Fourth Semester

Module I: Financial Markets

Functions of financial markets-Types of financial markets- Participants in financial markets-

Role of financial intermediaries-Financial innovation-Financial inclusion and inclusive

growth.

Module II: Money Market

Functions of money market-Instruments of the money market-Call money-Bill of exchange-

Commercial bills-Treasury bills- Commercial paper-Interbank market-Federal funds-

Negotiable certificate of deposits- Banker’s acceptance-Repurchase agreements-Money

market mutual funds- Features of a developed money market-Structure of Indian money

market- Money market reforms in India since 1991.

Module III: Capital Market

Functions of capital market-Primary market-Instruments of the primary market- Secondary

market-Functions- Instruments of the secondary market-Demutualisation of stock exchanges-

Trading mechanism of the stock exchanges- Liquidity products (margin trading, short sales,

securities lending and borrowing)-Foreign institutional investment-Participatory notes (Pnotes)-

Insider trading-Investor protection- Credit rating-Capital market institutions-

Depositories-Discount and Finance House of India-Stock Holding Corporation of India-

Securities Trading Corporation of India-SEBI-Functions and powers- Capital market reforms

in India since 1991.

Module IV: Derivatives Market

Types of derivatives-Participants in the derivative markets-Uses of derivatives- Options-

Types of options-Uses of options-Platforms for options trade-Trading mechanics-Option

premium-Profits and losses with options-Stock options and stock index options in India-

Futures- Types of futures (stock index futures-foreign currency futures-interest rate futurescommodity

futures)-Uses of futures-Market mechanics-Market participants- The clearing

process- Stock futures and stock index futures in India-Difference between options and

futures-Swaps-Interest rate swaps-Foreign currency swaps.

Module V: Global Financial Markets

Instruments- American Depository Receipts (ADR)-Global Depository Receipts (GDR)-

Foreign Currency Convertible Bonds (FCCB)-External commercial borrowings-International

bonds-Eurobonds-Euronotes-Euro commercial papers-Eurodollars-Eurocurrency market-

Reasons for the growth-Features-Effects of the eurocurrency market.