Financial Market & Institutions

Course Title: Financial Market & institution
Course Code: FIN-322
Submitted To:
Md. Amdadul Hoque
Assistant Professor
Department of Finance & Banking,
Comilla University
Submitted By:
Md. Abul Hasnat Fahim
Id:11817001
Department of Finance & Banking,
Comilla University
Department of Finance and Banking

Date of submission:
 Financial Market: Financial Market facilitate the transfer of funds from
surplus units to deficit units.
 Money Market: The money market refers to trading in very short-term
instruments in the financial market such as commercial paper, treasury
bills, bills of exchange.
 Capital Market: Capital market is a market where buyers and sellers
engage in trade of long-term financial securities like bonds, stocks, etc.
 Primary market: Primary market is the financial market in which a security
is first sold by the issuer and bought by investors.
 Secondary market: A secondary market is the market in which securities
issued in the primary market are traded by market participants.
 Organizational structure: An organizational structure is a system that
outlines how certain activities are directed in order to achieve the goals of
an organization.
 Bond: Bonds are investment securities where an investor lends money to a
company or a government for a set period of time, in exchange for regular
interest payments.
 Initial public offering: An initial public offering (IPO) refers to the process
of offering shares of a private corporation to the public in a new stock
issuance.
 Private placement: A private placement is a sale of stock shares or bonds
to pre-selected investors and institutions rather than on the open market.
 Asset manager: Asset manager a person or company that manages
someone else's money, stocks, and shares, etc.
 Prospectus: A prospectus is generally published by a company seeking to
place a new issue of shares and is designed to give potential investors key
facts about the company.
 BO Account: BO Account refers to the Beneficiary Owners Account If a
person wants to start investing and stock trading in the stock market in
Bangladesh then he needs to open a Beneficiary Owners account. Just like a
Bank Account is used to hold money, BO account is used to hold shares. All
shares from new IPO’s and most of secondary market shares are in
electronic form and a BO account, owned by you the investor, holds the
electronic shares.
 Circuit Breaker: A circuit breaker is a kind of regulatory measure that is
used to temporarily halt trading on an exchange.
 Halt Trade: A trading halt is a temporary suspension of trading for a

particular security or securities at one exchange or across numerous
exchanges.
 Cash Dividend: A cash dividend is a payment made by a company out of its

earnings to investors in the form of cash.
 Stock Dividend: A stock dividend is a dividend paid to shareholders in the
form of additional shares in the company, rather than as cash.
 Bonus shares: Bonus shares are additional shares given to the current
shareholders without any additional cost, based upon the number of
shares that a shareholder owns.
 A-Category Companies: Companies which are regular in holding the
Annual General Meetings and have declared dividend at the rate of 10
percent or more in the last year.
 B-Category Companies: Companies which are regular in holding the Annual
General Meetings but have failed to declare dividend at least at the rate of
10 percent in the last year.
 N-Category Companies: Newly listed companies except green-field
companies which shall be transferred to other categories in accordance
with their first dividend declaration and respective compliance after listing
of their shares.
 Z-Category Companies: Companies which have failed to hold the Annual
General Meeting when due or have failed to declare any dividend based on
annual performance or which are not in operation continuously for more
than six months or whose accumulated loss after adjustment of revenue
reserve, if any, exceeds its paid-up capital.
 Earnings per share: Earnings per share or EPS is an important financial
measure, which indicates the profitability of a company. It is calculated by
dividing the company’s net income with its total number of outstanding
shares.
 Dividend per share: Dividend per share (DPS) is the sum of declared
dividends issued by a company for every ordinary share outstanding.
Dividends per share is calculated by dividing the total number of dividends
paid out by a company (including interim dividends) over a period of time,
by the number of shares outstanding.
 Price Earnings Ratio :The Price Earnings Ratio (P/E Ratio) is the
relationship between a company’s stock price and earnings per share (EPS).
It is a popular ratio that gives investors a better sense of the value of the
company. PE ratio shows current investor demand for a company share.
Price to Earnings Ratio = Price / Earnings Per Share (EPS)
 Merchant banks: The term merchant bank refers to a financial institution

that conducts underwriting, loan services, financial advising, and fund
raising services for large corporations.
 Mutual fund: A mutual fund is a company that pools money from many
investors and invests the money in securities such as stocks, bonds, and
short-term debt. The combined holdings of the mutual fund are known as
its portfolio.
 Banker’s Acceptance: A banker's acceptance is a money market
instrument representing a promised future payment by a bank.
Or
Banker’s Acceptance (BA) is a short-term money market instrument that
comes in handy in international trade.
 Over-the-counter: An over-the-counter (OTC) market is a market where
trading is done directly between two parties, without any supervision of
stock exchange. The difference between OTC markets and exchange
markets, is that in exchange markets, trading occurs via exchanges.
 Underwriting: underwriting is the process through which an individual or
institution takes on financial risk for a fee.
 Allotment Letter: It is a letter that confirms the number of shares allotted
to an individual for a new issue of shares.
 Treasury bills: Treasury bills, also known as T-bills, are short term money
market instruments issued through auctions conducted by the Central Bank
of Bangladesh on behalf of the Government.
 Preference shares: Preference shares also commonly known as preferred
stock, is a special type of share where dividends are paid to shareholders
prior to the issuance of common stock dividends.
 Hybrid securities: Hybrid securities are investment instruments that
combine the features of pure equities and pure bonds. These securities
tend to offer a higher return than pure fixed income securities such as
bonds but a lower return than pure variable income securities such as
equities. They are considered less riskier than pure variable income
securities such as equities but more risky than pure fixed income securities.
 Common stock: Common stock is a type of security that represents
ownership of equity in a company and has the right to vote on the election
of board of directors.
 Prospectus: A Prospectus is a legal document that a company uses to
market its shares to the public.

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Course Title: Financial Market & institution

Course Code: FIN-322

Department of Finance and Banking

 Halt Trade: A trading halt is a temporary suspension of trading for a

 Cash Dividend: A cash dividend is a payment made by a company out of its

 Merchant banks: The term merchant bank refers to a financial institution

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