MONEY MARKET CONCEPTS
ISSUED CAPITAL: that part of a company‟s capital that has been subscribed to by shareholders. It is a broader concept than paid up capital.
PAID UP CAPITAL: It is that part of the issued capital of a company, paid up by the shareholders (promoters).
It is that part, invested by the promoters. Therefore, an issued capital may or may not be a paid up capital.
AUTHORIZED CAPITAL: It is the amount of share capital fixed in the Memorandum of an
Association and the Articles of the Association of a company as required by the Company‟s act. They are also
known as nominal capital.
REPO OPERATIONS: In order to absorb and to neutralize excess liquidity from the system and even to out
call money rates a system of announcing calendar of Repos auctions on a monthly basis was introduced with
effect from January 13,1997.
FIXED RATE REPOS: The fixed rate repo was introduced with effect from November 29,1997. The repo
rate and the period of repo is announced by the RBI in the evening of the previous day.
NET ASSET VALUE (NAV) : The investment efficiency of the mutual fund can be measured in terms of the
NAV values and Net Sales. NAV is the indicator of the investment performance and it indicates the amount
each unit holder will get per unit on redemption or winding up of mutual fund. Net Sales given by the
difference between the total sales and total repurchases of the units of a fund.
FLOATING RATE NOTE : It adopts a reference rate of interest which reflects the market rate of interest.
The interest rate of FRN then in certain percentage points over the reference rate or benchmark rate
ISSUED CAPITAL: that part of a company‟s capital that has been subscribed to by shareholders. It is a broader concept than paid up capital.
PAID UP CAPITAL: It is that part of the issued capital of a company, paid up by the shareholders (promoters).
It is that part, invested by the promoters. Therefore, an issued capital may or may not be a paid up capital.
AUTHORIZED CAPITAL: It is the amount of share capital fixed in the Memorandum of an
Association and the Articles of the Association of a company as required by the Company‟s act. They are also
known as nominal capital.
REPO OPERATIONS: In order to absorb and to neutralize excess liquidity from the system and even to out
call money rates a system of announcing calendar of Repos auctions on a monthly basis was introduced with
effect from January 13,1997.
FIXED RATE REPOS: The fixed rate repo was introduced with effect from November 29,1997. The repo
rate and the period of repo is announced by the RBI in the evening of the previous day.
NET ASSET VALUE (NAV) : The investment efficiency of the mutual fund can be measured in terms of the
NAV values and Net Sales. NAV is the indicator of the investment performance and it indicates the amount
each unit holder will get per unit on redemption or winding up of mutual fund. Net Sales given by the
difference between the total sales and total repurchases of the units of a fund.
FLOATING RATE NOTE : It adopts a reference rate of interest which reflects the market rate of interest.
The interest rate of FRN then in certain percentage points over the reference rate or benchmark rate
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