITURE
• CHAPTER 7.8: CALCULATING ECONOMIC LIVES

• Chapter 8: Linking Models
• Chapter 9: Life's Too Short
• CHAPTER 9.1: SECTION NUMBERING
• CHAPTER 9.2: US vs. EUROPEAN DATES
• CHAPTER 9.3: SHEET REFERENCING
• CHAPTER 9.4: REDUCING FILE SIZE
• CHAPTER 9.5: TAKING IT TO THE LIMIT
• CHAPTER 9.6: ORDER OF OPERATIONS
• CHAPTER 9.7: KEEPING STYLES UNDER CONTROL
• CHAPTER 9.8: WEARING PROTECTION
• Chapter 10: Look To The Future
• CHAPTER 10.1: DYNAMIC ARRAYS
• CHAPTER 10.2: XLOOKUP AND XMATCH
• CHAPTER 10.3: LET IT BE
• CHAPTER 10.4: NEW DATA TYPES
• CHAPTER 10.5: STOCKHISTORY
• RESOURCES
• Index

Turn your financial data into insightful decisions with this straightforward guide to financial modeling with Excel Interested in learning how to build practical financial models and forecasts but concerned that you don't have the math skills or technical know-how? We've got you covered! Financial decision-making has never been easier than with Financial Modeling in Excel For Dummies. Whether you work at a mom-and-pop retail store or a multinational corporation, you can learn how to build budgets, project your profits into the future, model capital depreciation, value your assets, and more. You'll learn by doing as this book walks you through practical, hands-on exercises to help you build powerful models using just a regular version of Excel, which you've probably already got on your PC. You'll also: Master the tools and strategies that help you draw insights from numbers and data you've already got Build a successful financial model from scratch, or work with and modify an existing one to your liking Create new and unexpected business strategies with the ideas and conclusions you generate with scenario analysis Don't go buying specialized software or hiring that expensive consultant when you don't need either one. If you've got this book and a working version of Microsoft Excel, you've got all the tools you need to build sophisticated and useful financial models in no time!

• v. 1. A-D
• v. 2. E-J
• v. 3. K-Q
• v. 4. R-XYZ; index.

"What initially looked like an impossible undertaking has become a formidable achievement, stretching from the theoretical foundations to the most recent cutting edge methods. Mille bravos!" -Dr Bruno Dupire (Bloomberg L.P.) The Encyclopedia of Quantitative Finance is a major reference work designed to provide a comprehensive coverage of essential topics related to the quantitative modelling of financial markets, with authoritative contributions from leading academics and professionals. Drawing on contributions from a wide spectrum of experts in fields including financial economics, econometrics, mathematical finance, operations research, numerical analysis, risk management and statistics, the Encyclopedia of Quantitative Finance faithful reflects the multidisciplinary nature of its subject. With a pool of author comprising over 400 leading academics and professionals worldwide, the Encyclopedia provides a balanced view of theoretical and practical aspects of quantitative modelling in finance. Topics covered in the Encyclopedia include* the historical development of quantitative modelling in finance, including biographies of influential figures* self-contained expositions of mathematical and statistical tools used in financial modelling* authoritative expositions on the foundations of financial theory and mathematical finance, including arbitrage pricing, asset pricing theory, option pricing and asset allocation* comprehensive reviews of various aspects of risk management: credit risk, market risk, operational risk, economic capital and Basel II with a detailed coverage of topics related to credit risk* up-to-date surveys of the state of the art in computational finance: Monte Carlo simulation, partial differential equations (PDEs), Fourier transform methods, model calibration* detailed entries on various types of financial derivatives and methods used for pricing and hedging them, including equity derivatives, credit derivatives, interest rate derivatives and foreign exchange derivatives* pedagogical surveys of econometric methods and models used in finance, including GARCH models, GMM, realized volatility, factor models, Mixed Data Sampling and high-frequency data* empirical and theoretical aspects of market microstructure and trade-level modelling* timely entries on new topics such as commodity risk, electricity derivatives, algorithmic trading and multi-fractals* quantitative methods in actuarial science, including insurance derivatives, catastrophe bonds , equity-linked life insurance and other topics at the interface of finance and insurance All articles contain are cross-referenced to other relevant articles in the Encyclopedia and include detailed bibliographies for further reading. The scope and breadth of the Encyclopedia will make it an invaluable resource for students and researchers in finance, quantitative analysts and developers, risk managers, portfolio managers, regulators, financial market analysts and anyone interested in the complexity of today's financial markets and products.
(source: Nielsen Book Data)

This reference defines concepts, phrases, and jargon needed to understand the world of finance, from CNBC and the financial pages to corporate earnings reports. Some 3,500 terms are defined and cross- referenced, including vocabulary related to accounting, finance, banking, economics, investing, markets, real estate, and securities. Etzel has reported on economics and financial markets for Oster Dow Jones Commodity News. Annotation ♭2004 Book News, Inc., Portland, OR (booknews.com).

• TIME VALUE OF MONEY Simple Interest and Compound Interest Equivalent Rate, Effective Rate and Continuously Compounded Rate Future Value (FV), Present Value (PV), Rate of Discount and Discount Factor Net Present Value (NPV), and Internal Rate of Return (IRR) Money-weighted and Time-weighted Rates of Return Annuity
• THE MONEY MARKETS Certificate of Deposit (CD), Commercial Paper (CP), Treasury Bill, True Yield and Discount Rate Value Dates, Interpolation and Extrapolation
• ZERO-COUPON YIELD AND YIELD CURVE Zero-coupon Yield, the Spot Yield Curve and Bootstrapping The Par Yield Curve The Forward-forward Yield Curve
• FORWARD-FORWARDS, FRAS AND FUTURES Forward-forward Interest Rate Forward Rate Agreement (FRA) Stir Futures Contract and Margin Basis Risk Spread, Butterfly Spread and Condor STRIP
• THE BOND AND REPO MARKETS Accrued Interest, Clean Price and Dirty Price Money Market Basis and Bond Basis Yield to Maturity (YTM) Current Yield and Simple Yield to Maturity Zero-coupon Security and STRIP Asset-backed Securities (ABS), Mortgage-backed Securities (MBS), Collateralized Debt Obligations (CDO) and Covered Bonds Bond Futures, Conversion Factor and Cheapest-to-deliver (CTD) Cash-and-carry Arbitrage and Implied Repo Rate Duration, Modified Duration, Price Value of a Basis Point (PVB), Dollar Value of an 01 (DV01) and Convexity Hedge Ratio Repo and Reverse Repo Haircut and Margin Buy/Sell -Back and Sell/Buy-Back Securities Lending/Borrowing
• THE SWAPS MARKET Interest Rate Swap (IRS) Asset Swap and Liability Swap Overnight Index Swap (OIS) Currency Swap
• FOREIGN EXCHANGE Forward Outright and Forward Swap Cross-rate Short Dates Forward-forward Exchange Rate Non-deliverable Forward (NDF)
• OPTIONS Calls and Puts The Black and Scholes Pricing Model Historic Volatility and Implied Volatility Binomial Pricing Model The Put/Call Parity Cap, Floor, Collar and Zero-cost Option Break Forward, Range Forward and Participation Forward Option Trading Strategies: Straddle, Strangle, Spread, Butterfly, Condor, Ratio Spread and Risk Reversal Barrier Options: Knock-out Option and Knock-in Option Credit Derivatives, Synthetic CDO and First-to-default Baskets The 'Greeks': Delta, Gamma, Vega, Theta and Rho
• STATISTICS Mean, Median and Mode Variance and Standard Deviation Correlation and Covariance Probability Density and the Normal Probability Function
• RISK MANAGEMENT AND INVESTMENT MANAGEMENT Value at Risk (VaR) The Capital Adequacy Ratio Efficient Markets Hypothesis
• APPENDICES Glossary Day/Year Conventions for Money Markets
• .
• (source: Nielsen Book Data)

Key Financial Market Concepts is the ultimate reference tool for anyone working in the finance industry, explaining the 100 essential financial market terms. It provides you with a definition of what each concept is, how it works, when it is likely to arise, how it's calculated and how best to use it. You'll also get access to many of the formulas used, already programmed into a Microsoft Excel spreadsheet. From simple and compound interest, through to bonds and yields and the Black and Scholes model, this book has it covered. .
(source: Nielsen Book Data)

• Cover
• Contents
• Preface
• Part I: Financial System
• Chapter 1: The Financial System: An Introduction
• Introduction
• Formal and Informal Financial Sectors
• The Indian Financial System
• Components of the Formal Financial System
• Financial Institutions
• Financial Markets
• Financial Instruments
• Financial Services
• Interaction Among Financial System Components
• Functions of a Financial System
• Key Elements of a Well-Functioning Financial System
• Financial System Designs
• Nature and Role of Financial Institutions (Intermediaries) and Financial Markets
• Financial Markets
• Money Market and Capital Market
• Primary Capital Market and Secondary Capital Market
• Characteristics of Financial Markets
• Functions of Financial Markets
• Key Terms
• Summary
• Review Questions
• References
• Chapter 2: The Financial System and the Economy
• Introduction
• Types of Economic Units
• A Macro-Economic Framework Analysis for Exploring the Role of the Financial System in the Economy
• National Income Accounts
• Classification of the Indian Economy
• Flow of Funds Accounts
• Flow of Funds-based Indicators of Financial Development
• Trends in Saving and Investment
• Why Study Saving and Investment
• Saving and Investment in India
• Household Sector Financial Saving
• Saving and Investment in the Long Run
• Conclusion
• Relationship Between the Financial System and Economic Growth: Some Theoretical and Empirical Evidence
• Empirical Research Evidence on Relationship Between the Financial System and Economic Growth
• Key Terms
• Summary
• Review Questions
• References
• Chapter 3: Reforms in the Financial System
• Background
• Indian Financial System in the Pre-reforms Period
• Objectives of Financial System Reforms
• Financial Efficiency, Stability, and Integration
• Conclusion
• Key Terms
• Summary.

• Review Questions
• References
• Part II: Financial Markets
• Chapter 4: The Money Market
• Introduction
• Functions of the Money Market
• Benefits of an Efficient Money Market
• The Indian Money Market
• Role of the Reserve Bank of India in the Money Market
• Steps to Develop the Money Market in India
• Money Market Centres
• Money Market Instruments
• Treasury Bills
• Features of T-Bills
• Types of T-Bills
• Importance of T-Bills
• Development of the T-Bills Market
• Participants in the T-Bills Market
• Sale of T-Bills
• Types of Auctions
• 91-Day T-Bills
• Size of the 91-Day T-Bills Market
• Competitive Bids and Non-Competitive Bids
• 364-Day T-Bills
• Size of the 364-Day T-Bills Market
• 182-Day T-Bills
• 14-Day T-Bills
• Size of the 14-Day T-Bills Market
• Implicit Yield at Cut-off Prices
• Conclusion
• Commercial Paper
• The Process for Issuing a CP
• Guidelines Relating to CPs
• Summary of Guidelines for Issuance of a CP
• Stamp Duty on CP
• Size of the CP Market
• Secondary Market in CPs
• Factors Inhibiting the Growth of the CP Market
• Commercial Paper: A Comparative Position
• Commercial Bills
• Types of Commercial Bills
• Features of Commercial Bills
• Measures to Develop the Bills Market
• Size of the Commercial Bills Market
• Certificates of Deposit
• Measures to Develop the CD Market
• Guidelines for Issue of Certificates of Deposit (CDs)
• Secondary Market for CDs
• Size of the CD Market
• Factors Inhibiting the Growth of CDs
• Comparison of Certificates of Deposit and Commercial Papers
• Call/Notice Money Market
• Introduction
• Why Call Money
• Participants in the Call Money Market
• Reporting of Call/Notice Money Transactions
• Role of the Reserve Bank in the Call Money Market
• Link Between the Call Money Market and Other Financial Markets
• Call Rate
• Mibor.

• Call Rates Volatility
• Factors Influencing Call Money Market Rate
• Measures for Curbing High Volatility
• Steps to Convert the Call Money Market into a Pure Inter-bank Market
• Term Money Market
• Collateralised Borrowing and Lending Obligation (CBLO)
• Link Between the Money Market and the Monetary Policy in India
• Tools for Managing Liquidity in the Money Market
• Reserve Requirements
• Interest Rates
• Bank Rate
• Refinance from the Reserve Bank
• Repos
• Money Market Derivatives
• Interest Rate Swap
• Plain Vanilla Interest Rate Swaps
• Applications of Interest Rate Swaps
• Forward Rate Agreements
• Plain Vanilla Forward Rate Agreements
• Participants in the IRS/FRA Market
• Guidelines Relating to IRSs/FRAs
• Introduction of New Derivative Instruments
• An Overview of the Money Market
• Key Terms
• Summary
• Review Questions
• References
• Chapter 5: The Capital Market
• Introduction
• Functions of a Capital Market
• Primary Capital Market and Secondary Capital Market
• History of the Indian Capital Market
• A Brief History of the Rise of Equity Trading in India
• Capital Market Scams
• Introduction
• The 1991
• 92 Securities Scam (The Harshad Mehta Scam)
• The 2001 Scam (Ketan Parekh Scam)
• Comparison of the Harshad Mehta Scam and the Ketan Parekh Scam
• Conclusion
• Reforms in the Capital Market
• The Primary Capital Market
• Secondary Capital Market
• Key Terms
• Review Questions
• References
• Chapter 6: The Primary Market
• Introduction
• Intermediaries to an Issue
• Free Pricing Regime
• Book Building-A New Issue Mechanism in India
• The Book Building Process
• Bidding Process
• Determination of Price
• Registering of Prospectus with Registrar of Companies
• Applications Supported by Blocked Amount (Asba) Process
• Allotment/Allocation in Book Built Issue
• Anchor Investor.

• Benefits of Book Building Method
• Limitations of the Book Building Method
• Auction-based Book Building
• Reverse Book Building
• Conclusion
• Green-Shoe Option
• On-Line IPOs
• Primary Issues
• Public Issue
• Rights Issue
• Indian Depository Receipts (IDRs)
• Private Placement Market
• Preferential Issue
• Qualified Institutions Placement (QIP)
• Resource Mobilisation from the Primary Market
• Non-government Public Limited Companies (Private Sector)
• Mega Issues Floated by Non
• government Public Limited Companies
• Absorption of Private Capital Issues
• Banks and Financial Institutions in the Public Sector
• Mutual Funds
• Resource Mobilisation from International Markets
• Factors Leading to an Increase in the Popularity of International Markets
• Global Depository Receipts (GDRs)
• American Depository Receipts (ADRs)
• Organising Euro Issues
• Guidelines Relating to International Issues
• Resources Raised Through Euro Issues
• External Commercial Borrowings (ECBs)
• Foreign Currency Convertible Bonds (FCCBs)
• Foreign Currency Exchangeable Bonds (FCEBs)
• End-use of FCEB Proceeds
• Promoter Group Companies
• Parking of FCEB Proceeds Abroad
• Conclusion
• Key Terms
• Summary
• Questions for Discussion
• Review Questions
• References
• Chapter 7: Disinvestment of Public Sector Undertakings
• Introduction
• Disinvestment
• Disinvestment Machinery
• The PSU Sell-off Methods
• Strategic Sales Techniques
• Proceeds Realised from Disinvestment
• PSU Disinvestment: Summary of Receipts from Disinvestment: 1991-92 to 30-9-2009
• Evaluating the Disinvestment Programme
• Disinvestment of PSUS in Different Countries
• Conclusion
• Key Terms
• Summary
• Review Questions
• References
• Chapter 8: The Secondary Market
• Introduction
• Functions of the Secondary Market.

• Development of the Stock Market in India
• Post-reforms Market Scenario
• Regulation of Stock Exchanges
• Organisation, Management and Membership of Stock Exchanges
• Demutualisation of Stock Exchanges
• Listing of Securities
• Central Listing Authority
• The SEBI (Central Listing Authority) Regulations, 2003
• Risk Management
• Trading Rules and Regulations
• Circuit Breakers
• Trading Arrangements
• Trading and Settlement
• Dematerialisation of Securities
• Internet Trading
• Stock Market Index
• Methodologies for Calculating the Index
• Global Stock Market Indices
• Major Indices in India
• Stock Exchanges
• The Bombay Stock Exchange
• BSE Milestones
• Carry Forward Deals, or Badla
• Badla Mechanism
• Advantages
• Listing Categories
• BSE Indices
• Trends in Turnover on the BSE
• Conclusion
• The National Stock Exchange of India
• Membership Pattern on the NSE
• Indices
• National Securities Clearing Corporation Limited
• Margin Requirements
• Capital Market Segment of the NSE
• Conclusion
• The Over the Counter Exchange of India (OTCEI)
• Trading Documents on the OTCEI
• Advantages of OTCEI
• Steps to Improve Turnover on the OTCEI
• Conclusion
• The Inter-Connected Stock Exchange of India LTD
• Regional Stock Exchanges
• Indo Next
• Measures to Boost Liquidity in the Secondary Market
• Investment by Foreign Institutional Investors in the Indian Stock Market
• Depositories
• Buy Back of Shares
• Conclusion
• Market Making System
• Stock Lending and Borrowing (SLB)
• Conclusion
• Rolling Settlement
• Conclusion
• Straight Through Processing (STP)
• Margin Trading
• Conclusion
• Impact of Reforms and Measures on Secondary Market Activities
• Conclusion
• Key Terms
• Summary
• Review Questions
• References
• Chapter 9: The Derivatives Market
• Introduction.

The Indian Financial System: Markets, Institutions and Services is a comprehensive reference book about the financial system. This book is meant for students, professionals, and academicians. It seeks to help the readers hold their own in the modern business scenario. The book is divided into five units. The first unit introduces the economy and the financial system. The second unit covers various concepts of financial markets such as the capital market, the derivatives market, and the debt market. Unit III discusses financial institutions and topics like insurance and mutual funds. The fourth unit focuses on concepts like investment banking, credit rating, housing finance, and micro-finance. The fifth and final chapter discusses financial regulation. Four new chapters, several case studies, chapter summaries, multiple choice questions, and review questions are some of the highlights of this edition. This edition, the third edition, also introduces new concepts like foreign currency exchangeable bonds, auction-based building method, and anchor investors. The content reflects changes in the financial system up to July 2010.