A general power of attorney grants broad authority to an individual (in this case, Harish) to make decisions and take actions on behalf of the person granting the power of attorney (Harish’s father) across various matters.

The Compound Annual Growth Rate (CAGR) is calculated using the formula [(Ending Value/Beginning Value)^(1/Time Period)] – 1. In this case, it is [(16/10)^(18/12)]-1 for the growth from Rs 10 to Rs 16 over 18 months.

A technical analyst studies both share price trends and share trading volumes to analyze and predict future market movements. Additionally, some technical analysts also consider aspects of human behavior, such as investor psychology, in their analysis.

Returns from equity shares are not directly impacted by interest rate movements. Interest rate risk is more relevant to fixed-income securities like bonds. Equity investments are more exposed to factors like business risk, systematic risk, and market conditions.

Beta measures the volatility or systematic risk of a portfolio in comparison to a benchmark. It indicates how much the portfolio’s returns are likely to move in relation to changes in the benchmark’s returns.

In the Indian stock market, if the Sensex drops by 10%, trading is halted for one hour. This is known as a circuit breaker, and it is implemented to control extreme market volatility.

Changing the allocation of investments based on short-term views or market conditions is known as Tactical Asset Allocation. In this case, Mr. Manish adjusting his equity and debt allocation reflects a tactical decision based on his current view of the markets.

The Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance is responsible for handling matters related to the disinvestment of the Government of India shareholding in Central Public Sector Enterprises, not the Department of Economic Affairs.

The primary market is where issuers raise capital by issuing securities to investors for the first time. It involves the sale of new securities directly by the issuer to the investors.

The retirement corpus should be reviewed every time there is a significant change in the individual’s financial situation, goals, or other relevant factors. Regular reviews ensure that the retirement plan remains aligned with the individual’s evolving circumstances and needs.

An ordinary annuity is received at the end of the period. In the context of financial instruments, an ordinary annuity involves receiving a series of equal payments at the end of each period.

The Securities and Exchange Board of India (SEBI) is responsible for the registration and regulation of securities market intermediaries in India. SEBI plays a crucial role in overseeing and regulating various participants in the securities market to ensure transparency and investor protection.

Liquid or money market funds are often recommended for parking emergency funds due to their high liquidity and stability. These funds invest in short-term, low-risk instruments, providing easy access to funds when needed for emergencies.

The future value adjusted for inflation is calculated by multiplying the present value by (1 + inflation rate)^number of years. Therefore, in this case, it is Rs. 10 lakh X (1+10%)^10.

As the correlation between two assets decreases, the benefits of diversification increase. Diversification is more effective when assets in a portfolio have lower correlation, as it helps to reduce overall portfolio risk.

An investor opens a demat account with Depository Participants (DPs). DPs are entities registered with depositories that provide demat account services to investors for holding and transacting in securities in electronic form.

A positive relationship between expected return and expected risk is consistent with investors being risk-averse. Risk-averse investors require higher expected returns to compensate for taking on higher levels of risk.

Government Securities Funds are exposed to the least credit risk among the options listed. These funds primarily invest in securities issued by the government, which is considered to have the lowest credit risk compared to corporate bonds or credit risk funds.

The income of arbitrage funds is derived from the carry costs associated with the difference between the cash (spot) and derivatives markets. These funds take advantage of price differentials between the two markets to generate returns.

A Category I & II Alternative Investment Fund (AIF) can invest up to 25 percent of its investable funds in one single investee company.

An option contract gives its buyer the right but not the obligation to exercise the option. The buyer can choose whether or not to exercise the option based on market conditions and their investment strategy.

A stock option is a derivative instrument because its value is derived from the underlying stock. Derivatives are financial instruments that derive their value from the performance of an underlying asset, index, or rate.

When a bond is selling at a discount, its yield to maturity (YTM) exceeds the coupon rate. This is because YTM takes into account the capital gain potential when the bond matures at its face value, and buying at a discount increases the effective yield.

Financial assets are generically classified into two broad categories: Debt (representing bonds, deposits, etc.) and Equity (representing ownership in a company, stocks, etc.).

Book Value per Share is calculated by dividing the reported shareholders’ equity by the number of common shares outstanding. It represents the per-share value of a company’s equity on its balance sheet.

For the public issue of a debt security, it is essential that the debt instruments must be credit rated. Credit rating provides an assessment of the creditworthiness of the issuer and helps investors gauge the risk associated with the debt security.

Stock Split is a corporate action where the face value of the existing shares is reduced in a defined ratio. This results in an increase in the number of outstanding shares while reducing the face value per share.

If an investor has completed KYC formalities with a Centralized KYC Registration Agency (CRA), it is applicable for various financial products and services, including mutual funds, portfolio managers, venture capital funds, and other entities regulated by securities and financial market regulators.

One drawback of Standard Deviation is that it is computed based on historical returns, making it sensitive to past market conditions and may not fully capture future uncertainties or changes in the market environment.

Government Securities Funds are exposed to the least credit risk among the options listed. These funds primarily invest in securities issued by the government, which is considered to have the lowest credit risk compared to corporate debt funds or credit risk funds.

Category III Alternative Investment Funds (AIFs) often involve complex strategies and a higher level of risk. Risk-averse retail investors, who typically prefer lower-risk investment options, would be less likely to invest in such funds.

Market-wide circuit breakers are based on index movement. These are mechanisms in place to temporarily halt trading in financial markets in the event of significant index movements to control excessive volatility and protect investors.

A portfolio is considered to be efficient if no other portfolio offers a higher expected return with the same risk (option a) and no other portfolio offers lower risk with the same expected return (option b). An efficient portfolio represents an optimal combination of risk and return.

The rate of interest paid on the bond is referred to as the “coupon” payment. It represents the periodic interest payment made to bondholders based on the bond’s face value and coupon rate.

As per the SEBI (Certification of Associated Persons in Securities Markets) Regulations, 2007, a certificate is valid for a period of 3 years from the date of grant or revalidation.

The merchant banker leading a public offer is indeed known as the ‘Lead Manager.’ The lead manager takes the primary responsibility for managing and coordinating the entire public offer process.

Derivatives are allowed on various underlying assets in the Indian market, including equities (stock futures and options), currency (currency futures and options), and commodities (commodity futures).

The Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR) rates are decided by the Reserve Bank of India (RBI). These are regulatory measures that help control the money supply and liquidity in the financial system.

All of the mentioned entities – Banks and Insurance Companies, Provident Funds, and State Governments – are major investors in the government securities market in India. They play a crucial role in holding and trading government securities.

In the Primary Market, securities are issued to investors for the first time through processes like initial public offerings (IPOs) or new debt issuances. This market facilitates the direct interaction between issuers and investors for the sale of new securities.

In a book-built public issue, if the investor bids at Rs.45 and the cut-off price is discovered as Rs.50, the investor will be allotted shares at the final discovered cut-off price, which is Rs.50 in this case.